Wall Street has spoken, and the outlook for Detroit is not pretty.

In a North American automotive market that already sliding, the Big Three’s share very well could set a record low this year, says Stephen J. Girsky, Morgan Stanley Dean Whitter’s automotive guru.

The sad truth is, when the economy takes a dip, so too does the Big Three market share. The Big Three, including the Chrysler Group of DaimlerChrysler AG, is on track to take a combined market share in the low 60% range for 2001, Mr. Girsky forecasts.

While the industry is on pace to sell 16.5 million vehicles in North America this year, the Big Three is selling as if total vehicle sales will only amount to 10.5 million – a rate the industry surpassed in 1993 and that Mr. Girsky terms “recession level.”

The domestic industry, he says, is suffering under four negative pressures: the weak yen as compared to the strong dollar; what Mr. Girsky calls a weak, “nowhere-to-hide” global market; an unraveling light-truck market; and market share pressures. While any of the Big Three could endure one or two factors, all four bearing down at the same time already have done damage to Chrysler Group profits and are poised to make the same impact on Ford Motor Co. and General Motors Corp.

The winners, as Mr. Girsky measures through operating margins: Honda Motor Co. Ltd. at 7.8%, with BMW AG, Toyota Motor Corp. and Nissan Motor Co. Ltd. not far behind. Virtually all Wall Street indicators place foreign automakers, especially the Asian automakers, in the dominant position. Residual values for a Honda Accord, for example, are 60% after two years, while a Ford Taurus has a residual value of 49% – proving that while it’s easy to blame a favorable exchange rate for Japanese automakers’ success, it certainly is not the only factor.

What’s more, foreign automakers are not just succeeding at their usual sedan-based strengths but rather are treading on hallowed domestic ground – the light truck segment.

The Honda Odyssey has gained eight points in the minivan segment in the last three years; the Tundra four points in the full-size pickup segment; and the BMW X5 is exhibiting some of the the most rapid growth in the sport/utility vehicle segment.

It’s what Mr. Girsky calls the “end of the gravy train” for the Big Three. While Nissan can open a new truck plant, as it plans to do in Canton, MS, and turn a profit off of those trucks no matter the weakness of the market, GM and Ford only stand to lose because they wagered on pickup truck margins that are being cut by as much as half.

While the problems are glaring, the turnaround strategy is not as easy. If the companies cannot improve margins, then they will have to take capital out, Mr. Girsky says, adding that automakers soon will reevaluate what core business really means. Powertrain and stamping divisions, for example, may soon be divestment targets for the Big Three, he says.

And while DaimlerChrysler and GM have tried to find solutions in equity alliances, it’s precisely those who have avoided consolidating that have the brightest future – Honda, BMW and PSA Peugeot Citroen, until recently on everyone’s “up-for-grabs list,” being the most notable.