DETROIT -- A stroll through the vast North American International Auto Show last week showed that the Big Three automakers, despite falling profits and sales, were still in good shape when it comes to offering competitive products and keeping up with industry trends.

"I was really impressed with everything that I saw from each of the Big Three, although General Motors seemed to be the strongest among them," said Jack Nerad, editorial director of Kelley Blue Book. "They each had show concepts and new products that I thought were very competitive on a worldwide basis."

The Big Three still face challenges in meeting the rapidly changing needs of consumers, such as the desire for smaller, more fuel efficient cars, and the growing popularity of small crossovers.

Compact and small-car sales were up 4 percent in 2007, while midsize and larger vehicles sales were down by 5 percent, according to J.D. Powers and Associates.

"There's still this mentality that small cars mean small profit that goes way back in the industry," Mr. Nerad said. "When you have limited resources like the Big Three [do], you decide whether to put those in segments where you already have a presence or a name, or try to blaze new trails in segments where you aren't necessarily known."

As for designing small domestic crossovers to compete with the Toyota RAV 4s, Nissan Rogues and Subaru Foresters of the world, "I don't know if any of the Big Three have a platform that lends itself to creating a small crossover," Mr. Nerad said.

But, in slightly larger crossover segments, he added, "GM does have the Saturn Vue, which I think is a great product, and Ford does have the Ford Escape; and Mercury has the Mariner."

This year's show saw the display of only two domestic minivans: the Dodge Grand Caravan and the Chrysler Town and Country.

"Except for Chrysler and Dodge, the domestics have basically ceded a market that they invented -- minivans -- to the Japanese and the Korean brands," said Mr. Nerad.

"It's surprising to me that a company like GM cannot compete in the minivan segment. And the same is true of Ford. Here are big companies that derive a lot of their income from providing family-type vehicles, and more than 20 years after designing the modern minivan, they've just decided they can't do that," said Mr. Nerad.

In other ways, however, the domestics have made considerable progress.

Not so very long ago, domestic company car interiors lacked imagination, materials were shoddy, gaps between parts were obvious, and the color palette mainly consisted of shades of gray and tan.

Now, two-toned interiors are de rigeur for the domestic companies, and consumers will be hard pressed to find any shoddy materials, misfitted pieces or ho-hum design elements.

For instance, Ford's F-150 won the interior design show hands down with its 2009 models that showed effective use of color, various materials and strong ergonomics. Chrysler LLC's Dodge Ram truck looked for all the world like a luxury model inside. And General Motors' new Chevy Malibu and Cadillac CTS have interiors that look far classier and more expensive than their counterparts.

The Big Three have become trendsetters sure to get just as much attention for their designs as anything from overseas companies. Especially notable are Ford's Verve concept car, the Lincoln MKT, the Chrysler ecoVoyager and Cadillac's breathtaking CTS Coupe, with a muscular profile and vestiges of Cadillac's historic tail fins.

All of these cars have distinctly American themes and concepts behind them, proving that U.S. models no longer are mere knockoffs of European and Japanese schools of design.

All of the Big Three have found their styling voices and niches, and are unafraid to rely on their own ideas, their own brand heritages and their own interpretations of what consumers are looking for in their next automobiles.

Another plus for Detroit automakers: All three companies are making progress in meeting the twin challenges of alternative fuels and higher emissions standards by experimenting with diesel power, hybrids and even a good number of concept cars that use hydrogen fuel cells, electricity and other modes of power.

Another reason for optimism for the Big Three is that large sums of money are expected to be saved from recently signed labor agreements. All of the companies say a major portion of the savings will go toward the development of more daring American design themes in an attempt to boost sales at home.