Updated with CEO Alan Mulally's comments on conference call.

DETROIT ( TheStreet) -- Everything was falling into place for Ford ( F) even before Toyota ( symbol) said it would halt sales of eight vehicles.

Now, auto buyers will likely be even more willing to consider Ford vehicles, CEO Alan Mulally said on an earnings conference call Thursday, after the company reported strong fourth-quarter profits and said it will be profitable in 2010 and 2011.

"It's going to depend on how this all plays out and how fast Toyota gets this behind them," Mulally said. "With the void right now, I am sure there is going to be more interest in Ford, but the cool thing is it's going to be an opportunity for our products to be viewed again.

"The way we are approaching it (is) we are really focused on the customers and what they want," Mulally said. "Clearly everybody realizes that we are competing with the best in the world, including Toyota (and) we anticipate we will see more and more interest in Ford in 2010."

Ford is expected to benefit from Toyota's woes. However, in response to concerns regarding accelerator pedals, Ford said Thursday that it has halted production in China of the diesel version of the Transit Classic, which is built by a Chinese joint venture.

Only about 1,600 have been produced, and Ford partner Jiangling Motors Co., said there has been no problem. "Our assessment is it's very isolated," Mulally said. "Following our normal process, when anybody has an issue in the industry, we check everything." He said the joint venture switched suppliers in December."

While Ford gained market share throughout 2009 and also reported a $1 billion third-quarter profit, it had been reluctant to project a full-year 2010 profit until Thursday. Asked what had changed since the end of the third quarter, CFO Louis Booth responded: "I think we feel a little bit more positive that the green shoots are still there -- they haven't shriveled up." As the third quarter ended, he said, Cash for Clunkers in the U.S. and scrappage programs in Europe were clouding the picture.

Now, he said, "we're seeing a little bit more life in Europe" as some scrappage programs continue. The recovery remains fragile in the U.S. and Europe, but rapid growth continues in Asia and China. And most importantly, he said, "We obviously got a good quarter under our belts (and) continue to see good performance.

Still, headwinds remain in the auto industry. As Mulally noted, "The global industry has excess capacity (and faces) volatile commodity prices and a fragile supply base." Commodity prices are rising, and automakers are major buyers of commodities ranging from steel, plastics and resins to precious metals such as palladium and rhodium. Additionally, Ford's has higher debt levels, and higher interest payments, than its competitors.

Fourth-quarter net income was $868 million, or 25 cents a share. Analysts surveyed by Thomson Reuters had estimated 26 cents. Revenue rose 22% to $35.4 billion; analysts had estimated $32.6 billion. Fourth-quarter net income improved by $6.8 billion.

Ford has long forecast it will be profitable in 2011, but the current year guidance is a sign that the company's improvement is coming faster than had been expected.

For full year 2010, Ford said it will be profitable on a pretax basis excluding special items, for North America, total automotive and total company, with positive automotive operating-related cash flow, based on its assumptions.
FORD
Alan Mulally, Ford CEO

Ford was also profitable for the full year 2009, with net income of $2.7 billion, or 86 cents a share. In 2008, Ford lost $14.8 billion.

During the quarter, Ford North America's pretax operating profit was $707 million, a $2.6 billion improvement from a year earlier.

Ford stock rose sharply in premarket trading immediately following the earnings report, but was down 5 cents to $11.50 late Thursday morning.

-- Written by Ted Reed in Charlotte, N.C.