General Motors Company (GM), Ford Motor Company (F): Comeback Time For This Auto Company

Competitors

Ford Motor Company (NYSE:F), Toyota Motor Corporation (ADR) (NYSE:TM), and Honda are the primary competitors of GM.  Until recently, GM suffered share loss to these players resulting from less fuel-efficient vehicles.  However, today that is no longer the case.  General Motors Company (NYSE:GM) is still the leader in market share, with 17.9% of the global market on a TTM basis.  Ford is second with a 15.6% market share on a TTM basis.  Toyota is in third place at 14.5% of the global market.   This chart has the market share data for the past thirteen months.

Toyota has gained 9.3% in sales this year, while Ford Motor Company (NYSE:F) and GM have gained 5.3% and 3.5%, respectively.  In terms of operating margins, Ford and Toyota are quite similar, but GM is far behind.  Ford has an operating margin of 4.97% and Toyota has an operating margin of 4.82%.  GM is at 1.88%.

Conclusion

GM, in recent years, has traded within a range of 9x – 11x trailing earnings.  Street consensus for FY13 earnings is $3.40 (up from $2.92), and $4.37 in FY14.  If General Motors Company (NYSE:GM) can execute on its margin improvement plans, industry trends are likely to be favorable for GM.  It should benefit from a recovery in North American volumes, growth in South America, and continued growth in China.  While European demand will soften from already relatively low levels, GM’s cost savings plans can still lead to EBIT growth in Europe.  If you are looking to own an auto stock, GM is may have the most upside.

The article Comeback Time For This Auto Company originally appeared on Fool.com and is written by Mike Thiessen.

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