The U.S. automotive industry has posted strong and consistent growth since exiting the past recession. That came to an end in 2017 as new light-vehicle sales declined a modest 1.8%, despite remaining near record highs. However, as this cycle plateaus, it's putting pressure on automakers to change strategies and adapt to the new market realities. That pressure has made for some interesting automotive stories in 2017: Here are three memorable developments. 

No profits? No thanks

Daniel Miller (GM Selling Opel): It was a wild year in the U.S. automotive industry, and one of the biggest stories revolved around a Detroit automaker, although it took place overseas. One of the biggest stories was easily General Motors finally exiting Europe and selling its Opel/Vauxhall division to Peugeot S.A. (NASDAQOTH:PUGOY) for roughly $2.3 billion.

General Motors has been entrenched in Europe for a long time, and for a long time, it lost billions of dollars there. In fact, GM hasn't printed an annual profit in Europe since 1999, and it has lost over $20 billion total in the region since. The move improves GM's ability to sustain its financial performance through down cycles, especially as the U.S. market slows, by reducing its exposure to Brexit headwinds and its European pension exposure. It also reduces required operating cash and improves its return on invested capital overall.

Perhaps this is one of the biggest stories from 2017 not because GM finally exited Europe, but because it represents a fork in the road where GM finally decided it would exit or reduce focus on unprofitable business to become more attractive to Wall Street. That's why GM has reduced its focus on passenger cars in North America, sold Opel/Vauxhall, and pulled Chevy out of Europe and Russia, while focusing on higher-return strategies such as trucks and SUVS, China, transportation as a service, and General Motors Financial.

GM selling Opel/Vauxhall improved its earnings per share and margins, lowered capital expenditure requirements, improved automotive free cash flow, and increased its adjusted return on invested capital. But it's one of the biggest stories from 2017 because it's an entirely new mentality for the automaker: It's only participating in markets that are lucrative. And that's a welcome change for investors.

New era at the Blue Oval

John Rosevear (Ford Motor Company): It's usually a big story any time a major company's CEO is replaced -- and Ford Motor Company's (NYSE:F) CEO shuffle was one of the biggest stories in autos in 2017.

Here's the recap: After months of frustration with Ford's stalled stock price, the Blue Oval's board of directors sacked CEO Mark Fields in May. His replacement: The head of Ford's future-mobility subsidiary, Jim Hackett. 

Hackett's mandate: To take Ford into the future, revamping the company to thrive in an era of self-driving cars and new models of personal mobility. To be fair, Fields had been making progress toward that future -- but the board apparently felt that he hadn't done enough to explain to Wall Street how Ford would thrive and profit in the future he foresaw.

Jim Hackett in front of Ford's logo.

Jim Hackett became Ford Motor Company's chief executive officer in May, replacing Mark Fields. Image source: Ford Motor Company.

So, why Hackett? For starters, he had been there and done that, remaking office-furniture giant Steelcase as a tech-savvy supplier favored by Silicon Valley. But there's more than that: Hackett is a well-read deep thinker with a keen understanding of how technological disruption unfolds -- and an ability to explain esoteric futurist concepts in plain language. 

What Hackett isn't is an auto-industry veteran. But he was savvy enough to set up a new management structure in which the job of running Ford-the-automaker from day to day is split between several well-respected Blue Oval veterans. So far, Wall Street has been cautiously optimistic -- but it'll take time to see whether Hackett can translate his big ideas for Ford into bottom-line growth. 

Model 3 delays are the big story of 2017

Travis Hoium (Model 3 Disappoints): Investors who own shares of Tesla (NASDAQ:TSLA) don't really own it for the existing products like Model S and Model X. They're looking for Tesla to upend the auto industry as we know it with mass-market vehicles like the Model 3 or a crossover dubbed the Model Y. The Model 3 set high expectations coming into 2017, and I think Tesla's poor manufacturing performance has been the biggest auto story of the year. 

As recently as August 2, Tesla said it expected to be producing 5,000 Model 3s per week -- a run rate of 260,000 per year -- by the end of 2017. Three months later, it pushed the date of that milestone back to the end of Q1 2018, and now it doesn't expect to hit it until Q2 2018 (if then). The reality was that only 2,425 Model 3s were produced in the entire fourth quarter, an annualized run rate of less than 10,000 units, and nowhere near Tesla's highly publicized mass production target. 

The delays in hitting production targets are key because it increases Tesla's cash burn and allows competitors to catch up to (and pass) Tesla. General Motors (NYSE:GM) sold 23,297 Chevy Bolts, which has specs similar to the Model 3, in the U.S. in 2017, second only to the Model S. But its ramp-up is going more smoothly, and it sold 8,995 units in the U.S. in the fourth quarter, beating the 7,430 Model Ss sold. With Nissan, Hyundai, Honda, BMW, and others expected to launch new or updated EVs in 2018, with more coming in subsequent years, Tesla is missing a golden opportunity to capture the EV market while it's young. 

What I think 2017 really told us about Tesla is that it isn't the expert manufacturing company it's made out to be. It doesn't have a history of being on time or on budget for its vehicles, and there's not yet evidence it can produce vehicles on the scale or quality comparable to any of the automakers I mentioned above. Tesla needs to become a world-class manufacturer to survive and thrive long term, and in 2017, we didn't get any reassurance that it can become that manufacturer. The market may not see it yet, but the failure to meet even its own production goals will become a bigger and bigger problem for Tesla. 

Daniel Miller owns shares of Ford and General Motors. John Rosevear owns shares of Ford and General Motors. Travis Hoium owns shares of Ford. The Motley Fool owns shares of and recommends Ford and Tesla. The Motley Fool has a disclosure policy.