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%.

Since J.D. Power ratings are based on consumer feedback, quality ratings reflect personal experience of consumers, which other new-vehicle buyers take into consideration when buying their next vehicle. Nearly one in four new-vehicle buyers have said that personal experience and advice from others who have owned the considered vehicles influences buying decisions.

In fact, recent AutoPacific new-vehicle buyer data shows that vehicle quality, dependability and reliability were the most important characteristics that swayed new-vehicle purchases. With this in mind, vehicle ratings, such as those released by J.D. Power, could indicate what consumers will drive in the future.
 
This year, Ford Motor Company received five top-model segment awards, more than any other automaker. In fact, 14 Ford Motor Company models placed in the top three of their respective segments. Ford’s Lincoln nameplate received two segment awards and improved from a ranking of 12th in 2006 to 3rd this year.

According to J.D. Power, “vehicle redesigns and product launches create quality challenges for manufacturers as they continue to develop and introduce new and advanced automotive technologies. On average, a vehicle redesign increases problem counts by 10 problems per 100 (PP100) vehicles.” This year’s study is based on responses from more than 97,000 purchasers and lessees of new 2007 model-year cars and trucks.
 
The following are some of the highlights of the 2007 IQS:

• Mercedes-Benz captured three segment awards. The E-Class, SL-Class and S-Class received honors. The S-Class tied with the Audi A8 for having the fewest quality problems in the industry, with 72 problems per 100 vehicles—an improvement of 63 PP100 for the S-Class. Mercedes-Benz improved its nameplate rank by 20 positions, the greatest increase for any nameplate in the study.
• Toyota also received awards for three segments with the 4Runner, Sequoia and Tacoma.
• Porsche tops the overall nameplate rankings for the second year in a row with 91 PP100.
• Honda has the fewest problems per 100 among non-premium brands and improved in the rankings from 6th to 4th. The automaker earned awards for the Civic and CR-V.
• Kia improved from 24th to 12th in the rankings, earning an award for the Rio/Rio5.
• Other nameplates recognized for quality were the Chevrolet Express and Silverado Classic HD; Lexus RX350/RX400h; Pontiac Grand Prix; and Porsche Boxster.
• The most improved nameplates are Land Rover, Saab and Mercedes-Benz.

Awards were also given for assembly plant quality. The study reveals that for the first time since 1999, a North American assembly plant, Ford’s Wixom assembly plant in Michigan, received the Platinum Plant Quality Award for producing vehicles yielding the fewest defects. The following are highlights for the Assembly Plant Awards:

Image Courtesy J.D. Power and Associates 2007 Initial Quality Study

Source: “J.D. Power and Associates Reports: Ford Motor Company Captures Most Awards in 2007 Initial Quality Study,” J.D. Power and Associates. Retrieved June 7, 2007 from www.jdpower.com.

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.

They make convertibles out of luxury and non-luxury and SUVs for one reason: “There is a tremendous growing demand for SUV convertibles much like when we introduced our sedan convertible at the time,” comments Matthew Kahnamelli of Newport Convertible Engineering.

Some of the sedans for which the company transforms into convertible include the Dodge Charger, Chrysler 300 and Cadillac CTS. But Kahnamelli notes that although his company has been making convertibles out of Ford Expedition and Range Rovers SUVs over the past few years, since the introduction of the FJ and H3, “the convertible market for these vehicles has gone through the roof,” he says. The company proudly displayed one of its FJ Cruiser convertibles at the 2006 SEMA Show, as shown in the picture below.

The H3 shown above also shows how Newport Convertible Engineering is making its customers the unique custom SUVs they want in order to differentiate themselves from others on the road. Kahnamelli indicates that typical customers for convertible SUVs are affluent individuals, from doctors to businesswomen, who want the functionality of an SUV with the fun of a convertible.

The convertible tops on these SUVs are hydraulically actuated with the latch closed by hand at the windshield header. Structural rigidity is maintained with some enhancements that increase the stiffness of the SUVs. Because Newport Convertible Engineering incorporates welded-in reinforcement around the window frames and behind the back seats, as well as roll hoops welded into all the right places, every vehicle sold comes with its original warranty intact, as well as an additional three-year warranty on the convertible top.

The dealer cost for a conversion is about $10,000 for the FJ Cruiser and $19,000 for the Hummer H3, and the company says that consumers are continuing to pay this in order to get a topless SUV that is unlike most others on the road.

Source: SEMA Research & Information Center

Filler for eNews

The road to success at the 2007 SEMA Show can be a rocky one, but you can make it a smooth trip with 10 essential steps. Tradeshow expert Chuck Schwartz shares the fundamentals of budgeting, developing a game plan and creating a winning team for the Show, Thursday, June 7, 2007 at 10 a.m. (PST). Learn the most important steps to creating an effective and efficient tradeshow exhibit, produce more foot traffic and generate more leads.

His 60-minute "10 Steps to Your SEMA Show Plan That Will Guarantee ROI and Success" webinar will not only provide you with an inside edge, but also guarantee your return on investment and overall success.

Tune in for expert tips on:

• Effective exhibit design and production
• Saving $$$ on Show services
• Avoiding common problems, such as lost/damaged freight, illness or injuries, intellectual property rights and other onsite conflicts

Employees of SEMA-member companies and SEMA Show exhibitors can participate for free from anywhere with Internet access.

How to Participate

During the webinar on Thursday, June 7, you will be able to interact and ask questions through the computer or over the phone. Simply follow these steps on Thursday, June 7, at 10 a.m. (Pacific Time).

• Download the PowerPoint presentation as a PDF file by clicking here.
• View the presentation during the webinar by clicking here the day of the webinar.
• Connect to the audio portion of the webinar by calling toll-free 866/637-2754, pin 1542.

With several months still remaining, the 2007 SEMA Show is expected to feature more than 2,000 exhibitors
 
A record number of manufacturers took part in the Priority Space Selection process for the 2007 SEMA Show. With several months still remaining before the event takes place October 30–November 2, 2007, in Las Vegas, Nevada, the event is expected to feature more than 2,000 automotive specialty-equipment manufacturers.

"Never before have so many companies come to us so early in the year and committed to participating in the SEMA Show," said Peter MacGillivray, SEMA vice president of marketing and communications. "These exhibitors will be bringing with them thousands and thousands of new products—all of which will debut at the SEMA Show in Las Vegas."

A total of 1,835 companies participated in this year's priority space-selection process, which began in April and concluded in May; that number is about 100 more than it had been in previous years. Limited space is still available for the Show, and new manufacturers are continuing to sign up to participate in what is considered to be the premier automotive parts and accessories show in the world. Based on current numbers and past history, organizers expect that the 2007 SEMA Show will ultimately feature more than 2,000 exhibiting companies.

"We're excited to see what the exhibitors will be bringing to this year's SEMA Show," said MacGillivray. "Every year, thousands of amazing new products debut and the hottest trends are revealed during the SEMA Show. With more than 2,000 companies taking part in this year's event, we're expecting nothing less."

A major benefit to having so many exhibitors take part in the Show, MacGillivray explained, is that attendees can meet and talk with key players from the exhibiting companies all within the week. "This is the single best place to talk directly to the source," MacGillivray said. "Many exhibitors even conduct product demonstrations and technical seminars to give attendees greater product knowledge. These activities are free to attendees, but the take-away is priceless."

A complete list of SEMA Show exhibitors and a floor plan can be found online at www.SEMAshow.com. The website also includes updates and information about the event, as well as an online registration form. Industry professionals who attended the 2005 or 2006 SEMA Show are encouraged to register using their personalized alumni number, which will save them time and allow them to register without having to resubmit proof of trade status. Alumni numbers were sent to all past attendees or can be obtained by contacting customer service at registration@aaiwshow.com or calling toll-free at 866/229-3687 or 301/694-5243.

The SEMA Show attracts more than 100,000 industry leaders from 100 countries each year. In addition to thousands of manufacturers, the event features professional development and technical seminars, product demonstrations, special activities and networking events.

Twenty-five volunteers from the industry will be vying for 16 open seats on the SEMA Board of Directors, as they seek to lead the automotive specialty-equipment market in the 2007–2009 SEMA Board of Directors elections taking place next month. With the voting of the chairman-elect position taking place this year, the 2007 elections will be pivotal.

Current Chairman-Elect Jim Cozzie of Zoom Performance Products recently challenged the nearly 7,000 SEMA members to cast their votes in the upcoming elections. "You all get to choose who will represent you in confronting the challenges ahead," Cozzie said during the SEMA State of the Association. "It is incumbent on each and every SEMA member to ensure the best people the industry has to offer have the opportunity to serve."

For more information about each candidate, click here.

SEMA has hired Will L. Woods, CAE, to the newly created position of vice president of councils. Woods brings with him more than 25 years of professional experience, including 13 years as executive director of a 2,400-member trade association and seven years with a California-based automotive trade association.

As SEMA’s first vice president fully dedicated to the council department, Woods will oversee and manage the association’s eight councils.

“We are fortunate to have an individual as experienced and talented as Will join SEMA,” said SEMA President and CEO Chris Kersting, CAE. “I’m confident that Will’s knowledge and expertise will be instrumental in helping our councils in achieving their goals and bringing value to the members.”

SEMA councils are groups of SEMA members that share common interests. They typically represent niches or segments within the automotive specialty-equipment market and include between 100 and 600 companies. Both the number of SEMA member companies and the number of councils have grown tremendously during the last 10 years, resulting in the need for a designated SEMA vice president of councils.

“Over the years, SEMA councils have proven to be valuable and effective at addressing niche-specific issues and concerns,” said Kersting. “From legislative issues to marketing and networking activities, the councils are at the forefront of what matters most. With Will on staff, we will be able to accomplish more than ever before.”

Woods, who began his post with SEMA on Wednesday, May 30, 2007, will work closely with volunteers and leaders from each SEMA council. Upcoming activities include the SEMA Council Summit, which is held in conjunction with the SEMA Installation Banquet & Gala Fundraiser, as well as the SEMA Internet Symposium, MRC Rep Conference and the MPMC Media Trade Conference.

“SEMA councils are active and dynamic groups,” said Woods. “In fact, although the councils are a subgroup of a larger association (SEMA), many of SEMA’s councils are more productive than some associations that exist. It is going to be exciting and a great pleasure to work with such motivated entities.”

Woods reports directly to SEMA President and CEO Chris Kersting. Woods can be reached at willw@sema.org, 909/396-0289, ext. 210.

Vehicle technology is advancing at an unprecedented rate and helping SEMA members understand and leverage emerging vehicle technologies is one of the association's top priorities, according to John Waraniak, SEMA vice president, vehicle technology.

Automotive technology and innovation will continually evolve, but technology must be adopted and embraced by consumers to make a difference. One hundred years ago, for example, there were three competing powertrain technologies: steam, electricity and gasoline. Gasoline-powered engines and mechanical systems emerged as the dominant technologies, but with today's rapid advances in electronics, materials and controls, we have several more competing alternative powertrain technologies, including hydrogen fuel cells, biomass diesels and hybrid combinations of electricity and gasoline.

The key point, which many SEMA member companies know well, is that product innovation does not come from the discovery of technology, but from being the first to use these vehicle technologies to create new and exciting market opportunities, as well as to solve problems and meet consumer and enthusiast demands.

To this end, SEMA will be introducing a new program called Technology Briefing Seminars (TBS) and Tech Talks 2.0. The TBS program will provide an effective platform for integrating SEMA's vehicle technology initiatives and our collaborative efforts with SAE, CAR, CEA and MERA, as well as many of the value-added elements of the original Tech Talks program.

The TBS series of seminars will focus on new and emerging vehicle technologies relevant to SEMA-member company products. The seminars will be one- to two-day events centered on specific technologies impacting the fusion of performance and safety. The NHTSA for example is accelerating the adoption of active safety systems and technologies such as electronic stability control (ESC).

And while many drivers and enthusiasts are split on crash-avoidance technologies where computers take over control of their vehicles, history has shown that new vehicle technologies have not been the demise of the specialty-equipment market, but rather a catalyst for growth and innovative product solutions for many of our member companies.

Systems engineers, product planners and technical experts from the aftermarket specialty equipment industry, as well as OEM and Tier One communities, will participate in these seminars. SEMA will hold these seminars in the Detroit and Los Angeles areas in an effort to have as broad an outreach as possible.

The first TBS is scheduled for September 6–7, in Diamond Bar, California, and will address ESC systems. Waraniak and Ed Browalski, SEMA's ESC advisor, are developing the TBS content and will announce details of the seminar in early July.

TBS and Tech Talks 2.0 will be described in further detail in the August issue of SEMA News and will include four intense, accelerated presentations at the SEMA Show—ESC, TPMS, Mobile Electronics Integration and Performance Diesel—designed to increase awareness of our TBS Series and Tech Talks 2.0 Program.

Editor's Note: Last week we reported that the NHRA was under new management. To clarify, the NHRA will remain a non-profit 501(c)(6) corporation, will retain all its non-professional racing, safety and educational activities and continue to be the sanctioning body for all NHRA racing activities, including the NHRA POWERade Drag Racing Series.

HD Partners will acquire all of NHRA's professional racing assets, including the NHRA POWERade Drag Racing series, together with a broad set of rights to commercialize the NHRA brand. The NHRA, which will remain a non-profit 501(c)(6) corporation, will retain all its non-professional racing, safety and educational activities and continue to be the sanctioning body for all NHRA racing activities, including the NHRA POWERade Drag Racing Series.

Further, the management team at NHRA will remain intact.

The complete press release on the transaction is featured below:

5/30/2007

Source: HD Partners Acquisition Corporation

NHRA ASSETS SOLD

HD Partners Acquisition Corporation Announces Proposed Acquisition of NHRA Pro Racing From the National Hot Rod Association

SANTA MONICA, CA--(MARKET WIRE)--May 30, 2007 -- HD Partners Acquisition Corporation ("HD Partners") (AMEX:HDP - News) (HDPU - News) (HDPWT - News) and the National Hot Rod Association ("NHRA"), the world's preeminent drag racing organization, today announced the signing of a definitive agreement under which HD Partners will acquire all of NHRA's professional racing assets, including the NHRA POWERade Drag Racing series, together with a broad set of rights to commercialize the NHRA brand. Upon consummation of the transaction, the acquired assets will be held in a wholly owned subsidiary of HD Partners named NHRA Pro Racing. The NHRA, which will remain a non-profit 501(c)(6) corporation, will retain all its non-professional racing, safety and educational activities and continue to be the sanctioning body for all NHRA racing activities, including the NHRA POWERade Drag Racing Series.

Eddy Hartenstein, Chairman and Chief Executive Officer of HD Partners, said, "We are extremely excited by this truly unique sports media and entertainment opportunity, which provides an ideal platform for our management team to leverage their skills and expertise in creating and marketing compelling entertainment experiences and building strong brands. NHRA President Tom Compton and his team have done a remarkable job positioning the NHRA POWERade Drag Racing series as one of the country's top motorsports events. We see tremendous opportunities in working closely with Tom, who will become President and CEO of NHRA Drag Racing, to take the sport of drag racing and the overall NHRA experience to the next level."

Wally Parks, Founder of the NHRA, said, "Today's announcement represents a monumental milestone in the 56-year history of the NHRA. By virtue of the agreements we have reached with HD Partners, we are positioning the NHRA POWERade Series for great future growth and success, while at the same time are assuring the long term vitality of the NHRA."
Upon closing of the transaction, Eddy Hartenstein will serve as Chairman of NHRA Pro Racing, and Tom Compton will assume the role of President and CEO and be a member of the Board. Robert Meyers, HD Partners' current Chief Financial Officer, will become the Chief Financial Officer of NHRA Pro Racing. Peter Clifford, currently Executive Vice President and General Manager of the NHRA, will become executive director of the NHRA, as well as a consultant to NHRA Pro Racing.

Dallas Gardner, Chairman of the Board of NHRA, said, "This transaction provides the best opportunity for NHRA to fulfill its core mandate to protect, preserve and promote the sport of drag racing. It provides long-term financial stability to the NHRA, an unhindered opportunity for the NHRA POWERade Drag Racing Series to flourish and grow, and an important strategic and long-term relationship between the NHRA and NHRA Pro Racing."

Tom Compton, president of the NHRA, said, "While we have made tremendous strides over the last eight years growing the professional side of the sport, today's announcement is the next logical step in the evolution of the sport of drag racing. This new relationship brings with it access to investment capital, additional expertise, relationships and complimentary skill sets to assist the current management team to drive key initiatives to accelerate the growth of the NHRA POWERade Drag Racing Series."

Under the terms of the agreement announced today, HD Partners will acquire:

• The NHRA POWERade Drag Racing Series and all professional NHRA drag racing assets and opportunities, including NHRA's existing television broadcast agreement with ESPN;
• An exclusive, worldwide, perpetual license to the NHRA brand for professional drag racing activities;
• Broad and extensive rights to commercialize the NHRA brand, including:
        -  Exclusive professional racing and "Official NHRA" sponsorship
           and licensing rights;
        -  Exclusive media exploitation rights in broadcast television, home
           entertainment and new media;
        -  Exclusive merchandising rights relating to both professional
           racing and the stand-alone NHRA brand;
• Four NHRA-owned race tracks, an additional long-term track lease in Pomona, California and the NHRA headquarters building in Glendora, California; and
• A video and photo archive chronicling the history of drag racing, which includes more than 20,000 hours of video and film.

The NHRA POWERade Drag Racing Series currently consists of 23 national events held at locations across the country. These multi-day events, which can draw as many as 125,000 spectators over three or more days, provide fans, racers and sponsors a unique ability to interact with each other through access to the racer pit area. In addition, NHRA's Nitro Alley display and interactive area located at each national event provides fans with a race-related entertainment experience, including the ability to get behind the wheel themselves in motorcycle and funny car simulators. All 23 national events are aired exclusively on ESPN2.

The NHRA will receive approximately $121 million in total consideration, consisting of approximately $100 million in cash, approximately $9.5 million in HD Partners common stock and the assumption by HD Partners of approximately $11.5 million in debt and liabilities. In addition to retaining its non-professional racing activities and sanctioning role, the NHRA will continue to offer its membership program and publish its weekly publication National Dragster. The closing of the asset purchase and related transactions is subject to stockholder approval, regulatory clearances and other customary closing conditions.

HD Partners will file a Current Report on Form 8-K with the Securities and Exchange Commission, which more fully describes the transaction.
In connection with the proposed acquisition, Morgan Joseph & Co. Inc. served as financial advisor to HD Partners and Latham and Watkins LLC were HD Partners' legal advisors. Duff & Phelps, LLC provided a fairness opinion to the HD Partners board of directors.

A nationally recognized investment banking firm provided a fairness opinion to the NHRA board of directors in connection with the transaction and Morrison and Foerster were the NHRA's legal advisors. 

SEMA and Nissan North America have set a measuring session for Tuesday–Wednesday, June 19–20. The session will feature four 2008 Nissan vehicles—the Versa five-door hatchback, the Sentra and Sentra SE-R sedans and the all-new Altima Coupe.

Each company will get 60 minutes with the vehicles, and cameras are permitted. To participate, members must register by Friday, June 15.

Measuring sessions provide manufacturers the opportunity to get hands-on with production vehicles that have yet to hit the street. Many participating manufacturers use measuring sessions to attain vehicle measurements and ready products in time for the vehicles’ public releases. 

To register, e-mail your name(s), company name, address, phone number to measuringsession@sema.org. Questions? Contact Bill Wolf (billw@sema.org)  or Sandy Conolly (sandyc@sema.org) at 909/396-0289, ext. 177 or ext. 155, respectively.