Ford and GM are going in different directions ~ Hybrid Car Review
Hybrid Car Review: Ford and GM are going in different directions

Tuesday, August 15, 2006

Ford and GM are going in different directions

It seems that Ford and GM are heading in different directions according to investors today. Despite the fact both companies are in the midst of restructuring and hemmorhaging money every quarter, investing in the Detroit automakers may not be a bad idea in the near future.

Source Reuters:

Shares of Ford Motor Co. rose today while larger rival General Motors slipped after a Bear Stearns analyst changed his ratings on both automakers.

Peter Nesvold raised his rating on Ford to "outperform" from "underperform," and lowered GM to "underperform" from "peer perform."

But I wouldn't be so quick to jump into the market right now. It's expected that Toyota will soon pass GM for the number one carmaker on the planet this year. Also, despite car buyers being more satisfied, Ford and GM are still lagging behind foreign automakers in the satisfaction ratings.

According to the University of Michigan American Customer Satisfaction Index, auto makers have increased satisfaction across the board in quality, raising the percentage of satisfied customers to 81%. Toyota led the way at 87%, followed closely by Buick (GM) and Honda at 86%. Fords luxury division, Lincoln Mercury came in at 83%. But the non-luxury brands for GM and Ford weren't rated as highly. GMC (GM) had an average of 82% while Ford was rated lowest at 77%.

In other words, GM and Ford may be successfully restructuring, but until they start competing with Toyota in quality (for their non-luxury, mass sales divisions), they are going to keep losing ground in sales.

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