A known devil is better than an unknown devil, specially if it is one that you can beat.

Apparently, General Motors, Ford and Chrysler are not the only ones praying for their rescue. Rival Foreign car makers, specially Toyota, are reported to be endorsing some form of federal aid to keep the Big Three afloat.

"We support measures to help the industry," Toyota Motor spokeswoman Mira Sleilati was quoted in the media as saying. "We just want a strong, competitive healthy industry." After the Senate disapproved of a stopgap measure to provide an interim $14 billion loan that would keep the trio afloat till the Obama administration moves into the White House in January 2009, the outgoing Bush administration is said to be mulling options that would provide American automakers some aid from the $700 billion approved to bailout banks and Wall Street firms.

Though it would seem surprising at first glance, Asian car makers say they have not lobbied against bailing out the Big Three. Given that their collective fate is so intricately intertwined, the fallout of a bankrupt GM and / or Chrysler would be so great that Toyota, Honda, and other Asian auto manufacturers would rather have GM and Chrysler rescued than go out of business.

Foreign car markets produce a total of around three million vehicles a year at US facilities. They see that their production would take a hit if any one of the US automakers went under, since any bankruptcy out of the Big Three would cause a ripple effect across the auto parts supplier industry.

On account of the extensive overlap between the car companies' supplier base, most parts in an automobile have a single supplier manufacturing them. No wonder that the consequential bankruptcies would disrupt production severely and for a prolonged period. That would mean months before Toyota would be able to resume normal production.

Not counting the shared supplier base, a number of car dealers in the US sell both American and foreign brands. A failure of a US car company would impact the sales and distribution dealer network of other car companies as well.

On the macro economic side, the impact of a bankruptcy would be a bit one on the reeling US economy, which would dry up demand for automobiles in the US that have already hit a 26-year low in November.

The erstwhile robust US economy that Toyota and the others foreign car makers depend on would suddenly not be as attractive, or lucrative. Given the the US is the largest auto market in the world, and possibly the most important one for auto companies like Toyota, Honda and Nissan, US sales for these companies are expected to be lower for the first time ever.

Toyota has already said that it has put on an indefinite hold plans for a new plant in Mississippi which was to start building its hotselling Prius in 2011. The plant is around 90 per cent complete, and would mark the first production of the Prius on US soil.

In the event of a failure of one of the Big Three, foreign car companies would definitely stand to gain market share eventually. However, the short term pain would be excruciating as inventory sales of the failed automaker at throwaway prices would depress prices across the industry in the short-term.

However, the biggest threat for these companies is the emergence of new competition.

Reports in the US media suggested that in the event of one of the car companies going bankrupt, Indian or Chinese auto companies could possibly buy up the assets of the failed company, creating a new low-cost competitor within the US, and changing the dynamics of the game. Reports pointed to India's Tata Motors, and China's Geely as two who have envisaged interest in expanding into western markets such as the US, and would not hesitate to acquire brownfield sites .

Evidence of this threat is visible in Korean manufacturers Hyundai and Kia eating into sales of Honda and Toyota's smaller, more inexpensive offerings, even though it has taken the two decades. However, by picking up a US auto maker's assets, vehicle designs, and distribution network of dealers, a new Indian or Chinese competitor could well hit the ground running, becoming a low-cost threat a lot faster than the Korean manufacturers.

Toyota and Honda have also grown organically, building facilities from the ground up to expand. Hence, they would not be predisposed to acquiring the distressed assets of a failed US auto company, having never used the acquisitions route to expand previously.