Market Snapshot

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DEMAND FOR AUTOS REBOUNDS

After falling for two months in a row, consumer demand for new automobiles rebounded 3% in May, with 17% of all U.S. households saying that they are very (8%) or somewhat (9%) likely to purchase or lease a new automobile within the next six months (versus 14% who were likely to purchase or lease a new automobile in April), according to TechnoMetrica Market Intelligence.

WHY GASOLINE PRICES WILL STAY HIGH

Gas prices are averaging $3.20 across the United States, and the cost for a gallon of gasoline is likely to remain high. Lynn Westfall, chief economist for Tesoro, recently told BusinessWeek that consumers have already spent $20 billion more on gasoline this year than last—a considerable dent in their disposable incomes.

J.D. POWER SAYS THESE VEHICLES HAVE “HIGHEST INITIAL QUALITY”

The Initial Quality Study (IQS) released by J.D Power and Associates each year measures vehicle quality at 90 days of ownership. Problems experienced by vehicle owners are separated into two categories: quality of design and quality of production (defects and malfunctions).

“Over the past 20 years, the automotive industry has improved in quality at a rate of 6% per year on average—a 20-year improvement rate of more than 120%,” the report states, adding that every seven to eight years, problem counts have been reduced by 50%.

TOP 10 VALUE-RETAINING VEHICLES

SEMA research has shown that 83% of new-vehicle buyers agree that their vehicles should represent good investments. Consumers want their vehicles to retain value and may make their future purchase decisions partly based on this factor. With this in mind, CarGurus (www.cargurus.com), an automotive community offering consumers pricing information on new vehicles, assembled its list of the 10 best and 10 worst vehicles in terms of retention value.

NEW STUDY TOUTS BENEFITS OF PROPANE-FUELED VEHICLES

A recent study by the Propane Education & Research Council (PERC) found that if a select 10% of the U.S. commercial fleet vehicle population switched to propane, the country could displace nearly 1 billion gallons of gasoline annually by 2017.

CONVERTIBLE SUVS ARE BACK!

As summer approaches, consumers are buying vehicles that reflect their outdoor-loving lifestyles, and the purchase of convertible SUVs is growing in popularity among many of these drivers. SEMA-member Newport Convertible Engineering, a Placentia, California-based custom shop, has been taking the tops off of new FJ Cruisers and Hummer H3s for its customers for some time now, which the company says is a growing trend.

INTERIOR LIGHTING NEW PERSONALIZATION TREND?

New-vehicle buyers are increasingly demanding customized vehicle interiors that make their vehicles feel uniquely theirs, according to a recent WardsAuto.com article. The trend spans newly licensed “Echo Boomers” to well-experienced baby boomers. However, the latter is more concerned with comfort while the former want different interior colors for their personalization needs, commented Erich Merkle, IRN Inc. director of forecasting, in the WardsAuto.com article.

VEHICLE INTERIORS NOW KINDER TO THE ENVIRONMENT

Automakers are increasing their use of “environmental-friendly” materials in vehicle interiors, according to a recent WardsAuto.com article. The article notes that one of the hottest “eco-friendly” interior materials is soybeans, which in the form of soybean oil can be used in place of petroleum polyols to create foam for headrests, armrests and seat cushions.

CONSUMERS MAY GIVE UP PERFORMANCE FOR FUEL ECONOMY, SAYS CONSUMER REPORTS

According to a recent Consumer Reports poll, facing soaring gasoline prices, American car buyers definitely want more fuel-efficient vehicles but may not be ready to give up size, range, performance or other amenities to achieve that goal.

WHAT SEMA MEMBERS SAY ARE TOP SELLERS

The following is a short excerpt from the "2007 Trends and Forecasts Quarterly Update-Q1."

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