[Federal Register Volume 59, Number 221 (Thursday, November 17, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-28381]


[[Page Unknown]]

[Federal Register: November 17, 1994]


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DEPARTMENT OF TRANSPORTATION
National Highway Traffic Safety Administration
[Docket No. 94-75; Notice 2]

 

Automobili Lamborghini; Grant of Application for Temporary 
Exemption From Federal Motor Vehicle Safety Standard No. 214

    Automobili Lamborghini S.p.A. of Sant'Agata Bolognese, Italy, 
(``Lamborghini'') applied for a temporary exemption from the dynamic 
side impact protection requirements of Federal Motor Vehicle Safety 
Standard No. 214 Side Impact Protection. The basis of the application 
was that compliance would cause substantial economic hardship to a 
company that has tried to comply with the standard in good faith.
    Notice of receipt of the application was published on September 28, 
1994, and an opportunity afforded for comment (59 FR 49462). This 
notice grants the exemption.
    On May 16, 1994, Lamborghini petitioned NHTSA to permit Chrysler 
Corporation to include Lamborghini vehicles in its vehicle fleet for 
the purpose of compliance with Standard No. 214's phase-in calculation 
for enhanced side protection. In the alternative, it petitioned NHTSA 
to grant the company a temporary exemption from the side impact 
standard's new performance requirements until September 1, 1996. On 
August 5, 1994, NHTSA denied Lamborghini's request to be included in 
Chrysler's fleet because Chrysler had sold its interest in Lamborghini 
on January 31, 1994, to a group of investors led by MegaTech Ltd., a 
Bermuda corporation. At the same time, NHTSA informed Lamborghini that 
it would proceed to consider the question of temporary exemption. 
Lamborghini supplemented its application on August 22, 1994.
    Lamborghini has manufactured only 1,475 motor vehicles over the 
past five years, approximately 25% of which have been sold in the 
United States. Denial would therefore mean loss of the important U.S. 
market until compliance could be achieved, an estimated 250 sales of 
670 produced between January 1, 1995 and August 31, 1996. The applicant 
had operating losses in 1993 of approximately $5,000,000, and in 1992 
of approximately $28,000,000. For 1991 it had an operating profit of 
almost $5,000,000.
    While it was owned by Chrysler, Lamborghini vehicles were scheduled 
to be modified during the last year of the phase-in period which ends 
with vehicles produced on August 31, 1996, because of the low number of 
vehicles produced and the lead time necessary for engineering and 
tooling modifications. Chrysler's sale of Lamborghini, therefore, has 
placed the applicant in a difficult position since, before the sale, 
``Lamborghini had a good faith basis for believing that it would not 
need to meet the requirements of Standard 214 until the production year 
beginning September 1, 1996 * * *.'' Lamborghini was left without 
sufficient lead time to comply 100% of its production by either 
September 1, 1994 or September 1, 1995, and, since it produces only a 
single model, cannot avail itself of the phase-in requirement.
    Accordingly, it has begun the preliminary work required to effect 
compliance in production vehicles manufactured beginning July 1996. 
During that time, it estimates that it will spend between $500,000 and 
$900,000 on research, development, and tooling changes.
    Lamborghini argued that an exemption would be in the public 
interest and consistent with the objectives of motor vehicle safety 
because it is ``one of the last small, pioneering and independent 
automobile manufacturers * * * precisely the type of small manufacturer 
that the * * * temporary exemption authority is intended to assist.'' 
Its vehicles ``are used predominantly for shorter pleasure, rather than 
commuting or longer, trips'' so that an exemption ``would have an 
imperceptible impact on motor vehicle safety.'' It points out that the 
livelihoods of its workers in U.S. distributorships and dealerships 
would be affected by a denial.
    No comments were received on the application.
    The agency has reviewed Lamborghini's application. Given the fact 
that 25% of its sales over the past five years have been in the U.S. 
market and that this is likely to be the case in the event an exemption 
is granted, it is manifest that a denial until compliance with Standard 
No. 214 can be effected would cause the applicant substantial economic 
hardship within the meaning of the statute. Indeed, Lamborghini has had 
to suspend production of its cars for the U.S. market since September 
1, 1994, and a present hardship already exists. Because of its previous 
relationship to Chrysler for the purpose of compliance with the phase-
in requirement, it had a good faith basis upon which to delay 
compliance with Standard No. 214 until the end of the phase-in period, 
August 31, 1996. Although the company had net operating losses of 
$5,000,000 in 1993, it is nevertheless prepared to spend an estimated 
$500,000 to $900,000 to achieve compliance by July 1996.
    Furthermore, the estimated 250 cars that would be produced under an 
exemption are not a significant part of the nation's vehicle fleet and, 
as the applicant argues, are generally not used in everyday driving. 
Presumably the company has been meeting, and will continue to meet, the 
requirements of Standard No. 214 which continue in effect until the 
phase-in period ends as of September 1, 1996. In this light, an 
exemption becomes one more of form than of substance. Lamborghini has 
sold vehicles in the United States for the better part of 30 years and 
its, goodwill, dealers and service personnel would be affected by its 
inability to continue business.
    In consideration of the foregoing, it is hereby found that 
compliance would cause substantial economic hardship to a company that 
has tried to comply with the standard in good faith, and that a 
temporary exemption is consistent with the public interest and the 
objectives of motor vehicle safety. Accordingly, Automobili Lamborghini 
is hereby granted NHTSA Exemption No. 94-6, expiring September 1, 1996, 
from 49 CFR 571.214 Motor Vehicle Safety Standard No. 214 Side Impact 
Protection.

(49 U.S.C. 30113; delegation of authority at 49 CFR 1.50)

    Issued on November 9, 1994.
Ricardo Martinez,
Administrator.
[FR Doc. 94-28381 Filed 11-16-94; 8:45 am]
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