On the scale of the US, Detroit is not so far from New York. It’s just less than 500 miles and around 90 minutes by plane.

But last week I hopped between the two places and was struck the extreme contrast between post-crunch middle America and the country’s most internationally-minded city.

Detroit was always to rough, tough, industrial city, but the extent to which it was finally hammered into the ground by the global financial crisis is sobering.

General Motors and Chrysler were bankrupted mainly because they were producing domestic models that were anywhere from plain uncompetitive to completely out of date.

The state of the domestic US car industry was brought home to me by a visit last week to GM’s Hamtramck factory, the new home of the new Chevy Volt range-extender electric car.

Built in 1985, it contains 3.6m sq ft of space under one roof and a capacity of 400,000 vehicles per year.

In 2007 it was only managing 120,000 units. In 2009 it was down to just 35,000. Then again, the plant was building the V8-engined Caddy DTS and the 5.1m long Buick Lucerne, both proper, old school, US luxury saloons. Models that were serving a shrinking market.

You are reminded of the periodic slumps that hit the US car industry by the old Packard plant, just a few hundred yards down the road from Hamtramck.

But the plant lives to fight another day, and is converting to build news models on GM’s international (and mostly European-engineered) Delta and Epsilon platforms. 

For years the domestic makers have been slowly hammered by slick, reliable, Japanese vehicles, many manufactured in the US. European carmakers are becoming more serious about selling into the mainstream US car market, creating bespoke models such as the new VW Jetta.

No surprise, then, that Ford and, more recently, GM have had to use technology from their European and Japanese subsidiaries to try and stay competitive.

The streets of New York underlined the trend. Big, bruising, trad US cars are being replaced by slicker, more sophisticated, more Euro-flavoured machinery.

Indeed, the old New York cab looks like it could be replaced by the Turkish-built Ford Connect van. 

Ford’s big Taurus is a Volvo S80 underneath. The Fusion is a Mazda 6. Both have been well received, encouraging the company to go for its global ‘one-car’ policy and selling more sophisticated models in the US. The global Focus is on the way as is the global Mondeo.

At the launch of the Volt a couple of US journalists turned up in new Fiestas, all but identical to the UK car. Conventional wisdom says that America won’t buy cars like this, but times are changing. The reaction to the Mexican-built Fiesta has been very positive.

GM is close behind, having just launched the Buick Regal Insignia-sister car and is enjoying some success with the Chevy Cruze, sister to the Astra. And future Chryslers will be born from Fiats and Alfas.

Yesterday GM has announced plans for a new rear-drive Caddy that will target the BMW 3-series, a car that will be a world away from the huge, front-drive, DTS.

Defunct Detroit Iron is being replaced by European-flavoured steel.