Ford Motor Company (F), Toyota Motor Corporation (ADR) (TM), General Motors Company (GM): The Biggest Risk for Automakers

Ford Motor Company (NYSE:F), we know, is doing great. Their Fusion is getting great reviews, also their Escape. I like Ford Motor Company (NYSE:F) a little bit better. I think it’s about a year or two ahead of General Motors Company (NYSE:GM), at least from a product development standpoint and the turnaround with their One Ford Motor Company (NYSE:F) plan, as far as saving costs, getting to a common platform.

That’s one of the things that investors really need to keep an eye on. You can’t just get these stocks in your portfolio and not look at them for another 10 years. You constantly have to keep an eye that they continue to innovate.

We talked about earlier, General Motors Company (NYSE:GM)’s deal with AT&T bringing 4G into cars — stuff like that that I love to see from GM, which traditionally has not been the most forward-looking automaker, definitely getting back on track. I like that.

Europe continues to hurt these automakers, but Ford Motor Company (NYSE:F)’s plan in Europe, I think, is a good one. They’re cyclical, we know. That’s why they’re getting crushed so badly in Europe, but beyond cyclicality, I think not having any real competitive advantages overall and no moat for individual automakers is the biggest thing that investors have to watch.

It doesn’t mean they’re not a buy. I still think they’re cheap, but again I own the two big domestic automakers, so I think there is opportunity there. Investors just have to watch the space very carefully.

The article The Biggest Risk for Automakers originally appeared on Fool.com and is written by Brendan Byrnes and Andrew Tonner.

Andrew Tonner owns shares of Ford. Brendan Byrnes owns shares of Ford and General Motors (NYSE:GM). The Motley Fool recommends Ford and General Motors and owns shares of Ford.

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