To a greater extent than its rivals, Ford (NYSE:F) is more dependent on the European market and had been counting on the continent to further bolster its bottom line. Yet even a $732 million pre-tax loss fourth-quarter loss in the segment doesn't keep the automaker from being the best investment in the industry.

A continental breakfast
While the entire industry's sales on the continent have fallen to a 17-year low, Ford is the one most sensitive to the decline.


% Sales From Europe,
Current Period

% Sales From Europe,
Year-Ago Period




General Motors (NYSE:GM)



Toyota (NYSE:TM)



Honda Motors 






Source: Standard & Poor's Capital IQ.

Obviously the health of the continent is important to everyone, but none more so than Ford. Moreover, the losses Europe creates for Ford are growing worse -- almost $1.8 billion in 2012, a hole 45% deeper than it was in 2011. So it's understandable that when the automaker reported guidance that offered little hope for improvement overseas, investors sold off the stock.

Indeed, not even Renault's chairman, Carlos Ghosn, expects Europe to turn around for at least another three or four years, while Fitch Ratings says it could be as long as a decade, if ever, before it regains it footing. Parallels are drawn to Japan, where auto sales peaked more than two decades ago and have never gotten close to those numbers again.

All this sounds horrible, so why do I almost glibly suggest that Ford is still the top carmaker to invest in? Because North America is a cash-generating machine. Sure, Ford will need to minimize how much Europe sucks out of its operations, but it's not a situation that is fatal.

Ford was Detroit's top-selling automaker in January, enjoying 22% sales growth ahead of GM and Chrysler, which rose just 16% each. In fact, Ford had three of the top 10 vehicles for the month, with the F-series pickup being the overall winner. The automaker also posted pre-tax profits of $1.87 billion for the North American division, nearly doubling the segment's operating margins and pushing them to 10.4% for the full year.

Going full throttle
As much as Ford dominates full-size trucks, together the Big Three control 93% of the truck market. GM's Chevy Silverado was the second best-selling vehicle in January. Toyota would like to break their stranglehold because it's such a profitable niche, so it is redesigning its Tundra. However, during Toyota's best sales year, 2007, it sold 197,000 trucks; last year it moved just 102,000 trucks. Nissan is also looking to update its pickup truck to gain some of those profits, but with just 22,000 sold last year, it's little more than a bug on Ford's windshield, which sold 645,000 pickups.

According to analysts at Morgan Stanley, each pickup truck Ford and GM sell brings in anywhere from $8,000 to $10,000 in gross profit. For Ford, the F-series alone accounted for 90% of its earnings last year; at GM it was 66%. Those are cash cows not to be trifled with, but the U.S. automakers aren't taking any chances as Ford recently unveiled its Atlas concept truck and GM is jiggering the Silverado and GMC Sierra lines. The question is, will truck buyers wait a few years until they're on the market?

This is nice and cozy
As much as it's fun to talk about these big, beefy trucks, it's important to remember Ford has a softer side, too. The other two vehicles in the top 10 were the Fusion and the Escape, a midsize and compact car, and it had two more cars among the top 20. Ford may have sold twice as many pickups as it did Fusions, but Fusion sales were 65% ahead of what they were last January. And Escapes were up almost 16%, coming in at No. 10 on the list. Its F-series grew at almost 22%.

As a result, Ford is now only second to GM in market share, beating out both Toyota and Chrysler for the "we try harder" spot. I believe it has a good chance to keep growing that share and putting distance between it and the rest of the also-rans. It's even been gaining ground in the hybrid market, where its Fusion is stealing customers and share from Toyota, calling 70% of the customers buying the hybrid vehicle "conquest" customers, or those who are new to the brand. Its market share jumped to 9% by the end of December, while Toyota's fell to 8%.

Still a force to be reckoned with
Ford is generally recognized as one of the strongest global manufacturers, no doubt because of the financial pain it was willing to endure at the height of the financial crisis to get their balance sheet in order. It's also generally expected to be the one that will weather the storm in good fashion and come out better on the other end because of its dominating presence in full-size pickup trucks that finance all its other divisions; a popular range of compact, midsize, and alt-fuel cars that are gaining market share; and strong profits that are only offset by a depressed European market.

I'd say that makes Ford stock one you should be willing to get behind the wheel with!