While not definitive, here is an interesting way to look at the “decoupling” discussion: BMW is diverting cars from the U.S. market (a market it still expects to increase sales in) to emerging market countries due to the weak dollar and slowing economy.
From the WSJ:
FRANKFURT -- BMW AG said it is diverting cars from the U.S. to faster-growing emerging markets, as the slowing U.S. economy and weak dollar dented first-quarter earnings at the luxury German car maker and its rival Daimler AG…
…BMW Chief Executive Norbert Reithofer said in a conference call Tuesday that the company decided late last year to look at redirecting cars between markets to mitigate currency impacts. Referring to the U.S., Mr. Reithofer said BMW is reallocating cars to more-profitable markets such as China and Russia. The weak dollar, in particular, makes German cars less profitable for BMW to sell in the U.S., because its construction costs are in euros. A spokesman for the company declined to say how many cars have been redirected from the U.S. He stressed that BMW still hopes to increase U.S. sales, though less ambitiously. In 2007 BMW sold 336,000 BMW, Rolls Royce and Mini vehicles in the U.S.”
BMW is basically saying that the while the U.S. market is still important, it needs to shift some of its focus elsewhere in order to continue to grow its business. I.e., it has to reduce its earnings dependence on the U.S. While not necessarily an example of “according to Hoyle decoupling”, it is a sign of how foreign companies (and their economies) can use emerging markets to compensate for a slowing U.S. economy and a weak dollar.
From my perspective, decoupling isn’t about whether the U.S. necessarily loses its position as the single largest consumer market, but whether the consumer markets of Western Europe and emerging market countries can (on aggregate) generate enough profits to compensate or at least mitigate the impact of economic slowdowns, currency weakness, etc. in the U.S.
Decoupling shouldn’t be discussed in terms of whether or not a foreign economy or company can thrive without the U.S., but whether or not their dependence on the U.S. is waning. Decoupling will happen very slowly and will be the cumulative effect of the actions of companies and economies reducing their dependence on the U.S. market; the discussion shouldn’t be around where or not it has happened but whether or not it’s “happening”.
I.e. tracking things like the recent actions of companies like BMW and Daimler (DAI), observing their success (if any) and seeing if other companies and economies follow suit.
Decoupling won’t be a sudden occurrence; it will be a slow and gradual evolution.
The Wall St. Journal: “Profit Hurt, BMW Diverts Cars From U.S.” – Edward Taylor, April 30, 2008.