Investing in Green Autos | Green Energy News

October 26, 2003 – Vol.8 No.31

INVESTING IN GREEN AUTOS.

All of the major automakers sell vehicles worldwide. And unless a manufacturer can find a reason - profit for instance - to sell a product line in a single market, he would likely rather sell the same vehicles globally. For these mass producers, global vehicles, because of the economies of scale, make economic/business sense. Though global or world vehicles are more common outside the U.S., many are here.

So, as more and more nations, under international mandate or not, work to control vehicle pollution and greenhouse gas emissions, automakers may decide that they had better make cleaner, more efficient cars for everyone, everywhere.

However, in large markets such as the U.S., automakers may still find sufficient profit in vehicles specialized for that market, and not care about global sales for those vehicles. Example: the market for large pick-up trucks is sizable enough in the U.S., to not bother with overseas markets for those trucks. Full-size pick-up trucks are mostly an American phenomenon, and are best sellers here.

Still, the automakers can’t ignore their global presence. Neither can their investors. Profits come from every market.

The World Resources Institute (WRI) and Sustainable Asset Management (SAM) have released a new report: Changing Drivers: The Impact of Climate Change on Competitiveness and Value Creation in the Automotive Industry. The report examines how emerging global policies will affect the auto industries’ role in climate change. The report is intended to give investors insight on how to select stock, given a manufacturer’s response to polices meant to increase fuel economy or reduce greenhouse gas emissions.

In other words, manufacturers that don’t comply with initiatives to reduce greenhouse gas emission anywhere on the planet might risk losing markets for their products. Lost markets mean lost revenues and lost profits that could lead to losses to investors.

The report is available at from WRI at http://www.wri.org/ or SAM at http://www.sam-group.com/ .