Ford Motor Company (F), General Motors Company (GM): Volkswagen, King of The Chinese Road

Competitors

Ford is likely to benefit from the same reasons as Volkswagen, especially in the less developed areas and is spending $5 billion in the next three years, opening 5 plants and introducing 15 models.

General Motors Company (NYSE:GM), led by Buick, increased vehicle sales by 13% in Q1 2013. It however lost market share due to better performances from Ford and Volkswagen. General Motors Company (NYSE:GM) also plans to be a big spender in the next four years, pumping in $11 billion along with its partners into the Chinese economy.

Laggard Toyota Motor Corporation (ADR) (NYSE:TM), the world’s largest car maker has struggled in China with only 4% market share, its April 2013 drop of 6.5% was its 9^th drop in 10 months. It too plans to expand its presence in China increasing capacity to 1.2 million vehicles by 2015.

* With Partners

Unlike Detroit, German engineering never lost its edge nor its brand image. As Volkswagen makes its comeback in America its emphasis is on “German Engineering.”

I own stock in Ford and plan to hold it for at least another three to five years. While I don’t own Volkswagen yet, its continued strength in growth markets such as China, huge brand recognition worldwide and the vigor and dynamism brought by the new team, suggests that the market is underpricing Volkswagen at only 38% of sales. Time to take a closer look.

The article Volkswagen, King of The Chinese Road originally appeared on Fool.com.

Bobby Shethia has a position in Ford. The Motley Fool recommends Ford and General Motors. The Motley Fool owns shares of Ford. Bobby 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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