Ford Motor Co. (NYSE: F) shocked most analysts with a first quarter profit of $100 million compared to a loss of $282 million for the same period last year.

CEO Alan Mulally’s turnaround plan for the company is based on heavy cost reductions – such as cutting expensive North American jobs – combined with new vehicle models. In the face of $15.3 billion in cumulative  losses in the last two years, this modest profit may show that Mulally’s plan is working.

Of course profitability is very important but Ford still faces an uphill battle against domestic competitor General Motors Corp. (NYSE: GM) and the world’s top car company (by the only measure that matters – profits) Toyota Motor Corp. (NYSE: TM). Making matters worse with its dependence on trucks, Ford’s vehicle lineup is ill positioned for record-high fuel prices. On the company’s home turf, a soft economy will only worsen demand in the U.S., a market that Detroit-based Ford has lost market share in every year for more than a decade.

Making matters worse, despite recent improvements in initial vehicle quality according to studies commissioned by Ford, the company admits that about half of vehicle shoppers no longer even consider its models.

This surprise profit is certainly good news for Ford – up more than 15% at midday today – but is it too little too late?

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