[Federal Register Volume 64, Number 163 (Tuesday, August 24, 1999)]
[Notices]
[Pages 46225-46226]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-21929]
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DEPARTMENT OF TRANSPORTATION
National Highway Traffic Safety Administration
[Docket No. NHTSA-99-6092; Notice 1]
Lotus Cars Ltd.; Receipt of Application for Temporary Exemption
From Federal Motor Vehicle Safety Standard No. 201
Lotus Cars Ltd. (``Lotus'') of Norwich, England, through Lotus Cars
USA, Inc., has applied for a temporary exemption from S7, Performance
Criterion, of Federal Motor Vehicle Safety Standard No. 201 Occupant
Protection in Interior Impact, as described below. The basis of the
application is that compliance would cause substantial economic
hardship to a manufacturer that has tried in good faith to comply with
the standard.
We are publishing this notice of receipt of the application in
accordance with the requirements of 49 U.S.C. 30113(b)(2), and have
made no judgment on the merits of the application.
The material below is taken from Lotus's application
Why Lotus Needs a Temporary Exemption
In August 1995, when S7, the new head injury criteria portion of
Standard No. 201, was promulgated, Lotus was owned by the Italian
owners of Bugatti, a company then in bankruptcy. That year, Lotus was
able to produce only 835 cars, selling 152, or 18.2%, in the United
States.
[[Page 46226]]
This country was the primary market for the Lotus Esprit, which, by
then, was an aging design. With the limited resources that it had and
the uncertainties of the future, in 1996 Lotus made the decision to
invest primarily in an all-new model, the Elise, and to modernize the
Esprit, rather than to replace it with an all-new design. Developed on
a small budget, the Elise was not designed or intended for the American
market. The Esprit was fitted with a new V8 engine meeting current U.S.
emissions standards.
At the end of 1996, Lotus was sold to its current owners, a group
of Malaysian investors, who reviewed the company's fortunes. The Elise
was becoming successful in its markets, while losses in the United
States in the previous two years approached $2,000,000, primarily due
to the declining appeal of the Esprit. The company's overall sales in
1996 had declined to 751, including sales of 67 Esprits in the U.S.
(8.9% of total sales). Nevertheless, the new owners decided to continue
in the U.S. market. Sales were marginally better in the U.S. in 1997,
72 Esprits, and vastly improved elsewhere with the great success of the
Elise. Lotus sold 2414 cars in 1997 (with the U.S. sales representing
only 3% of total sales, approximately the same as in 1998). However, it
lost almost 2,000,000 Pounds in its 1996/7 fiscal year.
In early 1997, Lotus decided to terminate production of the Esprit
on September 1,1999, and to homologate the Elise for the American
market beginning in 2000. This decision allowed it to choose the option
for compliance with S7 provided by S6.1.3, Phase-in Schedule #3, of
Standard No. 201, to forego compliance with new protective criteria for
the period September 1, 1998-September 1, 1999, and to conform 100% of
its production thereafter.
But, in addition to the new owners of Lotus, the new year saw the
appointment of new CEOs of Lotus and Lotus Cars USA, with the result
that a fresh look was taken at the direction of the company, and the
plans of early 1997 were abandoned. In due course, new management
decided to continue the Esprit in production beyond September 1, 1999,
until September 1, 2002, while developing an all-new Esprit, and to
remain in the American market without interruption. However, as
described below, the company found itself unable to conform the current
Esprit to Standard No. 201. In the meantime, the company had turned the
corner with the success of the Elise, and had a net profit for its
fiscal year 1997/8 of slightly more than 1,000,000 Pounds.
Why Compliance Would Cause Substantial Economic Hardship and How
Lotus Has Tried in Good Faith To Comply With Standard No. 201
When Lotus decided to continue production of the Esprit, it re-
engineered the car's front header rail and installed energy-absorbing
material. After these modifications, the Esprit's HIC value was reduced
from an already-complying 840 to 300.
However, the side rail was not so simple. The small Esprit cockpit
precluded any padding from being added at that location, without
compromising ingress/egress and visibility. In order to comply with
Standard No. 201, the Esprit ``greenhouse'' would have to be
substantially modified. Modification costs could not be recovered for
the relatively few cars that would be involved in the 1999-2002 period
without raising the retail price to an unacceptable level. Further,
Lotus was encountering major problems sourcing design-specific energy
absorbing materials without being compelled to buy a 10-year supply; it
was therefore forced to consider materials being produced for high-
volume users, with attendant problems.
As redevelopment plans progressed in 1998, Lotus determined that a
redesign of the ``greenhouse'' for the 1999-2002 period would cost in
excess of $950,000, and require retesting to confirm continued
compliance of its airbag system with Standard No. 208. But the company
did not have the personnel to deploy to both the redesigned and new
Esprit projects, and it has chosen to devote its human resources to the
all-new Esprit.
The Elise continues to contribute to the company's newly found
financial solidarity, and its cumulative net income for the past three
fiscal years is 2,466,000 Pounds, or, $4,068,900 (at an exchange rate
of 1.65 to 1). Although a denial of the petition would substantially
reduce Lotus's net income but not result in a net loss, the decrease
would come primarily at the expense of Lotus Cars USA which Lotus
believes could not remain in existence without cars to sell during the
period required to develop the new Esprit. Lotus estimates that it
would sell 200 Esprits in the U.S. during the period of a 3-year
exemption.
Why an Exemption Would be in the Public Interest and Consistent
With the Objectives of Motor Vehicle Safety
After 10 years of sales of the Esprit with its current body shape,
Lotus knows of no head injuries suffered by occupants contacting the
upper interior of the cockpit. The number of vehicles anticipated to be
sold during the exemption period is insignificant in terms of the
number of vehicles already on the roads. The Esprit will be in full
compliance by the same date that the phase-in ends for all
manufacturers and when there will be 100% compliance across the board,
September 1, 2002.
If Lotus USA is required to close because of a denial, its 10
employees will be out of work. In addition, a denial is bound to affect
Lotus dealers in unknown ways. An exemption would be consistent with
the public policy of affording consumers a wide choice of motor
vehicles.
How You May Comment on Lotus's Application
We invite you to submit comments on the application described
above. Your comments should refer to the docket number and the notice
number, and be submitted to: Central Docket Management Facility, room
Pl-401, 400 Seventh Street, SW, Washington, DC 20590. We ask, but do
not require, that you submit your comments in duplicate. We shall
consider all comments received before the close of business on the
comment closing date indicated below. You may examine comments in the
docket (from 10 a.m. to 5 p.m.) at the above address both before and
after that date. You may also view them on the internet at web site
dms.dot.gov. To the extent possible, we shall also consider comments
filed after the closing date. We shall publish a notice of final action
on the application in the Federal Register pursuant to the authority
indicated below. Comment closing date: September 23, 1999.
(49 U.S.C. 30113; delegations of authority at 49 CFR 1.50. and
501.8)
Issued on: August 13, 1999.
L. Robert Shelton,
Associate Administrator for Safety Performance Standards.
[FR Doc. 99-21929 Filed 8-23-99; 8:45 am]
BILLING CODE 4910-59-P