Ford Motor Company (F) and Toyota Motor Corporation (TM) Poised for Success

GM is taking a slightly different approach, unveiling its diesel version of the Cruze this week at the Chicago Auto Show. In my opinion, it’s not going to make much noise. It is reported to get 42 mpg highway and 30 mpg in the city. Those numbers aren’t much better than the gasoline versions and it’s going to cost the consumer about $4,000 extra. GM also differs from Ford’s V-6 turbo-charged EcoBoost engine, as it opted to leave the engines with eight cylinders, which deactivates cylinders when not needed. GM’s reasoning is that eight cylinders burn less fuel while towing than a turbocharged V-6, which only makes sense if truck owners tow a majority of time spent driving. Of the three automakers in this article, GM looks to be behind in the fuel-efficiency game.

Bottom line
We’re in a situation today, where we must think both short and long term. Automakers must divide precious dollars for development into ICE innovations, alternate-power vehicles, or both. We’re likely to see a change in the market demands in the next six to 10 years, and I believe Ford and Toyota are both positioned for success. Consumers are aiming to purchase vehicles for fuel efficiency, rather than to reduce their carbon footprint. The truth is that ICE will be the reason automakers meet the CAFE standards, or fail. We might reach a day where innovation will allow combustion engines, in vehicles like the Fusion and Corolla, to reach 50 mpg. Those vehicles will determine future market share gains.

At this point in time it’s just difficult to predict which technology will be the winner to lead alternate energy to replace ICE. Toyota has always been ahead of the game for fuel efficiency, and rightfully earned its position as No. 1 automaker. Keep an eye on Toyota and Ford, as they seem best prepared for short-term and long-term trends. Finding companies like those two, with forward-looking strategies, is how to make your portfolio a long-term winner.

The article Ford and Toyota Poised for Success originally appeared on Fool.com and is written by Daniel Miller.

Fool contributor Daniel Miller owns shares of Ford. The Motley Fool recommends Ford. The Motley Fool owns shares of Ford.

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