Wal-Mart CEO Hints at Selling Hybrids at Stores

By Mike Caggeso
Associate Editor

The parking lots at Wal-Mart Stores Inc. (WMT) retail locations could get much bigger, as the company is in talks with automakers to sell hybrid and plug-in automobiles, H. Lee Scott, the company's chief executive officer, said to store managers and suppliers Wednesday.

"Maybe there isn't room for Wal-Mart in this right now," Scott said, according to Bloomberg. "But something tells me that there may be some role for us in the future." 

Scott didn't mention a time frame or any auto companies by name, but said they were "major companies."

There are a bevy of interesting and semi-interrelated things going on here, but let's start with Wal-Mart's seemingly 180-degree turn into its image of environmental and humanitarian angel.

For example, the company now requires suppliers to meet environmental and ethical standards and has offered to help manufacturers in China comply with laws. It also made favorable changes to its employee health coverage.

"We will favor - and in some cases even pay more - for suppliers that meet our standards and share our commitment to quality and sustainability," Scott said.

That's encouraging to see, but economically speaking, it's easier to say that after the company wrangled a considerable chunk of the U.S. market away from competitors such as K-Mart, Sears, Ames, Fisher's Big Wheel, Montgomery Ward - on top of all the ma-and-pa businesses that folded under Wal-Mart's industry pressure.

Also worth noting is that the Wal-Mart's share price is more than 20% off its 2002 peak. And the company doesn't have much room left to expand in the United States.

A softer image is crucial for the company to break into emerging economies wary of its reputation.

Big Boost to Big Auto

On a less pessimistic note, Wal-Mart selling hybrids and plug-in vehicles would do wonders for the fledging car industry, especially if Wal-Mart - continuing its red-white-and-blue attitude - waits for U.S.-based dealerships to develop some top-notch offerings. 

The sheer amount of foot traffic Wal-Mart gets on a daily basis trumps that of car dealerships. More people casually looking under the hoods of hybrids [with less pressure to buy] will no doubt raise their knowledge of and interest in the next generation of cars. And the presumed lower prices would certainly help, too.

However, if successful, that could also squeeze a few non-competitive car dealerships out of the equation.

No matter what happens, the Public Relations staff at Wal-Mart will never run out of work.

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