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General Motors (NYSE:GM), the world's largest automaker, will offer longer warranties on its cars. The extended warranties mark the next phase of an eight-month-old initiative to rely less on cash incentives to generate sales. The warranty will be five years or 100,000 miles.

The WSJ reports that Ford (NYSE:F) naming a new Chief Executive could mean that the long-promised turnaround is imminent. For investors, Toyota (NYSE:TM) is way ahead of General Motors. Of course, that is not shocking, given the companies' divergent bottom lines. Last year, Toyota generated more than $12.6 billion of profit, whereas GM lost $11.3 billion, and Ford lost nearly $1.6 billion.

The numbers make it easy to see which company is favored. But which will be the better investment? In a sense, the best thing to do is separate the two questions and try to focus on valuation. Toyota is obviously in much better shape than GM or Ford. But which is a better investment becomes a dicier question. Toyota might be a great company, but it is priced as such. GM and Ford aren't great companies right now, but they are also priced as such.

Source: Rob Black's Transport Stock Report