Consumer Reports consistently gives Japanese automakers, such as Honda Motor, the highest marks. Among the American automakers, Ford is improving its cars’ reliability, and some of its fleet now rivals top Japanese cars. With improvements in model lineup, like the 2010 Ford Fusion Hybrid.

Bill Mann, portfolio manager of The Motley Fool’s Independence Fund, says that automakers outside of Detroit, such as Toyota, BMW and Mercedes, now a privately held company, are faring better. “Chrysler can’t really survive in its current form,” he says, adding that Detroit’s automakers are suffering from “battered customer syndrome,” consumers who are tired of buying poorly made cars. He says the new Ford Mustang and Chevrolet Camaro are the exceptions to that rule.

Toyota has been able to distance itself from Detroit because it’s perceived to produce quality cars, Mann says. Toyota was ranked a “buy” by Standard & Poor’s. The stock currently trades at about $80, and S&P’s 12-month target price for the stock is $97. Toyota’s revenues are projected to fall 20% in fiscal year 2010 to $172 billion, says S&P.

Mann encourages automakers to spend more time on their rental cars, which should be seen as an audition. He recently rented a Buick Enclave, which he liked and said would make him think about buying a Buick in the future. But when rental cars come stripped down and people have a bad experience driving them, it reinforces their stereotype about that car company.

He recommends Ford as a good buy because the company is cheap and it has avoided bankruptcy. Ford is ranked as a “hold” by S&P; it currently trades at about $7.75, and its 12-month target price as per S&P is $8.00. S&P says Ford’s 2009 sales will drop 23% because of poor demand and intense competition from other car manufacturers. Ford is trying to increase its profitability through new contracts with the United Auto Workers union, which could increase profits by about $2.5 billion a year in 2010, S&P says. But sales are expected to go up 10% in 2010.

Mann also recommends Tata Motors in India. The company recently released the Nano, the world’s cheapest car at about $2,500. The Nano is also transformational in India, which primarily relies on bikes and other two-wheeled transportation options, so the Nano could be competitive in other similar, developing markets, he says.

Rodney Johnson, president of HS Dent Investment Management, recommends Ford because it’s a cheap stock. The company is also reintroducing the Taurus, a popular car a few years ago, which should be able to claim back some sales, he says.

Johnson describes American automakers as “dead broke, ridiculously over-leveraged and unable to pay their bills.” He says these companies are in this state because of the Corporate Average Fuel Economy standards. Automakers have to meet certain fuel-efficiency standards, one standard for their fleet globally and another for their U.S. cars, which forces them to produce cars that they’re not good at making. He says American carmakers as producing good trucks, but since trucks and larger cars get poorer gas mileage than smaller cars these companies are pushed to produce cars that will better their overall fuel efficiency. “If you allowed automakers to make what they’re good at they’d be in much better shape,” Johnson says.

In its latest report on Ford, S&P asserted: “We believe that a shift to smaller vehicles and a reduction in planned fleet sales will hurt Ford’s market share in 2009.” According to the research company’s data, Ford, Lincoln Mercury (a division of Ford), Volvo and Jaguar made up 9.6% of cars sold in the U.S. in 2008, compared to 13.6% in 2006. Those automakers made up 19.3% of trucks sold in the U.S. last year and 20.2% of trucks sold in 2006.

Johnson would like to see a single CAFE standard rather than two separate ones, as cars overseas are more fuel-efficient and then the car companies could count their good miles per gallon European cars with their gas guzzling American trucks. “Fuel efficiency and pollution is a global concern, so why would you separate out the markets?” He also recommends buying BMW because the company has aligned its cars with customer demand and makes good sports utility vehicles.

The face of the auto industry is changing, and its peak locations might be changing too. Sacha Millstone, senior vice president at Raymond James, doesn’t expect to see new carmakers in the U.S. or Europe. Instead, she anticipates seeing more auto production from countries such as Russia, South Korea and China because this is where the newest car companies have been established.

Ronald Roge, chief executive officer of R.W. Roge & Company, also sees changes in the auto industry. “I think eventually we will see no more than five major global players with lots of smaller niche players around the world,” he says.

Charles Green, chief executive officer of Trusted Advisor Associates, challenges the automakers to do more than just improve their balance sheets. He says American car manufacturers are constantly at odds with the United Auto Workers union as well as their suppliers and customers rather than working with these people. “Until Detroit learns that collaboration gets you far lower costs than constantly aggravating competition, it will be engineering high cost cars,” he says, adding that a quick face-lift won’t save Detroit carmakers from bankruptcy.

The carmakers have an uphill battle before them. “We burned off quite a bit of inventory due to the cash for clunkers, but the demand side is still a shelf of its former self,” says Matt Lloyd, chief investment strategist at Advisors Asset Management. He doesn’t anticipate seeing another large, global carmaker shutting its doors though.