Honda Costa Mesa to Lease Hydrogen Cars

Orange County Business Journal, Jul 28-Aug 3, 2008 by Cruz, Sherri

SoCal Malls Surviving Economic Slide Better than Many National Locations

MARKETPLACE

Traditionally, dream cars have been shiny sports cars full of zip and status.

But these days there is a new dream car one that costs $20 tor a tank of gas that can last 270 miles.

About 70,000 people nationwide have signed up to own the Honda FCX Clarity, a hydrogen-fueled sedan from Honda Motor Co. Only 200 are being leased to start.

Johnnie Liddi, general manager of Power Honda Costa Mesa, one of three dealers in the nation leasing the car, said there is a lot of interest in spite of the higher cost.

The FCX Clarity will lease for $600 a month for three years, including maintenance. Luxury vehicles like Lexus and Audi typically lease for $300 to $400 a month.

The FCX Clarity cars are about to be delivered. A few Orange County customers will be among the first drivers.

At the end of three years, the customers will turn the cars back in to the dealer. No other plans have been made beyond that, Liddi said.

Honda wants to demonstrate to the market that it has the technology, he said. Then it's up to the market to demand the car and entrepreneurs to open hydrogen fuel stations, he said.

Filling up a vehicle with hydrogen is much the same as filling it up with gas, he said.

Some drivers of test vehicles have said that the fueling process is a little complicated in the beginning. There are a half dozen semipublic filling stations in Southern California so far.

The cars are built by hand in Japan. Liddi said the factory is "cleaner than a hospital."

In other news at the dealership, Power Honda is up 45% in new auto sales this year, compared to the same period last year, Liddi said.

The second half of the year might not be as good, he said. Sales began to dip in May.

From here on out, dealers are looking to run their businesses as efficiently as possible, he said.

"You pay attention to all the details," Liddi said.

Retail Health

Thanks to the relative affluence of Southern California, malls here are holding up relatively well during the economic downturn, compared to the rest of the nation, said Robert Cohen, executive vice president and head of the Los Angeles office of Robert K. Futterman & Associates, a retail leasing agent and consultant out of New York.

Still mall vacancies are up by 6% to 8%, he said. Even South Coast Plaza is feeling the pinch.

The housing situation hasn't shown signs of letting up, he said, and "people are really freaking out about high gas prices."

Cohen, who in December predicted things might pick up late this year, is forecasting the economic woes to push into next year.

Overall, the retail environment is a mishmash with a few bright spots, he said.

Both ends of the retail food chain are doing well-the discount chains, such as Costco Wholesale Corp. and Wal-Mart Stores Inc., and the high-end luxury retailers.

In the middle, there are some standouts, Cohen said.

H&M Hennes & Mauritz AB of Sweden is one, he said. H&M has a few stores in OC, including South Coast Plaza and the Irvine Spectrum Center. A store just opened in Atlanta and 500 people were waiting in line, he said.

"It's still new enough where there is excitement," he said.

The smaller boutique retailers, such as New York-based Intermix (at South Coast Plaza) and Scoop, and Santa Monica-based Planet Blue are doing well. They do better in a bad economy because they are more relationship driven, he said.

Anchors such as Nordstrom are doing OK, he said, though many retail chains have slowed expansion.

"Many projects have been postponed. Everybody's having a hard time raising money," he said. "Tenants are putting every deal under the microscope. The bottom line is deals are still getting done."