[Federal Register Volume 61, Number 146 (Monday, July 29, 1996)]
[Proposed Rules]
[Pages 39429-39432]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-19070]
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DEPARTMENT OF TRANSPORTATION
National Highway Traffic Safety Administration
49 CFR Part 531
[Docket No. 96-067; Notice 1]
Passenger Automobile Average Fuel Economy Standards; Proposed
Decision to Grant Exemption
AGENCY: National Highway Traffic Safety Administration (NHTSA), DOT.
ACTION: Proposed decision.
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SUMMARY: This proposed decision responds to a joint petition filed by
Lamborghini and Vector requesting that each company be exempted from
the generally applicable average fuel economy standard of 27.5 miles
per gallon (mpg) for model years 1995 through 1997, and that lower
alternative standards be established. In this document, NHTSA proposes
that the requested exemption be granted and that alternative standards
of 12.8 mpg be established for MY 1995, 12.6 mpg for MY 1996, and 12.5
mpg for MY 1997, for Lamborghini and Vector.
DATES: Comments on this proposed decision must be received on or before
September 27, 1996.
ADDRESSES: Comments on this proposal must refer to the docket number
and notice number in the heading of this notice and be submitted,
preferably in ten copies, to: Docket Section, Room 5109, National
Highway Traffic Safety Administration, 400 Seventh Street, SW.,
Washington, DC 20590. Docket hours are 9:30 a.m. to 4 p.m., Monday
through Friday.
FOR FURTHER INFORMATION CONTACT: Ms. Henrietta Spinner, Office of
Market Incentives, NHTSA, 400 Seventh Street, SW., Washington, DC
20590. Ms. Spinner's telephone number is: (202) 366-4802.
SUPPLEMENTARY INFORMATION:
Statutory Background
Pursuant to 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 for
that manufacturer at its 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 Nation to conserve energy.
The statute at 49 U.S.C. 32902(d)(2) permits NHTSA to establish
alternative average fuel economy standards applicable to exempted 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.
Background Information on Lamborghini and Vector
Vector Aeromotive Corporation (Vector) and Automobili Lamborghini
S.p.A. (Lamborghini) are small automobile manufacturers that each
produce a single model of high priced, uniquely designed exotic sport
vehicles. Lamborghini is an Italian manufacturer of passenger cars,
which concentrates exclusively on the production of high quality, high
performance, prestige sports cars. Lamborghini currently produces one
model, the Diablo. Vector, a domestic low volume manufacturer, also
marketing exotic high performance
[[Page 39430]]
sports cars, was originally founded as the ``Vector Car'' Company. The
assets of Vector Car in were purchased by the Vector Aeromotive
Corporation in 1987, and Vector completed redesign and engineering of
its first production car, the Vector W8. During MYs 1991-1993, Vector
manufactured a total of 22 Vector W8 passenger automobiles for
worldwide sales. It did not produce any vehicles in MY 1995.
Need for a Joint Petition for Lamborghini and Vector
Although they manufacture different automobile lines, Lamborghini
and Vector are both controlled by V-Power Corporation. V-Power is the
largest shareholder of Vector, owning 57 percent of the stock; the
remaining 43 percent of Vector is publicly traded on NASDAQ. V-Power
also owns 50 percent of Lamborghini, with the remaining 50 percent held
by Micom/Stedco Ltd. For each of MYs 1995 through 1997, Lamborghini's
and Vector's combined worldwide production will be less than 10,000
automobiles. As both companies are controlled by V-Power, any
alternative CAFE standard would apply to Lamborghini and Vector
together, and a single petition should be submitted for a single
alternative standard, applicable to the combined fleet of these
companies.
NHTSA's regulations on low volume exemptions from CAFE standards
state that petitions for exemption are to be submitted ``not later than
24 months before the beginning of the affected model year, unless good
cause for later submission is shown.'' (49 CFR 525.6(b).)
NHTSA received a petition from Vector Aeromotive Corporation on May
24, 1995 seeking an exemption for the 1995-1998 model years. On May 31,
1995, Vector withdrew this petition. On August 9, 1995, Vector
submitted a joint petition on behalf of itself and Lamborghini seeking
exemption from the passenger automobile fuel economy standards for MYs
1995-1997. On March 14, 1996, the petitioner provided amended data for
Lamborghini/Vector vehicles for MYs 1996 and 1997, indicating improved
fuel economy values.
The Lamborghini/Vector joint petition was filed less than 24 months
before the beginning of MY 1997 and was therefore untimely under 49
C.F.R. 526.6(b). This section requires that petitions ``be submitted
not later than 24 months before the beginning of the affected model
year, unless good cause for late submission is shown.''
Lamborghini/Vector has provided NHTSA with information regarding
the lateness of the joint petition. Lamborghini, which had been
acquired by Chrysler in 1988, was sold to MegaTech Ltd. in February
1994. In September 1994, six months after acquisition of Lamborghini,
MegaTech Ltd., which owned 100 percent of Lamborghini, distributed 50
percent of Lamborghini's stock to V-Power (owner of Vector) and 50
percent to Micom/Stedco Ltd. (an Indonesian shipping and manufacturing
firm).
Chrysler's sale of Lamborghini, which Lamborghini contends occurred
without prior notice, placed significant demands on this small company.
As Lamborghini was no longer a part of Chrysler, it could not rely on
compliance by Chrysler models to permit delayed compliance, as part of
a phase-in, with the Environmental Protection Agency/California Air
Resources Board (EPA/CARB) Tier I emission certifications.
Lamborghini's separation from Chrysler also required that it comply
with the phase-in requirements of Federal motor vehicle safety standard
No. 214, ``Side Impact Protection,'' before it had anticipated having
to do so. These developments, combined with the advent of Lamborghini's
relationship with Vector and the subsequent redesign of the Vector W8
to use a Lamborghini engine, placed considerable demands on the limited
resources of Lamborghini/Vector. NHTSA notes that prior to the
submission of the petition of May 24, 1995, Vector had never before
submitted such a petition to the agency. Similarly, Lamborghini had not
been eligible to submit an exemption petition since it was acquired by
Chrysler in 1988. Preparing a joint petition required considerable
interaction between these two previously unrelated companies. Given
these circumstances, in conjunction with the significant drain on
resources required for compliance with other regulations as noted
above, the agency believes that sufficient good cause has been shown by
Lamborghini/Vector to allow late filing of the joint petition for
exemption for MY's 1995-97.
Methodology Used to Project Maximum Feasible Average Fuel Economy Level
for Lamborghini/Vector
Baseline Fuel Economy
To project the level of fuel economy which could be achieved by
Lamborghini/Vector in MYs 1995-1997, the agency considered whether
there were technical or other improvements that would be feasible for
these vehicles, and whether or not the company currently plans to
incorporate such improvements in the vehicles. The agency reviewed the
technological feasibility of any changes and their economic
practicability.
NHTSA interprets ``technological feasibility'' as meaning that
technology which would be available to Lamborghini/Vector for use on
its MY 1995 through 1997 automobiles, and which would improve the fuel
economy of those automobiles. The areas examined for technologically
feasible improvements were weight reduction, aerodynamic improvements,
engine improvements, drive line improvements, and reduced rolling
resistance.
The agency interprets ``economic practicability'' as meaning the
financial capability of the manufacturer to improve its average fuel
economy by incorporating technologically feasible changes to its MYs
1995 through 1997 automobiles. In assuming that capability, the agency
has always considered market demand as an implicit part of the concept
of economic practicability. Consumers need not purchase what they do
not want.
In accordance with the concerns of economic practicability, NHTSA
has considered only those improvements which would be compatible with
the basic design concepts of Lamborghini and Vector automobiles. Since
NHTSA assumes that Lamborghini and Vector will continue to build exotic
high performance cars, design changes that would remove items
traditionally offered on these cars, such as reducing the displacement
of their engines, were not considered. Such changes to the basic design
would be economically impracticable since they might well significantly
reduce the demand for these automobiles, thereby reducing sales and
causing significant economic injury to the low volume manufacturer.
Technology for Fuel Economy Improvement
The nature of Lamborghini and Vector vehicles generally do not
result in high fuel economy values. Also, Lamborghini and Vector lag in
having the latest developments in fuel efficiency technology because
suppliers generally provide components and technology to small
manufacturers only after supplying large manufacturers.
Lamborghini/Vector state that the requested alternative fuel
economy values represent the best possible CAFE that Lamborghini/Vector
can achieve for MYs 1995 through 1997. However, the joint alternative
fuel economy values decrease from 12.8 mpg in MY 1995 to
[[Page 39431]]
12.6 mpg in MY 1996 (a decrease of 0.2 mpg) and from 12.6 mpg in MY
1996 to 12.5 mpg in MY 1997 (a decrease of 0.1 mpg). The fuel economy
will decrease over the three years because Lamborghini/Vector projects
that Vector sales will increase over MYs 1996 and 1997 while
Lamborghini sales will remain constant. Therefore, fuel economies will
decrease because of the projected increased sales of Vectors, which
have lower fuel economy values than Lamborghini's.
Despite these qualifications, the following describes how
Lamborghini and Vector plan to maximize their respective vehicles' fuel
economy by using state of the art materials and technologies for their
vehicles.
Lamborghini and Vector vehicles share a common engine designed and
produced by Lamborghini. This engine is a 5.7 liter V-12 with a 10:1
compression ratio that produces 492 horsepower at 6,800 revolutions per
minute and 428 foot-pounds of torque at 5,200 rpm. Fuel is delivered to
the engine through a computer-controlled multipoint fuel injection
system. Aluminum alloy is used for all major castings like the engine
crankcase, cylinder heads, induction manifold, gearbox, and axle. The
Lamborghini V-12 is a highly efficient engine which produces extremely
high output for its displacement.
In keeping with the high performance character, Lamborghini and
Vector vehicles are designed to provide a structure that is both strong
and lightweight. Vector uses a semi-monocoque structure and a steel
roll cage with body panels fabricated from carbon-reinforced composite
fiber glass. Front suspension consists of independent, unequal length
A-arms with concentric coil shock absorbers and anti-dive
characteristics. Rear suspension is parallel link, concentric coil
springs with anti-squat characteristics. The hydraulic brake system
includes vacuum assist, quad cylinder calipers and ventilated discs.
The Lamborghini Diablo chassis uses space frame construction with
the unstressed panels, such as the doors and trunk, made of aluminum
alloy and plastic composite. Composite and steel beams were recently
adopted for the energy absorbing bumpers.
All Lamborghini/Vector vehicles have a rear engine driving rear
wheels through five speed manual transmissions. Additionally, Vector W8
vehicles are equipped with ZF transaxle and constant velocity
driveshaft joints. Both the Lamborghini Diablo and the Vector W8 rely
on wide low aspect ratio tires to provide maximum traction and
performance.
Lamborghini/Vector vehicles achieve a very high level of
performance by incorporating an efficient powerplant with a lightweight
structure. Much of the technology used to improve fuel economy in other
vehicles is already employed by Lamborghini/Vector to enhance
performance. Any further improvements in fuel economy in these vehicles
through the use of a smaller powerplant or tires with less rolling
resistance would be contrary to the essential characteristics of the
vehicles and their position in the marketplace.
Model Mix
The Vector W8 and Lamborghini Diablo are similarly sized vehicles
sharing a common V-12 engine. Therefore, any opportunity to improve
fuel economy by changing model mix would be dependent on introduction
of new models or engines. In any event, changing the model mix would
have a negligible effect on fuel economy due to the inherently low fuel
economy of these ultra high performance coupes.
The Effect of Other Vehicle Standards
The new, California emissions standards apply to Lamborghini and
Vector in MY 1995 and the similarly stringent Federal Clean Air Act
Amendments apply in MY 1996. Lamborghini/Vector achieved lower fuel
economy due to compliance with these standards.
Federal Motor Vehicle Safety Standards and other NHTSA standards
also have an adverse effect on fuel economies of Lamborghini and Vector
vehicles. These standards include 49 CFR part 581, Bumper Standard,
Standard No. 214, Side impact protection, and Standard No. 208,
Occupant crash protection. These standards tend to reduce achievable
CAFE levels, since they result in increased vehicle weight. Engineering
resources are necessarily devoted to meeting the standards, since, in
order to remain in the market, Lamborghini/Vector must meet these
mandatory standards.
The Need of the Nation To Conserve Energy
The agency recognizes there is a need to conserve energy, to
promote energy security, and to improve balance of payments. However,
as stated above, NHTSA has tentatively determined that it is not
technologically feasible or economically practicable for Lamborghini/
Vector to achieve an average fuel economy in MYs 1995 through 1997
above the levels set forth in this proposed decision. Granting an
exemption to Lamborghini/Vector and setting an alternative standard at
that level would result in only a negligible increase in fuel
consumption and would not affect the need of the Nation to conserve
energy. In fact, there would not be any increase since Lamborghini/
Vector cannot attain those generally applicable standards.
Nevertheless, the agency estimates that the additional fuel consumed by
operating the MYs 1995 through 1997 fleets of Lamborghini/Vector
vehicles at the combined projected CAFE of 12.8 mpg for MY 1995, 12.6
mpg for MY 1996, and 12.5 mpg for MY 1997 is insignificant compared to
the fuel used each day by the entire U.S. motor vehicle fleet for
passenger cars in 1994.
Maximum Feasible Average Fuel Economy for Lamborghini/Vector
The agency has tentatively concluded that it would not be
technologically feasible and economically practicable for Lamborghini/
Vector to improve the fuel economy of their MY 1995 through 1997 fleets
above an average of 12.8 mpg for MY 1995, 12.6 mpg for MY 1996, and
12.5 mpg for MY 1997. Federal automobile standards would not adversely
affect achievable fuel economy beyond the amount already factored into
Lamborghini/Vector's projections, and that the national effort to
conserve energy would not be affected by granting the requested
exemption and establishing an alternative standard.
Proposed Level and Type of Alternative Standard
NHTSA tentatively concludes that the maximum feasible average fuel
economy for Lamborghini/Vector is 12.8 mpg in MY 1995, 12.6 mpg in MY
1996, and 12.5 mpg in MY 1997. The agency also tentatively concludes
that it would be appropriate to establish a separate standard for
Lamborghini/Vector for the following reasons. The agency has already
granted petitions submitted by Rolls Royce for alternative standards of
14.6 mpg for MY's 1995-96 and 15.1 mpg for MY 1997. NHTSA has also
granted a petition from Mednet, Inc. (successor company to Dutcher
Motors) for an alternative standard of 17.0 mpg for MYs 1996-98.
Therefore, the agency cannot use the second (class standards) or third
(single standard for all exempted manufacturers) approaches for MYs
1995, 1996, and 1997.
Regulatory Impact Analyses
NHTSA has analyzed this proposal and determined that neither
Executive Order 12866 nor the Department of
[[Page 39432]]
Transportation's regulatory policies and procedures apply. Under
Executive Order 12866, the proposal would not establish a ``rule,''
which is defined in the Executive Order as ``an agency statement of
general applicability and future effect.'' The proposed exemption is
not generally applicable, since it would apply only to Lamborghini
Automobili and Vector Aeromotive as discussed in this notice. Under DOT
regulatory policies and procedures, the proposed exemption would not be
a ``significant regulation.'' If the Executive Order and the
Departmental policies and procedures were applicable, the agency would
have determined that this proposed action is neither major nor
significant. The principal impact of this proposal is that the exempted
company would not be required to pay civil penalties if its maximum
feasible average fuel economy were achieved, and purchasers of those
vehicles would not have to bear the burden of those civil penalties in
the form of higher prices. Since this proposal sets an alternative
standard at the level determined to be the maximum feasible levels for
Lamborghini/Vector for MYs 1995 through 1997, no fuel would be saved by
establishing a higher alternative standard. NHTSA finds in the Section
on ``The Need of the Nation to Conserve Energy'' that because of the
small size of the Lamborghini/Vector fleet, the incremental usage of
gasoline by Lamborghini/Vector's customers would not affect the
nation's need to conserve gasoline. There would not be any impacts for
the public at large.
The agency has also considered the environmental implications of
this proposed exemption in accordance with the National Environmental
Policy Act and determined that this proposed exemption, if adopted,
would not significantly affect the human environment. Regardless of the
fuel economy of the exempted 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 proposed exemptions
and alternative standards. Further, since the exempted passenger
automobiles cannot achieve better fuel economy than is proposed herein,
granting these proposed exemptions would not affect the amount of fuel
used.
Interested persons are invited to submit comments on the proposed
decision. It is requested but not required that 10 copies be submitted.
All comments must not exceed 15 pages in length (49 CFR 553.21).
Necessary attachments may be appended to these submissions without
regard to the 15 page limit. This limitation is intended to encourage
commenters to detail their primary arguments in a concise fashion.
If a commenter wishes to submit certain information under a claim
of confidentiality, three copies of the complete submission, including
purportedly confidential business information, should be submitted to
the Chief Counsel, NHTSA, at the street address given above, and seven
copies from which the purportedly confidential business information has
been deleted, should be submitted to the Docket Section. A request for
confidentiality should be accompanied by a cover letter setting forth
the information specified in the agency's confidential business
information regulation. 49 CFR part 512.
All comments received before the close of business on the comment
closing indicated above for the proposal will be considered, and will
be available for examination in the docket at the above address both
before and after that date. To the extent possible, comments filed
after the closing date will also be considered. Comments received too
late for consideration in regard to the final rule will be considered
as suggestions for further rulemaking action. Comments on the proposal
will be available for inspection in the docket. NHTSA will continue to
file relevant information as it becomes available in the docket after
the closing date, and it is recommended that interested persons
continue to examine the docket for new material.
Those persons desiring to be notified upon receipt of their
comments in the rules docket should enclose a self-addressed, stamped
postcard in the envelope with their comments. Upon receiving the
comments, the docket supervisor will return the postcard by mail.
List of Subjects in 49 CFR Part 531
Energy conservation, Gasoline, Imports, Motor vehicles.
In consideration of the foregoing, 49 CFR part 531 would be amended
to read as follows:
PART 531--[AMENDED]
1. The authority citation for part 531 would be revised to read as
follows:
Authority: 49 U.S.C. 32902, delegation of authority at 49 CFR
1.50.
2. In Sec. 531.5, the introductory text of paragraph (b) is
republished for the convenience of the reader and paragraph (b)(13)
would be added 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) Automobili Lamborghini S.p.A./Vector Aeromotive Corporation.
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Average
fuel
economy
Model year standard
(miles
per
gallon)
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1995.......................................................... 12.8
1996.......................................................... 12.6
1997.......................................................... 12.5
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Issued on: July 22, 1996.
Barry Felrice,
Associate Administrator for Safety Performance Standards.
[FR Doc. 96-19070 Filed 7-26-96; 8:45 am]
BILLING CODE 4910-59-P