Is General Motors Company (GM) Ready to Turn the Corner? – Ford Motor Company (F)

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On a higher level, General Motors Company (NYSE:GM) will embark on its “Find New Roads” campaign. It’s supposed to inject emotion back into its brand image and as a bonus will translate well for its global markets. The first 90-second commercial gives a preview of how it will showcase its vehicles and let them shine for themselves. I was a fan of the Frank Sinatra bit myself, and the rest was an improvement on previous advertisements.

Issues remain
Make no mistake: Fixing its weaknesses in marketing won’t cure all of GM’s ills. As millennials age, they will become the future of purchasing power. The group currently represents 79 million people and $170 billion of purchasing power, and GM will need to prove it can adapt its marketing as Ford Motor Company (NYSE:F) is doing.

Aside from marketing, it still has a long way to go to fix its less-than-desirable margins and earnings. Its management must also prove to investors it can consistently make good decisions before the stock price rises accordingly. Management was criticized for being slower to close plants to match demand in Europe, causing massive losses. Ford Motor Company (NYSE:F) also incurred losses, but it reacted much faster, which could set the stage for a quicker breakeven date.

Bottom line

While issues remain and General Motors Company (NYSE:GM) still trails Ford Motor Company (NYSE:F) in many factors, there’s still a lot of potential in GM as an investment. It represents a real chance to be No. 1 in global sales for 2013, and if it can create more operating efficiency it will see a surge in earnings. I believe Detroit learned some very difficult lessons during the recession and thus far is reluctant to resort to the old ways of high incentives and poor management. Detroit is slowly but surely convincing consumers that it competes with imports on quality and price. Investors should keep an eye on how GM executes its “Find New Roads” campaign, as it will be key to the success of its portfolio refresh. As long as weaknesses are fixed one at a time, the road ahead should much better for GM investors.

The article Is GM Ready to Turn the Corner? originally appeared on Fool.com and is written by Daniel Miller.

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

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