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Can Ford Reclaim Toyota's Throne?

A new study shows Ford is overtaking Toyota in quality perception following Toyota's recent recalls. In light of this, do you think Ford can eclipse Toyota in sales?
Author:

NEW YORK (

TheStreet

) -- A recent study has delivered a rather surprising result:

Ford

(F) - Get Report

is overtaking

Toyota

(TM) - Get Report

in "perception of quality."

What's more, the study was conducted even before Toyota's unprecedented halt in sales and production of popular U.S. vehicles.

The study, by Bandon, Ore.-based CNW Market Research, asked 150,000 new-car shoppers how well they perceived the quality of cars from 36 brands on a scale of 1 to 10. The study showed that Toyota and

Honda

(HMC) - Get Report

have ranked #1 or #2 for the 1997 to 2009 model years of 20 non-luxury brands. However, Toyota dropped to #7 in the most recent study, with an average score of 8.51 out of 10 for the 2010 model year. Toyota's score was 8.97 in 2009.

Auto researcher Edmunds.com predicts Toyota's market share is likely to drop to 14.7% in January, Toyota's lowest since March 2006.

The study, on the other hand, showed that Ford -- which on Jan. 28 reported its first full-year profit since 2005 -- ascended from #14 in the 2006 model year to #6 for 2010 in new-car buyer quality perception.

Toyota's president Akio Toyoda on Jan. 29 told Japanese news agency NHK "we're extremely sorry to have made customers uneasy," on the sidelines of the World Economic Forum in Davos, Switzerland, according to

Reuters.

Toyota says it placed full-page ads in newspapers in more than 20 major media markets throughout the United States on Jan. 31 regarding Toyota's actions involving the sticking accelerator pedal recall.

On Jan. 26, Toyota announced that it is instructing Toyota dealers to temporarily suspend sales of eight models, and said it expects to stop producing vehicles on several production lines for the week of February 1. The announcements came after Toyota said the week before that it would recall about 2.3 million vehicles in the U.S. to correct "sticking accelerator pedals." Later, Toyota expanded the recall to China and Europe.

On top of that, Toyota on January 27 expanded a

TST Recommends

separate, ongoing recall

announced last year by 1.1 million vehicles. These vehicles are the subject of a recall related to gas pedals getting caught in floor mats and were originally estimated to affect 4.3 million vehicles.

All this comes at a time when Ford is already starting to show signs of improvement. The automaker on Jan. 28 reported its first full-year net income since 2005, and plans to be profitable on a pre-tax basis, excluding special items, for full-year 2010. Ford posted a full-year net income of $2.7 billion, or 86 cents per share, a $17.5 billion improvement from a year ago. Ford said it reduced automotive structural costs by $500 million compared with the fourth quarter 2008, bringing the total 2009 reduction to $5.1 billion. This exceeded the target of about $4 billion.

Ford said strong products drove full year market-share gains in North America, South America and Europe, while maintaining share in the rapidly growing Asia Pacific and Africa region. In the U.S., Ford, Lincoln and Mercury fourth-quarter sales were up 13% versus a year ago, leading to the first full year market share gain since 1995.

On a positive note for Toyota, a government official on Jan. 30 reportedly said that U.S. safety regulators are satisfied with a Toyota plan for fixing its most recent gas pedal problem, according to a

Reuters

report.

Given all this -- both Toyota's unprecedented actions for fixing its vehicle problems and Ford's exceptional recent performance -- do you think the tables have turned? And will Ford once again overtake Toyota in total sales? Take our poll below to learn the consensus of

TheStreet

.

-- Reported by Andrea Tse in New York

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