New Technology Could Breathe Life into Auto Stocks

Everything goes through waves of enthusiasm on Wall Street. It’s fascinating that the marketplace is now focused on the threat of inflation, like it didn’t exist just a few months ago.

Finally, the price of a barrel of oil has got people thinking that all prices could rise a lot of the near term. If you think about it, the vast majority of the products we use every day have some sort of petroleum product imbedded in their make-up.

One industry that has me enthused lately is that of vehicle manufacturers. Although it’s tough to take, it isn’t surprising that General Motors Corporation (NYSE/GM) wants to close four truck plants in North America. When concerning new vehicle purchases, everyone I know is thinking about fuel efficiency.

I really hope that GM’s new electric car, the “Volt,” will be a technological success and a sales success for dealerships. Toyota Motor Corporation (NYSE/TM) just announced that it is going ahead with a major effort to improve the battery technology in its hybrid vehicles.

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The battery seems like the real hybrid alternative for the near term. To me, I think it just makes sense. You drive around in your electric car, park it, and plug it in to recharge the batteries. In major urban environments, electric vehicles will go a long way to help reducing smog.

Not being an engineer, I can only suppose that an electric vehicle also means less moving parts and better overall reliability.

I often think that the big three domestic automakers are behind the curve on what customers want. What a GM, Ford or Chrysler needs is a new winner on their hands. They need a “Prius” to get customers enthusiastic about buying a car again. They need a runaway successful product to get people enthusiastic about buying domestic cars as opposed to the imports.

The next few years should see a revolution in hybrid vehicle innovation. I like the look of the “Volt.” I just hope it works.