Investors looking for a three to four year investment opportunity in the automotive industry should turn to Ford (F). Though the company has a few weaknesses on the balance sheet, I believe the automotive manufacturer is trading at a safe price with good long term upside.

Taking care of business in North America

Ford looks very healthy in its largest market, and appears poised to improve its regional position. In Q3 2012 the company reported an all time best net profit margin of 12%. This represented an increase of 3.4% in North America over Q3 2011. Ford also reported strong revenue growth of 8.3% and higher average selling prices than the prior year. Thanks in part to marked improvement in its wholesale division, the company was able to post better unit volume growth than arch rival General Motors (GM). While General Motors’ North America unit volume also grew by 1.75% year-over-year, this represented a smaller improvement in market traction. Indeed, Ford posted 90bp better than General Motors, which saw its market share decline by 190b year-over-year.

Of the two largest American automakers, I like Ford’s future growth prospects at home more. Even though General Motors reported higher revenue, Ford North America’s pre-tax profits were 28% better. When looked at in conjunction with the aforementioned metrics, I believe this indicates that Ford is showing superior cost management practices. Moreover, it would appear that in the three fields that count the most, Ford is illustrating higher profit margins, better profit growth and stronger unit sales growth. To continue reading, click here.