Honda Motor Company (HMC)

For the first time during May 2008, the Honda Civic sold more than 50,000 units as consumers responded to record gasoline prices, making it the best selling car in America. The rapidity of the growth in demand has left Civic inventories at a mere 16 days.^[1]

Success with the Civic is evocative of Honda's wider growth despite a downturn in US auto sales. For the first six months of 2008, Honda's US sales increased 3%, while the market decreased 11%. At the same time, Honda's major competitors all saw a considerable sales decline, with GM's sales falling 18%, Ford's down 14%, and even Toyota's dropping 7%.^[2]

Honda is the U.S. leader in fuel efficiency, which is becoming ever popular as oil prices rise. They claim to have come up with the first hydrogen powered car. The Honda FCX Clarity is a hydrogen powered car that claims to have twice the efficiency of traditional gas and electric hybrid vehicles. And it doesn't emit greenhouse gases. Ever. No matter what mode it's in. (Although one could argue that the greenhouse gases involved in creating the electricity portion are an issue.)

Honda (HMC) is looking for a way to compete in an auto market that is increasingly focusing on green technology and decreasing dependence on rising gas prices. And with the Clarity, Honda may find itself back in the game (its own gas and electric hybrid attempts were creamed by the Toyota (TM) Prius).

Right now, though, only a few people can test-lease the Clarity. This is because there aren't many hydrogen fueling stations around. Honda wants to make sure the Clarity's drivers have access to fuel, so the initial offering, here in the United States, is pretty much based in certain parts of California. But if investment in this grows, and if the Clarity finds success, it may be that Honda finds its green motor stock rising.

Honda's motorcycle business establishes the firm's name brand in high growth areas such as India and China.