Has Ford (NYSE:F), the venerable automaker, finally completed its turnaround?

Ford sold 33% more vehicles this past December than it did in the prior-year period. That's an incredible result when judged against the 15% average industry gain for the month, and the results out of bankrupt U.S. competitors General Motors and Chrysler. They reported sales declines of 6% and 4%, respectively. For all intents and purposes, Ford left Uncle Sam's car companies in the dust.

Furthermore, four of the top 20 best-selling vehicles in the U.S. last year were Ford brands. Sales of its top-10-selling Fusion model surged 83%. I'm guessing it didn't hurt that the car was named Motor Trend's 2009 Car of the Year.

Speaking of the Fusion, yours truly -- a self-proclaimed Japanese-car lifer -- is even thinking about making the popular hybrid his next vehicle purchase. (I've only actually owned one car in my life -- a 1998 Honda Civic --- and she's got plenty of miles left in her, I hope, but I'm just sayin'.)

Finally, Ford estimates that its 2009 U.S. total market share actually rose 1% to 15%, marking its first annual gain since 1995.

Yeah, I'm ready to call this a comeback.

Pump your brakes, kid
Ah, but here comes the cold rain on what appears to be a seemingly justifiable parade.

Despite those great December figures, Ford's sales were still down 15% for the full year. And you can bet that sales would have been far worse if not for the government's now-legendary Cash for Clunkers program, which forked over an extra $3 billion to auto buyers last summer in the form of tax credits. That helped move a lot of inventory off the lots of major auto dealers like AutoNation (NYSE:AN).

And as good as Ford's December sales were, they trailed those of foreign competitors Kia and Hyundai, and barely edged out the world's largest automaker, Toyota (NYSE:TM), which came in with a 32% increase in sales. Just to keep score, Honda's (NYSE:HMC) were close behind at 24%.

More worrisomely, there's just no telling when this improvement on the top line will translate to steady profitability on the bottom. Despite reporting it an operating profit last quarter (and its first quarterly North American operating profit since 2005), Ford is unlikely to show a profit for the full year. In fact, it might be some time before it can turn a full year's profit. Ford's operating margins have trended lower for years:

Years

Average Operating Margin

1995-1999

5.7%

2000-2004

2.1%

2005-2009

(3%)

Source: Capital IQ, author's own calculations.

Swerving ahead
Make no mistake, though -- Ford's story has certainly made a turn for the better. The company's labor agreement with the United Auto Workers (UAW) took Ford off the hook for funding future UAW retiree health benefits. It wasn't cheap to do so, and Ford still owes $13.1 billion. But that move significantly reduces Ford's future liabilities and labor costs, and finally puts the company on a more even keel with its European and Japanese competitors.

More importantly for the near term, Ford reached an agreement with its creditors back in November to extend until 2013 repayment of nearly $8 billion in debt initially coming due in December 2011. Ford will have to pay slightly higher interest costs as a result, but in return, the company gains valuable time to build up cash while economic conditions and vehicle demand improve.

Ford remains heavily reliant on its popular F-Series pickup truck, still the best-selling vehicle in the U.S. But its Focus and Fusion brands are gaining considerable traction in the faster-growing fuel-efficient small vehicle markets. At the same time, Ford is making significant strides in international markets. It's currently building an assembly plant in China that will introduce its popular Focus brand to a wider customer base in Asia, and it's retooling a plant in India that will build the new Figo, a small car designed compete with Tata Motors' (NYSE:TTM) popular Nano.

Let's not leave management out of the shuffle here, either. CEO Alan Mulally has made some incredibly gutsy maneuvers in his three-year tenure, first in negotiating a new landmark contract with the UAW in 2007, and then standing fast against government bailout money last year when it appeared to be the only sensible thing to do to stave off bankruptcy. Yet those actions, combined with his relentless efforts to reduce Ford's cost structure and realign its manufacturing base to meet the rising demands for fuel-efficient vehicles, look like they are finally paying off. The former Boeing (NYSE:BA) engineer and executive appears to be the right choice for the job.

Then there is Ford's stock price, which has risen almost 700% off its 52-week low. Is all this potential good news priced in? Don't be so sure. Ford was once a $70 billion company. Today it trades for around half that value. The road ahead is fraught with potential roadblocks, but one could argue that Ford's future hasn't looked this bright in decades.

Let's go find out for sure
The Fool is heading to Detroit next week to attend this year's North American International Auto Show (NAIAS). Better still, we're going to get some personal face time with Ford CFO Lewis Booth. Our Stock Advisor service recommended Ford as a top buy back in November, and so far that bet is off to a strong start, crushing the market.

Beyond just Ford, we'll have front-row seats to 60 new vehicle premieres, the latest in alternative-energy offerings, plus access to top auto-industry leaders and thinkers from around the globe.

Have any questions for Mr. Booth, or want us to check anything out for you while we're at the show? Post your comments below.

Fool contributor Matthew Argersinger doesn't own shares of any of the stocks mentioned, but hopes that he somehow gets to test drive Ford's new 2011 Mustang GT at this year's auto show. Ford Motor is a Motley Fool Stock Advisor choice. Try any of our Foolish newsletters today, free for 30 days. The Motley Fool has a disclosure policy.