General Motors, Ford Motor Co. and DaimlerChrysler all suffered sales declines in March, while Toyota saw gains.

The Wall Street Journal reports today that, "Detroit's Big Three automakers face worsening economic headwinds as they head into the crucial spring selling season, threatening their efforts to stem sales declines."

The WSJ continues:

General Motors Corp., Ford Motor Co. and DaimlerChrysler AG's Chrysler Group have suffered year-over-year sales drops as they work to restructure and wean themselves off lower-margin sales to daily rental fleets. Yesterday, the Big Three posted sales declines for March, while Toyota Motor Corp.'s sales rose 11.7 percent, making it the Japanese automaker's best sales month ever.

According to Autodata, GM's sales declined 4 percent to 345,418 vehicles in March, Ford's 9 percent to 263,441 vehicles, and DaimlerChrysler's 4.1 percent to 228,077 vehicles.

AutoIndustry.co.uk reports:

In a now-familiar pattern of U.S. manufacturers losing ground to Japanese and other competitors, Toyota sales rose 11.7 percent year on year to 242,675 units, while Honda's rose 11.3 percent to 143,392 leading the company to forecast a record year, and Nissan's were up 7.8 percent to 111,119.

Overall, WSJ says, the largest auto markets continue to present challenges. Retail sales — considered the best gauge of consumer demand — dropped 17 percent in California and 11 percent in Florida through the first 10 weeks of the year, according to CNW Marketing Research.

And what about automakers in China and India, the world's most populous nations and fastest-growing major car markets?

Well, dear readers, I'm glad you I asked.

According to a report on the global economic outlook published by credit rating agency Standard & Poor's last month, global economic growth is disproportionately riding on India and, to an even larger degree, China, both of which have seen energy demand rise sharply.

As the report On The Road To Big Profits In China And India, Global Automakers May Hit Some Bumps points out, automakers' hopes are riding particularly high in the burgeoning auto markets of China and India due to the significant investments already made in this market.

However, despite their high potential, the two markets pose high credit risks for foreign automakers due to intense competition, quality issues in local manufacturing operations and uncertainties when it comes to intellectual property (IP) rights, as well as the high volatility that is inevitable in emerging markets, according to the report.

Nonetheless, the room for growth in car sales is tremendous. Fewer than 20 in 1,000 driving-age Chinese and Indians owned a car in 2006, compared with 900 per 1,000 in America. Purchasing power is expected to grow above 10 percent per year in China and by more than 7 percent per year in India over the next five years, Forbes notes.

The two markets are in different stages of development, and the report points out the major differences between the Indian and the Chinese markets.

In India, the second fastest-growing auto market, passenger cars sales grew by 16 percent in 2006 compared with only 8 percent a year earlier, fueled mainly by increases in the small-car segment boosted by tax benefits, new model launches and greater access to consumer financing.

Only yesterday, in a sign of the intense competition among foreign automakers vying for a share of the Indian automobile market, The Associated Press (via The Chicago Tribune) reported that France's Renault SA "introduced its low-cost Logan sedan in India through a joint venture with local automaker Mahindra & Mahindra, boosting competition in the fast-growing Indian car market." AP also noted, "Global automakers have been stepping up efforts to increase their presence in India, where the economy is growing close 9 percent annually and demand for cars is strong, thanks to rising middle class incomes and easier access to loans."

However, the predominance of cheaper, locally manufactured motorized three-wheelers, which still hold nearly 80 percent of India's total vehicle market, is dampening the international original equipment manufacturers' (OEMs) chances of gaining from the aforementioned small-car-segment-boosting benefits.

The competition in the Chinese auto industry is more intense than in India, which is still dominated by a few large players; this situation, the report says, is bound to change due to the current attempts of all international OEMs to gain a greater foothold in this market.

In the more developed Chinese market, though, every major international manufacturer is already present through imports and, increasingly, with local assembly and production plants. This has enabled foreign players — the U.S., Europe, Japan and South Korea — to capture about 70 percent of the Chinese market through joint venture partnerships. On top of that, there has been a significant rise of local players such as Chery Automobile and Geely Automotive, plus about a hundred other small companies. Rising competition in China has led to manufacturing overcapacity and a rapid decline in automakers' profit margins there to a level largely in line with the rest of the world, at 4 percent to 6 percent.

Yet J.D. Power and Associates forecasts that China could overtake Japan to become the world's second-largest automotive market as early as this year. It is already the world's fourth-largest manufacturer of automobiles after North America, Western Europe and Japan, and the third-largest producer of commercial vehicles behind the U.S. and Japan.

Whereas intellectual property risks are likely to continue to be a problem in China, India's strong British-model legal system is better at safeguarding IP. But India has high tariff barriers for imports of new cars and more than 120 percent rates on secondhand vehicles.

As for The Big Three's DaimlerChrysler, apparently there have been vocal calls from some managers to cut struggling Chrysler loose. According to The Detroit Free Press today, speculation about the fate of Chrysler Group "ratcheted to a fever pitch" yesterday in Germany as time ticked to today's annual meeting for DaimlerChrysler AG shareholders.

"A deal to sell the Auburn Hills-based unit of DaimlerChrysler could be reached as soon as next week, a major German magazine reported Tuesday."

Update: Dr. Dieter Zetsche, the Chairman of the Board of DaimlerChrysler AG, has publicly confirmed that discussions have taken place with interested parties regarding future options for the Chrysler Group.

Earlier: Auto Industry Outlook: Sinking and Soaring