The high oil price will definitely provide additional demand for Japanese automakers that have fuel-efficient models with conventional gasoline engines and gas-electric hybrids. It's definitely a winning edge.

Honda has the right models with the right timing in its most profitable market. Its redesigned Civic is doing well in the U.S. and it just released the Fit compact car.

Toyota has been the leader of the pack in environmental technology, and they will probably continue to be. Many of its rivals were at first not so aggressive in hybrids, but now we see everyone joining.

It makes sense for Nissan to make use of Renault's production base to sell vehicles in emerging markets where the automaker is looking to expand sales.

Mazda, like other automakers, is benefiting from the weaker yen. Currently they don't have many new models, but next fiscal year starting in April, they will release new SUV models in the U.S., which should help its earnings and sales.

The home market is essential for the Japanese automakers to do well as it helps them generate the resources they need to expand overseas.

We expect the new models to do well in the U.S. in 2006, which will lead to a lack of production capacity.

This is a taste of what future models will look like.