5658 Federal Register / Vol. 69, No. 24 / Thursday, February 5, 2004 / Notices 

1See 68 FR 61035. To view the Lotus application, 

please go to the DOT Docket Management System 

at http://dms.dot.gov/ (Docket No. NHTSA–03–

16341).

2Exprit production was eventually extended by 

three years while petitioner sought to bring Elise 

into compliance with FMVSS. Esprit ceased 

production on 12/31/2003.

3We note that the Elise vehicle is FMVSS No. 201 

compliant.

4All dollar values are based on an exchange rate 

of £1 = $1.60.

5See Petition Exhibit 2 (Docket No. NHTSA–03–

16341–1).

agency is able to find that granting the 

petition would reduce U.S. employment 

related to automobile manufacturing, 

the agency has no discretion—it must 

grant the petition. If the agency takes no 

action within the time prescribed by the 

statute, the statute provides that the 

petition will be automatically granted. 

Accordingly, the granting of the petition 

would not be a ‘‘major Federal action’’

within the meaning of NEPA.

Since this proceeding will not result 

in the issuance of a ‘‘rule’’ within the 

meaning of the Administrative 

Procedure Act or Executive Order 

12866, neither the requirements of the 

Executive Order nor those of the 

Department’s regulatory procedures 

apply. Therefore, no regulatory analysis 

or evaluation was prepared for the 

proposal. For the same reasons, the 

requirements of the Regulatory 

Flexibility Act do not apply. 

As appropriate, the agency will 

conduct further analyses of these 

impacts, considering information 

submitted during the comment period, 

in conjunction with the final decision 

on this petition.

(Authority: 49 U.S.C. 32904, delegations of 

authority at 49 CFR 1.50 and 501.8.)

Issued on February 2, 2004. 

Stephen R. Kratzke, 

Associate Administrator for Rulemaking.

[FR Doc. 04–2462 Filed 2–2–04; 3:27 pm] 

BILLING CODE 4910–59–P

DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety 

Administration 

[Docket No. NHTSA–03–16341, Notice 2] 

Group Lotus Plc.; Grant of Application 

for a Temporary Exemption From 

Federal Motor Vehicle Safety Standard 

No. 108 and Part 581 Bumper Standard 

This notice grants the Group Lotus 

Plc. (‘‘Lotus’’) application of for a 

temporary exemption from Paragraph S7 

of Federal Motor Vehicle Safety 

Standard (‘‘FMVSS’’) No. 108, Lamps, 

reflective devices, and associated 

equipment; and Part 581 Bumper 

Standard. In accordance with 49 CFR 

Part 555, the basis for the grant is that 

compliance would cause substantial 

economic hardship to a manufacturer 

that has tried in good faith to comply 

with the standard. 

The National Highway Traffic Safety 

Administration (NHTSA) published a 

notice of receipt of the application on 

October 24, 2003, and afforded an 

opportunity for comment.1

I. Background 

Lotus, which was founded in 1955, 

produces small quantities of 

performance cars. In the past five years, 

Lotus has sold a total of 550 

automobiles in the United States. The 

only current Lotus vehicle sold in the 

Unites States is Lotus Esprit (‘‘Esprit’’). 

In the same time period, Lotus has 

manufactured a total of 18,888 vehicles 

worldwide, including Lotus Elise 

(‘‘Elise’’). 

The Elise was introduced in 1996, but 

it was not originally designed or 

intended for the U.S. market. However, 

after deciding to terminate production 

of the Esprit by 1999 2, petitioner sought 

to introduce the Elise in the United 

States. Significant management, 

ownership and financial hardship issues 

contributed to the delay in introducing 

the Elise model. Recently, Peruashan 

Otomobile Nasional Berhad (‘‘Proton’’) 

has taken a 100% ownership of Lotus. 

Petitioner is now ready to introduce the 

Elise vehicle into the U.S. Market. A 

description of the Elise vehicle is set 

forth in the Exhibit 1 of the petition 

(Docket No. NHTSA–03–16341–1). For 

additional information on the vehicle, 

please go to www.LotusCars.com.

II. Why Lotus Needs a Temporary 

Exemption 

Lotus has continued to experience 

substantial economic hardship, 

previously discussed by the agency in a 

March 3, 2003 Renewal of a Temporary 

Exemption from FMVSS No. 201 (68 FR 

10066).3 Lotus’ latest financial 

submissions showed an operating loss 

of £43,228,000 (≈ $69,000,000) for the 

fiscal year 2000; a loss £18,055,000 (≈

$29,000,000) for the fiscal year 2001; 

and a loss of £2,377,000 (≈ $4,000,000) 

for its fiscal year 2002. This represented 

a cumulative loss for a period of 3 years 

of £63,660,000 (≈ $102,000,000).4

According to the petitioner, the cost 

of making the Elise compliant with the 

headlighting requirements of FMVSS 

108 and the bumper standard was 

beyond the company’s current 

capabilities. Petitioner contended that 

developing and building FMVSScompliant headlamps and Part 581-

compliant bumpers cannot be done 

without redesigning the entire body 

structure of the Elise. Specifically, 

developing Part 581-compliant bumpers 

would cost $6 million dollars over a 

period of 2 years. Producing an actual 

FMVSS-compliant headlamp would cost 

approximately $1.1 million. In addition, 

there are unspecified costs of body 

modifications in order to accommodate 

the new headlamp, because there is 

insufficient space in the current body 

structure to permit an FMVSScompliant headlamp. 

Lotus requested a three-year 

exemption in order to concurrently 

develop compliant bumpers and 

headlamps and make necessary 

adjustments to the current body 

structure. Petitioner anticipates the 

funding necessary for these compliance 

efforts will come from immediate sales 

of Elise vehicles in the United States. 

III. Why Compliance Would Cause 

Substantial Economic Hardship and 

How Lotus Has Tried in Good Faith To 

Comply With Standard No. 108 and the 

Bumper Standard 

Petitioner contended that Lotus could 

not return to profitability unless it 

receives the temporary exemption. In 

support of their contention, Lotus 

prepared alternative forecasts for the 

next 3 fiscal years. The first forecast 

assumed that the petitioner receives 

exemptions from S7 of FMVSS No. 108 

and the bumper standard. The second 

forecast assumed the exemptions are 

denied.5 In the event of denial, Lotus 

anticipated extensive losses through the 

fiscal year 2006, because it could not 

bring the Elise into full compliance any 

earlier.

Fiscal year 

Forecast if exemptions 

granted

(in $) 

Forecast if exemptions 

denied

(in $) 

2003 ......................................................................................................................................... ≈$975,000 ≈¥$1,700,000

Federal Register / Vol. 69, No. 24 / Thursday, February 5, 2004 / Notices 5659

6 In the event the application was granted, Lotus 

anticipated hiring more employees and expanding 

its dealer network.

Fiscal year 

Forecast if exemptions 

granted

(in $) 

Forecast if exemptions 

denied

(in $) 

2004 ......................................................................................................................................... ≈$12,520,000 ≈¥$15,402,000

2005 ......................................................................................................................................... ≈$11,749,000 ≈¥$22,718,000

According to the petition, Lotus 

expended substantial resources 

(approximately $27,000,000) in the past 

12 months in order to bring Elise into 

compliance with the Federal Motor 

Vehicle Safety Standards and other U.S. 

regulations. Specifically, Lotus invested 

approximately $5,000,000 in order to 

obtain a suitable engine supplier 

capable of complying with U.S. 

emissions standards. Next, Lotus 

developed an FMVSS 208 compliant air 

bag system. Significant resources are 

currently being expended in order to 

bring Elise in compliance with all other 

Federal Motor Vehicle Safety Standards, 

including FMVSSs 208, 210, 212, 214, 

219 and 301. 

As previously discussed, the Elise 

was not designed for the U.S. market 

and does not have a conventional 

bumper system or the underlying 

bumper structure. Instead, it was 

designed with ‘‘clam shell’’ body parts. 

According to the petitioner, installing a 

compliant bumper system would 

require re-designing the entire body of 

the automobile. 

Petitioner considered equipping the 

Elise with an ‘‘interim headlamp’’ that 

would comply with FMVSS No. 108. 

This headlamp would not feature a 

polycarbonate cover currently on the 

vehicle, and would have been 

assembled from ‘‘off-the-shelf’’ parts. 

However, the development of this 

‘‘interim headlamp’’ would cost 

$500,000. Because Lotus anticipated 

introducing an all-new, fully compliant 

Elise in 2006, the projected number of 

vehicles sold until the introduction of 

the new 2006 model could not justify 

this investment. 

Petitioner contended that installation 

of ‘‘an interim headlamp’’ without a 

polycarbonate cover would also 

significantly decrease forecasted sales 

because aesthetic appearance of the 

automobile would be compromised. 

Lotus marketing research forecasted a 

sales decline of as much as 30%. 

Further, the absence of the 

polycarbonate cover would have a 

negative effect on vehicle aerodynamics, 

and would decrease fuel economy. 

Finally, Lotus indicated that installation 

of ‘‘interim headlamps’’ could result in 

U.S. customers purchasing aftermarket 

or ‘‘European-spec’’ headlamps and 

installing these headlamps on their 

vehicles. 

As previously stated, Lotus plans to 

introduce the second generation Elise in 

late 2006. This vehicle will feature 

compliant headlamps, bumpers and 

advanced air bags.

IV. Why an Exemption Would Be in the 

Public Interest and Consistent With the 

Objectives of Motor Vehicle Safety 

Petitioner put forth several arguments 

in favor of a finding that the requested 

exemption is consistent with the public 

interest and the objectives of the Safety 

Act. Specifically: 

1. Petitioner notes that the current 

Elise headlamp does not pose a safety 

risk because the headlamp’s 

photometrics are very close to the 

requirements of FMVSS 108. The 

headlamp has also been subjected to 

environmental testing, and has a good 

warranty record. 

2. Petitioner argues that the clamshell 

body system utilized by the Elise 

vehicle acts to reduce low-speed 

damage even in the absence of 

conventional bumpers. In a situation 

involving greater damage, the cost of an 

entire fiberglass clamshell is comparable 

to bumper-related repair costs of other 

‘‘high-end’’ vehicles. 

3. Petitioner suggests that denial of 

the petition would prevent Lotus from 

introducing the Elise for a period of 

three years and would in fact cause 

Lotus to cease U.S. operations. This 

would in turn result in loss of jobs by 

Lotus employees in the U.S.6

4. With respect to consumers, 

petitioner argues that denial of the 

petition would limit consumer choices 

by eliminating Lotus from the 

marketplace. Lotus contends that its 

continued presence in the U.S. is 

needed in order to provide parts and 

service for the existing Lotus Esprit 

customers. 

5. Lotus remarks that due to the 

nature of the Elise vehicle, it will, in all 

likelihood, be utilized infrequently, and 

then as a ‘‘second’’ or a recreational 

vehicle. 

6. Finally, Lotus notes that the Elise 

does comply with all other Federal 

Motor Vehicle Safety Standards, and 

features above-average fuel economy. 

V. Comments Received on Lotus 

Application 

The agency received a single 

comment in response to the notice of 

the application. The sole commenter 

was Mr. Alan Riley, the executive editor 

of Roadfly, an on-line automotive 

enthusiast community. Mr. Riley is in 

favor of granting the exemption. In 

support of his position, Mr. Riley 

indicated that the exemption would 

enable Lotus to maintain a continued 

presence in the U.S., which is important 

not only to potential Elise purchasers, 

but also to those individuals who 

already own Lotus vehicles and seek to 

properly maintain them. 

VI. The Agency’s Findings 

The Lotus application for a temporary 

exemption clearly demonstrates the 

financial difficulties experienced by the 

company, with cumulative losses in the 

past three years exceeding 

$100,000,000. Further, the application 

indicates that Lotus has made a good 

faith effort and spent approximately 

$27,000,000 to bring Elise into 

compliance with federal safety 

standards. 

Traditionally, the agency has found 

that the public interest is served in 

affording continued employment to a 

small volume manufacturer’s work 

force. The agency has also found that 

the public interest is served by affording 

the consumers a wider variety of motor 

vehicles. In this instance, denial of the 

petition would most likely put Lotus out 

of business in the U.S. Further, an 

exemption would assure an adequate 

supply of spare parts and afford a 

continuing, uninterrupted commercial 

relationship with Lotus dealers and 

their employees in the United States. 

The term of this exemption will be 

limited to three years and the agency 

anticipates that the Elise vehicle will be 

sold in limited quantities. With the help 

of revenues derived from U.S. sales, 

Lotus will introduce an all new, fully 

compliant vehicle that will replace the 

current Elise by 2006. 

Because Lotus will be manufactured 

in limited quantities and because each 

vehicle is likely to be operated only on 

a limited basis, the agency finds that 

this exemption will likely have a 

negligible impact on the overall safety of 

U.S. highways. The agency notes that 

the vehicle subject to this petition 

5660 Federal Register / Vol. 69, No. 24 / Thursday, February 5, 2004 / Notices 

complies with all other applicable 

Federal motor vehicle safety standards. 

In consideration of the foregoing, it is 

hereby found that compliance with the 

requirements of Paragraph S.7 of 49 CFR 

571.208, Lamps, reflective devices, and 

associated equipment; and 49 CFR part 

581 Bumper Standard would cause 

substantial economic hardship to a 

manufacturer that has tried in good faith 

to comply with the standard. It is 

further found that the granting of an 

exemption would be in the public 

interest and consistent with the 

objectives of traffic safety. 

In accordance with 49 U.S.C. 

30113(b)(3)(B)(i), Lotus is granted 

NHTSA Temporary Exemption No. EX 

03–4, from Paragraph S.7 of 49 CFR 

571.208, Lamps, reflective devices, and 

associated equipment; and 49 CFR part 

581 Bumper Standard. The exemption 

shall remain in effect until January 1, 

2007.

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

49 CFR 1.50 and 501.8)

FOR FURTHER INFORMATION CONTACT:

George Feygin in the Office of Chief 

Counsel, NCC–112, (Phone: 202–366–

2992; Fax 202–366–3820; e-Mail: 

George.Feygin@nhtsa.dot.gov).

Issued on: February 2, 2004. 

Jeffrey W. Runge, 

Administrator.

[FR Doc. 04–2517 Filed 2–4–04; 8:45 am] 

BILLING CODE 4910–59–P

DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety 

Administration 

[Docket No. NHTSA–2004–16996] 

Results of the Survey on the Use of 

Passenger Air Bag On-Off Switches; 

Technical Report

AGENCY: National Highway Traffic 

Safety Administration (NHTSA), 

Department of Transportation.

ACTION: Request for comments on 

technical report. 

SUMMARY: This notice announces 

NHTSA’s publication of a technical 

report describing the use of passenger 

air bag on-off switches in pickup trucks. 

The report’s title is Results of the 

Survey on the Use of Passenger Air Bag 

On-Off Switches.

DATES: Comments must be received no 

later than June 4, 2004.

ADDRESSES: Report: The report is 

available on the Internet for viewing on 

line in HTML format at http://

www.nhtsa.dot.gov/cars/rules/regrev/

Evaluate/AirBagOnOffSurvey/

index.html and in PDF format at

http://www.nhtsa.dot.gov/cars/rules/

regrev/Evaluate/AirBagOnOffSurvey/

images/809 689.pdf. You may also 

obtain a copy of the report free of charge 

by sending a self-addressed mailing 

label to Christina Morgan (NPO–321), 

National Highway Traffic Safety 

Administration, 400 Seventh Street, 

SW., Washington, DC 20590. 

Comments: You may submit 

comments [identified by DOT DMS 

Docket Number NHTSA–2004–16996] 

by any of the following methods: 

• Web site: http://dms.dot.gov.

Follow the instructions for submitting 

comments on the DOT electronic docket 

site. 

• Fax: 1–202–493–2251. 

• Mail: Docket Management Facility; 

U.S. Department of Transportation, 400 

Seventh Street, SW., Nassif Building, 

Room PL–401, Washington, DC 20590–

001. 

• Hand Delivery: Room PL–401 on 

the plaza level of the Nassif Building, 

400 Seventh Street, SW., Washington, 

DC, between 9 a.m. and 5 p.m., Monday 

through Friday, except Federal 

Holidays. 

• Federal eRulemaking Portal: Go to 

http://www.regulations.gov. Follow the 

online instructions for submitting 

comments. 

You may call Docket Management at 

202–366–9324 and visit the Docket from 

10 a.m. to 5 p.m., Monday through 

Friday.

FOR FURTHER INFORMATION CONTACT:

Christina Morgan, Evaluation Division, 

NPO–321, Office of Planning, 

Evaluation and Budget, National 

Highway Traffic Safety Administration, 

Room 5208, 400 Seventh Street, SW., 

Washington, DC 20590. Telephone: 

202–366–2562. Fax: 202–366–2559. Email: tmorgan@nhtsa.dot.gov.

For information about NHTSA’s 

evaluations of the effectiveness of 

existing regulations and programs: Visit 

the NHTSA Web site at http://

www.nhtsa.dot.gov and click 

‘‘Regulations & Standards’’ underneath 

‘‘Car Safety’’ on the home page; then 

click ‘‘Regulatory Evaluation’’ on the 

‘‘Regulations & Standards’’ page.

SUPPLEMENTARY INFORMATION: The 

technical report includes the results of 

a survey conducted by NHTSA to 

investigate how pickup truck drivers are 

using the passenger air bag on-off 

switches. On-off switches have been 

standard equipment in most pickup 

trucks since 1998. They enable a driver 

to turn off the air bag and prevent harm 

to a child passenger, but turn it on to 

protect an adult passenger. How often 

were the switches turned off for child 

passengers and how often were they 

turned on for adult passengers? The 

survey was conducted from July to 

November 2000 in four States—

California, Georgia, Michigan, and 

Texas.

On the whole, the switches have been 

a necessary and a fairly successful 

interim measure that made it possible to 

offer life-saving air bags to adult 

passengers in pickup trucks without 

back seats, while allowing the 

opportunity to protect infants and 

children from the hazards of air bags 

when they must ride in the front seats 

of those vehicles. Nevertheless, the 

survey shows many of the air bags are 

being left on for children and turned off 

for adults. Drivers with children in rearfacing child safety seats achieved the 

highest rate of correct use of the air bag 

switch—86 percent. Forty-eight percent 

of the air bags were left on when only 

child passengers 1–12 years old were in 

the front seat, potentially exposing these 

children to a deployment. There is also 

a problem when drivers ride with only 

adult passengers (age 13 and older). 

While 83 percent of the switches were 

on, as they should be, 17 percent were 

switched off. 

How Can I Influence NHTSA’s 

Thinking on This Subject? 

NHTSA welcomes public review of 

the technical report and invites 

reviewers to submit comments about the 

data and the statistical methods used in 

the analyses. NHTSA will submit to the 

Docket a response to the comments and, 

if appropriate, additional analyses that 

supplement or revise the technical 

report. 

How Do I Prepare and Submit 

Comments? 

Your comments must be written and 

in English. To ensure that your 

comments are correctly filed in the 

Docket, please include the Docket 

number of this document (NHTSA–

2004–16996) in your comments. 

Your primary comments must not be 

more than 15 pages long (49 CFR 

553.21). However, you may attach 

additional documents to your primary 

comments. There is no limit on the 

length of the attachments. 

Please send two paper copies of your 

comments to Docket Management, 

submit them electronically, fax them, or 

use the Federal eRulemaking Portal. The 

mailing address is U.S. Department of 

Transportation Docket Management, 

Room PL–401, 400 Seventh Street, SW., 

Washington, DC 20590. If you submit 

your comments electronically, log onto 

the Dockets Management System Web 

site at http://dms.dot.gov and click on