[Federal Register Volume 64, Number 82 (Thursday, April 29, 1999)]
[Notices]
[Pages 23149-23161]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-10562]


-----------------------------------------------------------------------

DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration


Automotive Fuel Economy Program, Report to Congress

    The attached document, 23rd Annual Report to Congress on the 
Automotive Fuel Economy Program, was prepared pursuant to 49 U.S.C. 
32916 et seq. which requires that ``the Secretary shall transmit to 
each House of Congress, and publish in the Federal Register, a review 
of the average fuel economy standards under this part.''
    The 23rd Annual Report to Congress on the Automotive Fuel Economy 
Program summarizes the fuel economy performance of the vehicle fleet 
and the activities of the National Highway Traffic Safety 
Administration (NHTSA) during 1998. Included in this report is a 
section summarizing rulemaking activities during 1998. This report is 
available on the Internet at: http://www.nhtsa.dot.gov/cars/problems/
studies/fuelecon/index.html. To obtain paper copies of this document, 
you may contact NHTSA's Publications Ordering and Distribution Services 
on (202) 366-1566.

    Issued on: April 20, 1999.
L. Robert Shelton,
Associate Administrator for Safety Performance Standards.
U.S. Department of Transportation

Automotive Fuel Economy Program

National Highway Traffic Safety Administration

Twenty-third Annual Report to Congress Calendar Year 1998
    This publication is distributed by the United States Department of 
Transportation, National Highway Traffic Safety Administration, in the 
interest of information exchange. The opinions, findings, and 
conclusions expressed in this publication are those of the author(s) 
and not necessarily those of the Department of Transportation or the 
National Highway Traffic Safety Administration. The United States 
Government assumes no liability for its contents or use thereof. If 
trade or manufacturers' name or products are mentioned, it is because 
they are considered essential to the object of the publication and 
should not be construed as an endorsement. The United States Government 
does not endorse products or manufacturers.

AUTOMOTIVE FUEL ECONOMY PROGRAM

TWENTY-THIRD ANNUAL REPORT TO CONGRESS

CALENDAR YEAR 1998

Table of Contents

Section I: Introduction
Section II: Vehicle Fuel Economy Performance and Characteristics
    A. Fuel Economy Performance by Manufacturer
    B. Characteristics of the MY 1998 Passenger Car Fleet
    C. Characteristics of the MY 1998 Light Truck Fleet
    D. Passenger Car and Light Truck Fleet Economy Averages
    E. Domestic and Import Fleet Fuel Economy Averages
Section III: 1998 Activities
    A. Light Truck CAFE Standards
    B. Low Volume Petitions
    C. Enforcement
    D. Contract Activities

Section I: Introduction

    The 23rd Annual Report to Congress on the Automotive Fuel Economy 
Program summarizes the fuel economy performance of the vehicle fleet 
and the activities of the National Highway Traffic Safety 
Administration (NHTSA) during 1998, in accordance with 49 U.S.C. 32916 
et seq., which requires the submission of a report each year. Included 
in this report is a section

[[Page 23150]]

summarizing rulemaking activities during 1998.
    The Secretary of Transportation is required to administer a program 
for regulating the fuel economy of new passenger cars and light trucks 
in the United States market. The authority to administer the program 
was delegated by the Secretary to the Administrator of NHTSA, 49 CFR 
1.50(f).
    NHTSA's responsibilities in the fuel economy area include:
    (1) Establishing and amending average fuel economy standards for 
manufacturers of passenger cars and light trucks, as necessary;
    (2) Promulgating regulations concerning procedures, definitions, 
and reports necessary to support the fuel economy standards;
    (3) Considering petitions for exemption from established fuel 
economy standards by low volume manufacturers (those producing fewer 
than 10,000 passenger cars annually worldwide) and establishing 
alternative standards for them;
    (4) Preparing annual reports to Congress on the fuel economy 
program;
    (5) Enforcing fuel economy standards and regulations; and
    (6) Responding to petitions concerning domestic production by 
foreign manufacturers, and other matters.
    Passenger car fuel economy standards were established by Congress 
for Model Year (MY) 1985 and thereafter at a level of 27.5 miles per 
gallon (mpg). NHTSA is authorized to amend the standard above or below 
that level. Standards for light trucks were established by NHTSA for 
MYs 1979 through 2000. NHTSA set a combined standard of 20.7 mpg for 
light truck fleets for MY 2000. All current standards are listed in 
Table 
I-1.

      Table I-1.--Fuel Economy Standards for Passenger Cars and Light Trucks Model Years 1978 through 1999
                                                    [In MPG]
----------------------------------------------------------------------------------------------------------------
                                                                                 Light Trucks \1\
                                                                 -----------------------------------------------
                   Model years                    Passenger cars     Two-wheel      Four-wheel
                                                                       drive           drive       combined \2\
--------------------------------------------------------------------------------------------------------\3\-----
1978............................................        \4\ 18.0  ..............  ..............  ..............
1979............................................        \4\ 19.0            17.2            15.8  ..............
1980............................................        \4\ 20.0            16.0            14.0           (\5\)
1981............................................            22.0        \6\ 16.7            15.0           (\5\)
1982............................................            24.0            18.0            16.0            17.5
1983............................................            26.0            19.5            17.5            19.0
1984............................................            27.0            20.3            18.5            20.0
1985............................................        \4\ 27.5        \7\ 19.7        \7\ 18.9         \7\ 9.5
1986............................................        \8\ 26.0            20.5            19.5            20.0
1987............................................        \9\ 26.0            21.0            19.5            20.5
1988............................................        \9\ 26.0            21.0            19.5            20.5
1989............................................       \10\ 26.5            21.5            19.0            20.5
1990............................................        \4\ 27.5            20.5            19.0            20.0
1991............................................        \4\ 27.5            20.7            19.1            20.2
1992............................................        \4\ 27.5                                            20.2
1993............................................        \4\ 27.5                                            20.4
1994............................................        \4\ 27.5                                            20.5
1995............................................        \4\ 27.5                                            20.6
1996............................................        \4\ 27.5                                            20.7
1997............................................        \4\ 27.5                                            20.7
1998............................................        \4\ 27.5                                            20.7
1999............................................        \4\ 27.5                                            20.7
2000............................................        \4\ 27.5                                           20.7
----------------------------------------------------------------------------------------------------------------
\1\ Standards for MY 1979 light trucks were established for vehicles with a gross vehicle weight rating (GVWR)
  of 6,000 pounds or less. Standards for MY 1980 and beyond are for light trucks with a GVWR of 8,500 pounds or
  less.
\2\ For MY 1979, light truck manufacturers could comply separately with standards for four-wheel drive, general
  utility vehicles and all other light trucks, or combine their trucks into a single fleet and comply with the
  standard of 17.2 mpg.
\3\ For MYs 1982-1991, manufacturers could comply with the two-wheel and four-wheel drive standards or could
  combine all light trucks and comply with the combined standard.
\4\ Established by Congress in Title V of the Act.
\5\ A manufacturer whose light truck fleet was powered exclusively by basic engines which were not also used in
  passenger cars could meet standards of 14 mpg and 14.5 mpg in MYs 1980 and 1981, respectively.
\6\ Revised in June 1979 from 18.0 mpg.
\7\ Revised in October 1984 from 21.6 mpg for two-wheel drive, 19.0 mpg for four-wheel drive, and 21.0 mpg for
  combined.
\8\ Revised in October 1985 from 27.5 mpg.
\9\ Revised in October 1986 from 27.5 mpg.
\10\ Revised in September 1988 from 27.5 mpg.

Section II: Vehicle Fuel Economy Performance and Characteristics

A. Fuel Economy Performance by Manufacturer

    The fuel economy achievements for domestic and foreign-based 
manufacturers in MY 1997 were updated to include final Environmental 
Protection Agency (EPA) calculations, where available, since the 
publication of the Twenty-second Annual Report to the Congress. These 
fuel economy achievements and current projected data for MY 1998 are 
listed in Tables II-1 and II-2.
    Overall fleet fuel economy for passenger cars was 28.7 mpg in MY 
1998, an increase of 0.1 mpg from the MY 1997 level. For MY 1998, 
Corporate Average Fuel Economy (CAFE) values increased above MY 1997 
levels for ten of 23 passenger car manufacturers' fleets. (See Table 
II-1.) These ten

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companies accounted for more than 51 percent of the total MY 1998 
production. Twelve manufacturers declined below their MY 1997 levels 
due to increased market demand for heavier and high performance 
passenger cars, while one manufacturer remained at its MY 1997 level. 
Manufacturers generally continued to introduce new technologies and 
more fuel-efficient models, and some larger, less fuel-efficient 
models. For MY 1998, the overall domestic manufacturers' fleet average 
fuel economy was 28.0 mpg. For MY 1998, Chrysler, and Ford/Mazda 
domestic passenger cars CAFE values rose 1.2 mpg and 0.4 mpg from their 
1997 levels, while General Motors, Honda, and Toyota fell 0.4 mpg, 0.4 
mpg, and 0.2 mpg, respectively, from their MY 1997 levels. Overall, the 
domestic manufacturers' combined CAFE increased 0.1 mpg above MY 1997 
level.

  Table II-1.--Passenger Car Fuel Economy Performance by Manufacturer*
                       [Model years 1997 and 1998]
------------------------------------------------------------------------
                                               Model year cafe (MPG)
              Manufacturer               -------------------------------
                                               1997            1998
------------------------------------------------------------------------
DOMESTIC:
    Chrysler............................            27.5            28.7
    Ford/Mazda..........................            27.2            27.6
    General Motors......................            28.2            27.8
    Honda...............................            29.9            29.5
    Nissan..............................  ..............            29.9
    Toyota..............................            28.8            28.6
Sales Weighted Average (Domestic).......            27.9            28.0
IMPORT:
    BMW.................................            25.7            25.2
    Chrysler............................            26.4            25.8
    Fiat................................            13.7            13.4
    Ford/Mazda..........................            31.1            29.5
    General Motors......................            31.3            28.9
    Honda...............................            34.4            34.6
    Hyundai.............................            30.9            31.5
    Kia.................................            30.6            30.6
    Mercedes-Benz.......................            25.2            27.1
    Mitsubishi..........................            30.0            29.7
    Nissan..............................            29.9            30.7
    Porsche.............................            23.2            24.5
    Subaru..............................            28.0            27.6
    Suzuki..............................            33.9            35.8
    Toyota..............................            30.1            30.7
    Volvo...............................            25.8            25.7
    Volkswagen..........................            28.6            28.7
Sales Weighted Average (Import).........            29.8            29.9
                                         -------------------------------
    Total Fleet Average.................            28.6            28.7
Fuel Economy Standards..................            27.5           27.5
------------------------------------------------------------------------
*Manufacturers with low volume alternate fuel economy standards are not
  listed.


   Table II-2.--Light Truck Fuel Economy Performance by Manufacturer *
                       [Model years 1997 and 1998]
------------------------------------------------------------------------
                                               Model year CAFE (MPG)
                                         -------------------------------
              Manufacturer                           Combined
                                         -------------------------------
                                               1997            1998
------------------------------------------------------------------------
Domestic:
    Chrysler............................            20.2            20.5
    Ford/Mazda..........................            20.0            20.1
    General Motors......................            20.2            21.1
Sales Weighted Average (Domestic).......            20.1            20.5
Foreign Based:
    Honda...............................            27.1            27.1
    Isuzu...............................            19.4            21.4
    Kia.................................            23.8            23.7
    Land Rover..........................            17.2            17.2
    Mercedes-Benz.......................  ..............            21.3
    Mitsubishi..........................            22.3            22.5
    Nissan..............................            22.1            22.2
    Suzuki..............................            27.4            27.2
    Toyota..............................            22.6            23.5
Sales Weighted Average (Foreign Based)..            22.1            22.9
    Total Fleet Average.................            20.4            20.9

[[Page 23152]]

 
Fuel Economy Standards..................            20.7           20.7
------------------------------------------------------------------------
* Mercedes-Benz began introducing light trucks in MY 1998.

    In MY 1998, the fleet average fuel economy for import passenger 
cars increased by 0.1 mpg from the MY 1997 CAFE level to 29.9 mpg. 
Eight of the 17 import car manufacturers increased their CAFE values 
between MYs 1997 and 1998, while eight others decreased and one was 
unchanged.
    Figure II-1 illustrates the changes in total new passenger car 
fleet CAFE from MY 1978 to MY 1998.
    The total light truck fleet CAFE increased 0.5 mpg above the MY 
1997 CAFE level of 20.4 mpg (see Table II-2). Figure II-2 illustrates 
the trends in total light truck fleet CAFE from MY 1979 to MY 1998.
    Six passenger car manufacturers (BMW, Chrysler Import, Fiat, 
Mercedes-Benz, Porsche, and Volvo) and three light truck manufacturers 
(Chrysler, Ford/Mazda, and Land Rover) are projected to fail to achieve 
the levels of the MY 1998 CAFE standards. However, NHTSA is not yet 
able to determine which of these manufacturers may be liable for civil 
penalties for non-compliance. Some MY 1998 CAFE values may change when 
final figures are provided to NHTSA by EPA, in mid-1999. In addition, 
several manufacturers are not expected to pay civil penalties because 
the credits they earned by exceeding the fuel economy standards in 
earlier years offset later shortfalls. Other manufacturers may file 
carryback plans to demonstrate that they anticipate earning credits in 
future model years to offset current deficits.
    Beginning in MY 1998, Nissan reported a domestic passenger car 
fleet consisting of its Altima model vehicle which is built in Smryna, 
Tennessee. This fleet had the highest CAFE of the domestic passenger 
car fleets, but it was also the smallest fleet.

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B. Characteristics of the MY 1998 Passenger Car Fleet

    The characteristics of the MY 1998 passenger car fleet reflect a 
continuing trend toward satisfying consumer demand for higher 
performance cars. (See Table II-3.) From MY 1997 to MY 1998, 
horsepower/100 pounds, a measure of vehicle performance, increased from 
5.02 to 5.11 for domestic passenger cars and from 4.82 to 4.93 for 
import passenger cars. The total fleet average for passenger cars 
increased from 4.95 horsepower/100 pounds in MY 1997 to 5.05 in MY 
1998, the highest level in the 42 years for which the agency has data. 
Compared with MY 1997, the average curb weight for MY 1998 decreased by 
24 pounds for the domestic fleet and increased by 48 pounds for the 
import fleet. The total new passenger car fleet weight increased only 
from 3,071 pounds in MY 1997 to 3,075 pounds in MY 1998, primarily 
because of the larger share held by the domestic fleet. Average engine 
displacement decreased from 180 to 174 cubic inches for domestic 
passenger cars and increased from 135 to 137 cubic inches for import 
passenger cars, from MY 1997 to MY 1998.
    The 0.1 mpg fuel economy improvement for the MY 1998 domestic 
passenger car fleet may be attributed in part to weight reduction and 
mix shifts.
    The size/class breakdown shows an increased trend primarily toward 
mid-size passenger cars with the reduction of two-seater, minicompact, 
subcompact, compact, and large passenger cars for the overall fleet. 
The size/class mix in the domestic fleet shifted from two-seater, 
compact, and large passenger cars to subcompact and mid-size passenger 
cars. The size/class mix in the import fleet shifted from two-seater, 
minicompact, subcompact, and large passenger cars to compact and mid-
size passenger cars. The import share of the passenger car market 
declined in MY 1998, as more foreign-based manufacturers achieved 75 
percent domestic content for their U.S. and Canadian-assembled 
passenger cars.
    The share of turbocharged and supercharged engines increased by 0.5 
percentage points in MY 1998. Diesel engine shares increased in MY 
1998. Diesel engines were offered on certain Mercedes and Volkswagen 
models during MY 1998.
    Passenger car fleet average characteristics have changed 
significantly since MY 1978 (the first year of fuel economy standards). 
(See Table II-4.) After substantial initial weight loss (from MY 1978 
to MY 1982, the average passenger car fleet curb weight decreased from 
3,349 to 2,808 pounds), the curb weight stabilized between 2,800 and 
3,075 pounds. Table II-4 shows that the MY 1998 passenger car fleet has 
nearly equal interior volume and higher performance, but with more than 
44 percent better fuel economy, than the MY 1978 fleet. (See Figure II-
3.)

C. Characteristics of the MY 1998 Light Truck Fleet

    The characteristics of the MY 1998 light truck fleet are shown in 
Table II-5. Light truck manufacturers are not required to divide their 
fleets into domestic and import fleets based on the 75-percent domestic 
content threshold used for passenger car fleets. In Table II-5, the 
light truck fleet is subdivided according to two-wheel drive or four-
wheel drive.

                                         Table II-3.--Passenger Car Fleet Characteristics for MYs 1997 and 1998
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                    Total fleet                   Domestic fleet                   Import fleet
                                                         -----------------------------------------------------------------------------------------------
                                                               1997            1998            1997            1998            1997            1998
--------------------------------------------------------------------------------------------------------------------------------------------------------
Characteristics:
    Fleet Average Fuel Economy, mpg.....................           28.6            28.7            27.9            28.0            29.8            29.9
    Fleet Average Curb Weight, lbs......................         3071            3075            3143            3119            2944            2992
    Fleet Average Engine Displacement, cu. in...........          164             161             180             174             135             137
    Fleet Average Horsepower/Weight ratio, HP/100 lbs...            4.95            5.05            5.02            5.11            4.82            4.93
    Pecent of Fleet.....................................          100             100              63.6            65.7            36.4            34.3
Segmentation by EPA Size Class, Percent:
    Two-Seater..........................................            1.0             0.7             0.3             0.2             2.3             1.7
    Minicompact.........................................            0.6             0.4             0.0             0.0             1.6             1.2
    Subcompact*.........................................           17.6            16.7             7.2            10.4            35.9            28.7
    Compact*............................................           37.4            35.8            39.3            35.8            33.9            35.8
    Mid-Size*...........................................           30.3            34.1            33.3            35.4            25.2            31.6
    Large*..............................................           13.1            12.3            19.9            18.2             1.2             1.0
    Diesel Engines......................................            0.08            0.19            0.0             0.0             0.2             0.6
    Turbo or Supercharged Engines.......................            1.5             2.0             1.3             1.2             1.8             3.6
    Fuel Injection......................................          100             100             100             100             100             100
    Front-Wheel Drive...................................           85.8            87.0            87.8            90.9            82.2            79.5
    Automatic Transmissions.............................           86.1            86.4            91.4            90.4            77.0            78.9
    Automatic Transmissions with Lockup Clutches........           97.7            99.2           100              99.0            93.1            99.8
    Automatic Transmissions with Four or more Forward              92.1            92.0            90.6            90.8            95.2            94.8
     Speeds.............................................
    percent Electric....................................            0.02            0.0             0.04            0.0             0.0             0.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
*Includes associated station wagons.


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                          Table II-4.--New Passenger Car Fleet Average Characteristics
                                             [Model years 1978-1998]
----------------------------------------------------------------------------------------------------------------
                                                                                                    Horsepower/
           Model year              Fuel economy     Curb weight   Interior space    Engine size    weight  (hp/
                                       (mpg)           (lb.)         (cu. ft.)       (cu. in.)       100 lb.)
----------------------------------------------------------------------------------------------------------------
1978............................            19.9            3349             112             260            3.68
1979............................            20.3            3180             110             238            3.72
1980............................            24.3            2867             105             187            3.51
1981............................            25.9            2883             108             182            3.43
1982............................            26.6            2808             107             173            3.47
1983............................            26.4            2908             109             182            3.57
1984............................            26.9            2878             108             178            3.66
1985............................            27.6            2867             108             177            3.84
1986............................            28.2            2821             106             169            3.89
1987............................            28.5            2805             109             162            3.98
1988............................            28.8            2831             107             161            4.11
1989............................            28.4            2879             109             163            4.24
1990............................            28.0            2908             108             163            4.53
1991............................            28.4            2934             108             164            4.42
1992............................            27.9            3007             108             169            4.56
1993............................            28.4            2971             109             164            4.62
1994............................            28.3            3011             109             169            4.79
1995............................            28.6            3047             109             166            4.87
1996............................            28.7            3047             109             164            4.92
1997............................            28.6            3071             109             164            4.95
1998............................            28.7            3075             109             161            5.05
----------------------------------------------------------------------------------------------------------------


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                      Table II-5.--Light Truck Fleet Characteristics for MYs 1997 and 1998
----------------------------------------------------------------------------------------------------------------
                                      Total fleet               Two-wheel drive            Four-wheel drive
                             -----------------------------------------------------------------------------------
                                  1997          1998          1997          1998          1997          1998
----------------------------------------------------------------------------------------------------------------
Characteristics:
    Fleet Average Fuel               20.4          20.9          21.7          22.4          19.0          19.1
     Economy, mpg...........
    Fleet Average Equivalent       4471          4435          4283          4255          4703          4679
     Test Weight, lbs.......
    Fleet Average Engine            249           243           235           228           266           263
     Displacement, cu. in...
    Fleet Average Horsepower/         4.20          4.23          4.18          4.20          4.23          4.26
     Weight ratio, HP/100
     lbs....................
    Percent of Fleet........        100           100            55.3          57.4          44.7          42.6
    Percent of Fleet from            14.2          15.5           9.6          11.4          19.8          21.1
     Foreign-based
     Manufacturers..........
Segmentation by Type,
 Percent:
    Passenger Van...........         16.4          18.5          28.1          31.4           1.9           1.3
    Cargo Van...............          3.9           3.3           6.9           5.6           0.3           0.2
    Small-Pickup:
        Two-Wheel Drive.....          6.0           7.3          10.8          12.8           0.0           0.0
    Large Pickup:
        Two-Wheel Drive.....         20.8          17.1          37.6          29.7           0.0           0.0
        Four-Wheel Drive....         14.8          13.3           0.0           0.0          33.1          31.3
    Special Purpose:
        Two-Wheel Drive.....          9.2          11.8          16.6          20.6           0.0           0.0
        Four-Wheel Drive....         28.9          28.7           0.0           0.0          64.7          67.3
    Diesel Engines..........          0.03          0.02          0.01          0.01          0.04          0.04
    Turbo/Supercharged                0.11          0.25          0.13          0.01          0.10          0.56
     Engines................
    Fuel Injection..........        100           100           100           100           100           100
    Automatic Transmissions.         85.1          86.1          83.1          85.0          87.7          87.6
    Automatic Transmissions          95.5          99.3          99.1          99.1         100           100
     with Lockup Clutches...
    Automatic Transmissions          99.5          95.1          92.2          92.2          98.5          94.6
     with Four or More
     Forward Speeds.........
    Precent Electric........          0.0           0.01          0.0           0.02          0.0           0.00
----------------------------------------------------------------------------------------------------------------

    The MY 1998 average test weight of the total light truck fleet 
decreased by 36 pounds under that for MY 1997. The average fuel economy 
of the fleet increased by 0.5 mpg to 20.9 mpg. Diesel engine usage 
declined slightly in light trucks to 0.02 percent in MY 1998 from 0.03 
percent in MY 1997. The share of the MY 1998 two-wheel drive fleet 
increased by 2.1 percentage points over that for the MY 1997 level of 
55.3 percent.
    CAFE levels for light trucks in the 0-8,500 pounds gross vehicle 
weight (GVW) class increased from 18.5 mpg in MY 1980 to 21.7 mpg in MY 
1987, before declining to 20.9 mpg in MY 1998, influenced by an 
increase in performance. Light truck production increased from 1.9 
million in MY 1980 to 6.5 million in MY 1998. Light trucks comprised 44 
percent of the total light duty vehicle fleet production in MY 1998, 
more than 2.5 times the share in MY 1980.

D. Passenger Car and Light Truck Fleet Economy Averages

    Figure II-4 illustrates an increase in the light duty fleet 
(combined passenger cars and light trucks) average fuel economy through 
MY 1987, followed by a gradual decline. (See also Table II-6). 
Passenger car average fuel economy remained relatively constant for MYs 
1987-1998. The overall decline in fuel economy illustrates the growing 
influence of light trucks and their significant impact on the light 
duty fleet.

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                     Table II-6.--Domestic and Import Passenger Car and Light Truck Fuel Economy Averages for Model Years 1978-1998
                                                                        [In MPG]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                               Domestic                             Import                                                       Light
                                 ------------------------------------------------------------------------              All light     Total       truck
           Model year                            Light                               Light                 All cars     trucks       fleet     share of
                                      Car        truck     Combined       Car       truck*     Combined                                        fleet (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1978............................        18.7                                27.3                                19.9
1979............................        19.3        17.7        19.1        26.1        20.8        25.5        20.3        18.2        20.1         9.8
1980............................        22.6        16.8        21.4        29.6        24.3        28.6        24.3        18.5        23.1        16.7
1981............................        24.2        18.3        22.9        31.5        27.4        30.7        25.9        20.1        24.6        17.6
1982............................        25.0        19.2        23.5        31.1        27.0        30.4        26.6        20.5        25.1        20.1
1983............................        24.4        19.6        23.0        32.4        27.1        31.5        26.4        20.7        24.8        22.5
1984............................        25.5        19.3        23.6        32.0        26.7        30.6        26.9        20.6        25.0        24.4
1985............................        26.3        19.6        24.0        31.5        26.5        30.3        27.6        20.7        25.4        25.9
1986............................        26.9        20.0        24.4        31.6        25.9        29.8        28.2        21.5        25.9        28.6
1987............................        27.0        20.5        24.6        31.2        25.2        29.6        28.5        21.7        26.2        28.1
1988............................        27.4        20.6        24.5        31.5        24.6        30.0        28.8        21.3        26.0        30.1
1989............................        27.2        20.4        24.2        30.8        23.5        29.2        28.4        21.0        25.6        30.8
1990............................        26.9        20.3        23.9        29.9        23.0        28.5        28.0        20.8        25.4        30.1
1991............................        27.3        20.9        24.4        30.1        23.0        28.4        28.4        21.3        25.6        32.2
1992............................        27.0        20.5        23.8        29.2        22.7        27.9        27.9        20.8        25.1        32.9
1993............................        27.8        20.7        24.2        29.6        22.8        28.1        28.4        21.0        25.2        37.4
1994............................        27.5        20.5        23.5        29.7        22.1        27.8        28.3        20.8        24.7        40.2
1995............................        27.7        20.3        23.8        30.3        21.5        27.9        28.6        20.5        24.9        37.4
1996............................        28.3        20.5        24.1        29.7        22.2        27.7        28.7        20.7        24.9        39.4
1997............................        27.9        20.1        23.3        29.8        22.1        27.5        28.6        20.4        24.4        42.8
1998............................        28.0        20.5        23.3        29.9        22.9        27.6        28.7        20.9        24.6        44.5
--------------------------------------------------------------------------------------------------------------------------------------------------------
*Light trucks from foreign-based manufacturers.

    While passenger car and light truck fleet fuel economies increased 
from MY 1997 to MY 1998 by 0.1 mpg and 0.5 mpg, respectively, the total 
fleet fuel economy for MY 1998 increased by 0.2 mpg to 24.6 mpg. The 
shift to light trucks for general transportation is an important trend 
in consumers' preference and has a significant fleet fuel consumption 
effect.

E. Domestic and Import Fleet Fuel Economy Averages

    Domestic and import passenger car fleet average fuel economies have 
improved since MY 1978, although the increase is far more dramatic for 
the domestic fleet. The domestic passenger car fleet CAFE has continued 
to increase gradually since MY 1978, but the import passenger car fleet 
CAFE peaked in MY 1984 and has declined since then. In MY 1998, the 
domestic passenger car fleet average fuel economy was 28.0 mpg. The 
import passenger car fleet average fuel economy was 29.9 mpg. Compared 
with MY 1978, this reflects an increase of 9.3 mpg for domestic cars 
and 2.6 mpg for import cars.
    Since MY 1980, the total light truck fleet average fuel economy and 
the average for domestic light truck manufacturers have improved 
overall, but both have remained below the fuel economy level for the 
foreign based light truck fleet. The foreign based light truck average 
fuel economy has decreased significantly since its highest level of 
27.4 mpg for MY 1981 to 22.9 mpg for MY 1998. For MY 1998, the domestic 
light truck fleet has an average fuel economy level of 20.5 mpg, which 
is 2.4 mpg lower than the foreign based light truck fleet. For MY 1998, 
the foreign based light truck fleet fuel economy increased 0.8 mpg 
above the MY 1997 level to 22.9 mpg. The domestic manufacturers 
continued to dominate the light truck market, comprising 84 percent of 
the total light truck fleet.
    The disparity between the average CAFEs of the import and domestic 
manufacturers has declined in recent years as domestic manufacturers 
have maintained relatively stable CAFE values while the import 
manufacturers moved to larger vehicles and more four-wheel drive light 
trucks, thus lowering their CAFE values.

Section III: 1998 Activities

A. Light Truck CAFE Standards

    On April 6, 1998, NHTSA published a final rule establishing a 
combined standard of 20.7 mpg for light trucks for MY 2000. The 
Department of Transportation and Related Agencies Appropriations Act 
for Fiscal Year 1998, Pub. L. 105-66, precludes the agency from setting 
the MY 2000 standard at a level other than the level for MY 1999.

B. Low Volume Petitions

    49 U.S.C. 32902(d) provides that a low volume manufacturer of 
passenger cars may be exempted from the generally applicable passenger 
car fuel economy standards if these 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. A low volume manufacturer is one that 
manufactured fewer than 10,000 passenger cars worldwide, in the model 
year for which the exemption is sought (the affected model year) and in 
the second model year preceding that model year.
    In 1998, NHTSA acted on three low volume petitions filed by 
DeTomaso, Lamborghini and Vector, and Rolls-Royce.
    DeTomaso filed a low volume petition for its high performance 
exotic vehicle, Mangusta. DeTomaso requested alternative standards for 
its passenger cars for MYs 2000 and 2001. NHTSA is reviewing this 
petition and will respond in early 1999.
    Lamborghini and Vector submitted a joint petition requesting that 
each company be exempted from the generally applicable average fuel 
economy standard and requested that lower alternative standards for 
their passenger cars for MYs 1998 and 1999. The agency published a 
proposal

[[Page 23161]]

announcing NHTSA's tentative conclusion that Lamborghini and Vector 
should be exempted from the MY 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 
Lamborghini and Vector (63 FR 5774; February 4, 1998). Thereafter, on 
July 24, 1998, Audi AG, a wholly owned subsidiary of Volkswagen, 
acquired full ownership of Lamborghini. This acquisition causes 
Lamborghini to be ineligible for an exemption under 49 U.S.C. Section 
32902(d) for MYs 1998 and 1999. However, Vector remains eligible for an 
exemption from the generally applicable average fuel economy standard. 
A final decision will be issued in early 1999.
    NHTSA also witnessed the acquisition of another low volume 
manufacturer by an import manufacturer. On July 3, 1998, Volkswagen AG 
(Volkswagen) purchased Rolls-Royce Motor Cars. Volkswagen's acquisition 
of Rolls-Royce renders this low volume manufacturer ineligible for an 
exemption under 49 U.S.C. Section 32902(d) for MY 1998 and thereafter. 
Together, Audi and Volkswagen have an annual worldwide production of 
more than 10,000 vehicles.

C. Enforcement

    49 U.S.C. 32912(b) imposes a civil penalty of $5.50 for each tenth 
of a mpg by which a manufacturer's CAFE level falls short of the 
standard, multiplied by the total number of passenger automobiles or 
light trucks produced by the manufacturer in that model year. Credits 
earned for exceeding the standard in any of the three model years 
immediately prior to or subsequent to the model years in question can 
be used to offset the penalty.
    Table III-1 shows CAFE fines paid by manufacturers in calendar year 
1998. In calendar year 1998, manufacturers paid civil penalties 
totaling $55,293,202 for failing to comply with the fuel economy 
standards of 27.5 mpg for passenger cars in MYs 1996 and 1997.

                          Table III-1.--Cafe Fines Collected During Calendar Year 1998
----------------------------------------------------------------------------------------------------------------
                 Model year                              Manufacturer              Amount fined      Date paid
----------------------------------------------------------------------------------------------------------------
1996.......................................  BMW................................        $289,840           11/98
                                             Fiat...............................         194,480           10/98
                                             Mercedes-Benz......................       6,825,610           11/98
                                             Porsche............................       2,127,600           11/98
                                             Land Rover.........................       4,329,850           11/98
                                             Volvo..............................       5,534,550           11/98
1997.......................................  BMW................................      11,834,910           11/98
                                             Fiat...............................         542,340           10/98
                                             Mercedes-Benz......................      11,731,035           11/98
                                             Porsche............................       2,525,820           11/98
                                             Land Rover.........................       4,195,032           11/98
                                             Volvo..............................       5,162,135           11/98
----------------------------------------------------------------------------------------------------------------

D. Contract Activities

     Database Maintenance: Products and Production Capabilities 
of North American Automobile Manufacturing Plants.
    This program was initiated to provide NHTSA with reliable 
information on industry product development and financing to assist in 
the analysis of fuel economy rulemaking activities. After calendar year 
1998, NHTSA will terminate its contract for the maintenance of the 
database. This is because of funding reductions. In FY 1999, NHTSA will 
compile and maintain some of this information in-house. The agency has 
requested funds in the FY 2000 budget to restore contract support for 
maintenance of the database.
     Technology Study of Fuel Economy Benefits of Continuously 
Variable Transmissions (CVTs).
    In fiscal year 1997, NHTSA initiated a study with a consultant to 
the Volpe National Transportation Systems Center to evaluate the fuel 
economy and emissions benefits and cost implications of continuously 
variable transmissions that may be feasible for vehicles larger than 
those vehicles that are currently employing this technology (e.g., mid-
size passenger cars and compact light trucks with an equivalent test 
weight of 3,625 pounds and a 3-liter engine). The study concluded that 
such an application would improve the vehicle fuel economy by 6 to 11 
percent with no increase in cost or weight over a conventional 4-speed 
automatic transmission with lockup torque converter. The NOX 
emissions, however, would be higher. The final report will be published 
in early 1999.

[FR Doc. 99-10562 Filed 4-28-99; 8:45 am]
BILLING CODE 4910-59-P