Despite indications of the Chinese economy slowing down, General Motors Company (NYSE:GM) sales in China have now surpassed the total number of vehicles the company is selling in its home market, the United States. So, it would not be incorrect to say that General Motors Company (NYSE:GM)’ biggest market is now China. Sales in China surged 10.6% to 1.6 million in the first half of 2013. General Motors is also expanding its footprint in emerging markets such as China, Brazil, and India. However, General Motors Company (NYSE:GM) also faces challenges from the ongoing Euro-zone financial crisis.
GM reported earnings of $1.4 billion recently, which works out to $0.84 per share, beating the consensus estimates by $0.06 per share. However, earnings did see a decline of 6.7% as compared to the year-ago quarter, which was at $0.90 per share.
General Motors Company (NYSE:GM) is trading at about 8.42 times its forward earnings. Compared to this, Ford is trading at about 10.3 times, and it offers an attractive dividend yield of 2.4%. Like Ford, General Motors Company (NYSE:GM)’s P/E looks better than the industry average (8.0 against 14.2), and its lower valuation seems justified on a forward basis since it does not have a dividend.
Chrysler is a consolidated subsidiary of Italian auto maker Fiat. The Italian automaker also holds a slew of renowned brands like Alfa Romeo, Ferrari and Maserati. Fiat has a proud history to boast of, which dates back to 1899 and includes selling cars in more than 40 nations across the globe.
Chrysler posted revenue of $15.4 billion in the first quarter, a drop of 6% from a year ago. The company is slated to attain a delivery target of 2.6 million to 2.7 million vehicles in 2013. The Fiat brand reached sales of 100,000 units in May, which is an important milestone for the company in North America.
Chrysler posted an 11% gain for July, selling 140,102 vehicles. Total Chrysler Group sales, which include the Fiat, Jeep, Dodge, Ram and Chrysler brands, are up 9% year-to-date. Fiat generated 75% of its operating profits from America and hence is also considering moving its HQ to the U.S.A. as per reports from Bloomberg
Conclusion
Ford has a solid business model. It also has abundant resources at hand to capture new growth opportunities, and it has been doing the same through expansion into emerging markets. No wonder it is an investor’s delight, and it would be worthwhile investing in this company.
The article This Car Maker Is Cruising originally appeared on Fool.com and is written by ANUP SINGH.
ANUP SINGH has no position in any stocks mentioned. The Motley Fool recommends Ford and General Motors. The Motley Fool owns shares of Ford. ANUP is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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