[Federal Register Volume 64, Number 47 (Thursday, March 11, 1999)]
[Rules and Regulations]
[Pages 12090-12092]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-6052]
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DEPARTMENT OF TRANSPORTATION
National Highway Traffic Safety Administration
49 CFR Part 531
[Docket No. NHTSA-97-3205, Notice 02]
Passenger Automobile Average Fuel Economy Standards
AGENCY: National Highway Traffic Safety Administration (NHTSA),
Department of Transportation.
ACTION: Final decision.
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SUMMARY: This final decision responds to a joint petition filed by
Vector Aeromotive Corporation (Vector) and Lamborghini S.p.A.
(Lamborghini) requesting that each company be exempted from the
generally applicable average fuel economy standard of 27.5 miles per
gallon (mpg) for model years (MYs) 1998 and 1999 and that lower
alternative standards be established. In this document, NHTSA denies
Lamborghini's request for MYs 1998 and 1999 and grants Vector's request
only for MY 1998. The agency establishes an alternative standard of
12.1 mpg for MY 1998 for Vector.
DATES: Effective Date: This final decision is effective April 12, 1999.
This denial applies only to Lamborghini for MYs 1998 and 1999.
Petitions for reconsideration: Petitions for reconsideration must
be received no later than April 12, 1999.
ADDRESSES: Petitions for reconsideration of this rule should refer to
the docket and notice number set forth above and be submitted to:
Administrator, National Highway Traffic Safety Administration, 400
Seventh Street, SW, Washington, D.C. 20590.
FOR FURTHER INFORMATION CONTACT: The following persons at the National
Highway Traffic Safety Administration, 400 Seventh Street, SW,
Washington, D.C. 20590.
For non-legal issues: Ms. Henrietta L. Spinner, Office of Planning
and Consumer Programs, Safety Performance Standards, NPS-32, NHTSA, 400
Seventh Street, SW., Washington, D.C. 20590. Telephone: (202) 366-4802,
facsimile (202) 366-2739.
For legal issues: Otto Matheke, Office of the Chief Counsel, NCC-
20, telephone (202) 366-5253, facsimile (202) 366-3820.
SUPPLEMENTARY INFORMATION:
Statutory Background
Pursuant to section 32902(d) of Chapter 329 ``Automobile Fuel
Economy'' (49 U.S.C. 32902(d)), NHTSA may exempt a low volume
manufacturer of passenger automobiles from the generally applicable
average fuel economy standards if NHTSA concludes that those standards
are more stringent than the maximum feasible average fuel economy for
that manufacturer and if NHTSA establishes an alternative standard at
that maximum feasible level. Under the statute, a low volume
manufacturer is one that manufactured (worldwide) fewer than 10,000
passenger automobiles in the second model year before the model year
for which the exemption is sought (the affected model year) and that
will manufacture fewer than 10,000 passenger automobiles in the
affected model year. In determining the maximum feasible average fuel
economy, the agency is required under 49 U.S.C. 32902(f) to consider:
(1) Technological feasibility
(2) Economic practicability
(3) The effect of other Federal motor vehicle standards on fuel
economy, and
(4) The need of the United States to conserve energy.
The statute permits NHTSA to establish alternative average fuel
economy standards applicable to exempt low volume manufacturers in one
of three ways: (1) a separate standard for each exempted manufacturer;
(2) a separate average fuel economy standard applicable to each class
of exempted automobiles (classes would be based on design, size, price,
or other factors); or (3) a single standard for all exempted
manufacturers.
Proposed Decision and Public Comment
This final decision was preceded by a proposal announcing the
agency's tentative conclusion that Vector and Lamborghini should be
exempted from the generally applicable MYs 1998 and 1999 passenger
automobile average fuel economy standard of 27.5 mpg, and that
alternative standards of 12.4 mpg for MYs 1998 and 1999 be established
for Vector and Lamborghini (63 FR 5774; February 4, 1998). The agency
did not receive any comments in response to the proposal.
NHTSA Final Determination
On August 27, 1997, Lamborghini and Vector filed a joint petition
seeking an exemption from the generally applicable fuel economy
standards for passenger cars for MYs 1998 and 1999 and requested that
an alternative fuel economy standard for the two companies be
established. At the time this petition was filed, V-Power Corporation
controlled Lamborghini and Vector. V-Power was, and remains, the
largest shareholder of Vector, owning 57 percent of the stock; with the
remaining 43 percent of Vector being publicly held. V-Power also had a
controlling interest in Lamborghini owning 50 percent of Lamborghini's
stock. As V-Power controlled both companies, any alternative Corporate
Average Fuel Economy (CAFE) standard would apply to Lamborghini and
Vector together (see 49 U.S.C. 32901(a) (4)), and a single
[[Page 12091]]
petition was submitted for a single alternative standard, applicable to
the combined fleet of the two manufacturers.
On July 24, 1998, Audi AG (Audi), a wholly owned subsidiary of
Volkswagen AG, acquired full ownership of Lamborghini. Together, Audi
and Volkswagen have an annual worldwide production of more than 10,000
vehicles. Section 32902(d) of Chapter 329 provides that an alternative
standard may only be established for a manufacturer that manufactured
(whether in the United States or not) fewer than 10,000 passenger
automobiles in the model year two years before the model year for which
the application is made. The section further provides that an exemption
for a model year applies only if the manufacturer manufactures (whether
in the United States or not) fewer than 10,000 passenger automobiles in
the model year.
On September 21, 1990, the agency published a notice (55 FR 38822)
containing NHTSA's interpretation of the terms manufacture and
manufacturer for the purposes of determining eligibility for a low
volume exemption under section 32902(d). In considering whether an
entity is eligible for a low volume exemption, the agency indicated
that it must count all of the cars manufactured by that entity
worldwide, and not merely those imported in the United States.
Importers who are controlled by larger ``parent'' manufacturers have,
by virtue of the relationship with the ``parent,'' access to
technological and material resources that provide them with the ability
to manufacture more fuel efficient vehicles. The fact that the
``parent'' may choose not to import and market cars in the United
States does not have any bearing on the availability of these
resources.
When Lamborghini and Vector filed their joint petition seeking an
exemption in 1997, the annual worldwide production of both companies
combined was fewer than 10,000 vehicles. However, Lamborghini was
acquired by Audi, which is in turn owned and controlled by Volkswagen,
during Lamborghini's 1998 model year. The combined worldwide production
of Volkswagen, Audi, and Lamborghini during Lamborghini's 1998 model
year was much greater than 10,000 vehicles. As section 32902(d)(1)
prohibits establishing alternative fuel economy standards for
manufacturers producing more than 10,000 vehicles during the model year
for which the exemption is sought, Lamborghini, by virtue of its coming
under the ownership of Audi and Volkswagen, is ineligible for an
exemption for the 1998 model year. Similarly, as Lamborghini and its
parents, Audi and Volkswagen, will manufacture more than 10,000
vehicles annually in the 1999 model year, the agency is denying
Lamborghini's request for an exemption for MY 1999 as well.
The agency notes that Vector, which submitted a joint petition for
exemption with Lamborghini, remains under the ownership of V-Power.
Vector and its parent company produce fewer than 10,000 vehicles
worldwide each year. The company is, therefore, still eligible for an
exemption from the generally applicable fuel economy standards. Vector
has requested that the agency consider the joint petition filed on
behalf of itself and Lamborghini to be a single petition seeking an
alternative standard for Vector alone. To assist the agency in
considering its decision to set such an alternative standard, Vector
provided NHTSA with information regarding its maximum feasible fuel
economy for the 1998 model year. NHTSA has determined Vector's maximum
feasible fuel economy for that year and establishes an alternative
standard of 12.1 mpg for MY 1998, based on Vector's request. When
Vector furnishes the agency with additional MY 1999 data and
information to support its request for an alternative standard for that
year, NHTSA will address its petition in a separate decision. In prior
model years, Vector exclusively relied on the Lamborghini engine in its
passenger cars. Volkswagen's acquisition of Lamborghini leaves Vector
technically uncertain regarding the supplier of engines for its 1999
models. Therefore, at this time, the agency cannot determine Vector's
maximum feasible fuel economy for MY 1999.
Regulatory Impact Analyses
NHTSA has analyzed this decision and determined that neither
Executive Order 12866 nor the Department of Transportation's regulatory
policies and procedures apply. Under Executive Order 12866, the
decision would not establish a ``rule,'' which is defined in the
Executive Order as ``an agency statement of general applicability and
future effect.'' The decision is not generally applicable, since it
applies to Automobili Lamborghini S.p.A. and its parent companies and
Vector Aeromotive Corporation, as discussed in this notice. Under DOT
regulatory policies and procedures, the decision is not a ``significant
regulation.'' If the Executive Order and the Departmental policies and
procedures were applicable, the agency would have determined that this
decision is neither major nor significant. The principal impact of this
decision is that the companies seeking an exemption could be required
to pay civil penalties if the average fuel economy of the Volkswagen/
Audi/Lamborghini's and Vector's fleets are less than the generally
applicable standard. In that event, purchasers of those vehicles may
have to bear the burden of those civil penalties in the form of higher
prices. Since this rule sets an alternative standard at the level
determined to be the maximum feasible level for Vector for MY 1998, no
fuel would be saved by establishing a higher alternative standard.
NHTSA finds in the Section on ``The Need of the United States to
Conserve Energy'' that because of the small size of Vector's fleet, the
incremental usage of gasoline by Vector's customers would not affect
the nation's need to conserve gasoline. There would not be any impacts
to the public at large.
The agency has also considered the environmental implications of
this decision in accordance with the Environmental Policy Act and
determined that it does not significantly affect the human environment.
Regardless of the fuel economy of the affected vehicles, they must pass
the emissions standards which measure the amount of emissions per mile
traveled. Thus, the quality of the air is not affected by the denial of
Lamborghini's request and the exemption of Vector's request for
alternative standards. Further, since the passenger automobiles at
issue will be required to meet applicable passenger car fuel economy
standards, the decision does not affect the amount of fuel used.
Since the Regulatory Flexibility Act may apply to both decisions
denying an exemption to a manufacturer and exempting a manufacturer
from a generally applicable standard, I certify that this decision will
not have a significant economic impact on a substantial number of small
entities. While the denial of the exemption imposes a burden on
Lamborghini, the company and its parent companies are not small
businesses. The prices of 1998 and 1999 Lamborghini automobiles are not
likely to be affected by this decision as the Lamborghini vehicles are
sold in very small numbers and will be included in the fleet of its
parent company. The relatively low fuel economy of the small number of
Lamborghini vehicles will be outweighed by the comparatively high fuel
economy of the large numbers of Volkswagen and Audi vehicles.
[[Page 12092]]
Purchasers will therefore not be affected. This decision does not
impose any burdens on Vector. It does relieve the company from being
subject to an infeasible standard for MY 1998 and from having to pay
civil penalties for noncompliance with that standard. Since the price
of 1998 Vector automobiles were not affected by this decision, the
purchasers are not affected.
List of Subjects in 49 CFR Part 531
Energy conservation, Fuel economy, Imports, Motor vehicles.
In consideration of the foregoing, 49 CFR Part 531 is amended as
set forth below:
PART 531--[AMENDED]
1. The authority citation for Part 531 continues to read as
follows:
Authority: 49 U.S.C. 32902, Delegation of authority at 49 CFR
1.50.
2. Section 531.5(b) is amended by republishing paragraph (b)
introductory text and adding paragraph (b)(13) to read as follows:
Sec. 531.5 Fuel economy standards.
* * * * *
(b) The following manufacturers shall comply with the standards
indicated below for the specified model years:
* * * * *
(13) Vector Aeromotive Corporation.
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Average fuel
economy
Model year standard
(miles per
gallon)
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1998.................................................... 12.1
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* * * * *
Issued on: March 5, 1999.
L. Robert Shelton,
Associate Administrator for Safety Performance Standards.
[FR Doc. 99-6052 Filed 3-10-99; 8:45 am]
BILLING CODE 4910-59-P
