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General Motors (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 (F) naming a new Chief Executive could mean that the long-promised turnaround is imminent. For investors, Toyota (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