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###### Department of Transportation

###### National Highway Traffic Safety Administration

# AGENCY:

National Highway Traffic Safety Administration (NHTSA) Department of Transportation (DOT).

# ACTION:

Grant of petition for exemption.

# SUMMARY:

                        This document grants in full the BMW of North America, LLC (BMW) petition for exemption of the Carline 1 vehicle line in accordance with 49 CFR part 543,                         *Exemption from the Theft Prevention Standard*. This petition is granted because the agency has determined that the antitheft device to be placed on the line as standard equipment is likely to be as effective in reducing and deterring motor vehicle theft as compliance with the parts-marking requirements of the Theft Prevention Standard (49 CFR Part 541).                    

# DATES:

The exemption granted by this notice is effective beginning with the 2008 model year (MY).

# FOR FURTHER INFORMATION CONTACT:

Ms. Deborah Mazyck, Office of International Policy, Fuel Economy and Consumer Programs, National Highway Traffic Safety Administration, 1200 New Jersey Avenue, SE., West Building, Room W43-443, Washington, DC 20590. Ms. Mazyck's telephone number is (202) 366-4139. Her fax number is (202) 493-2290.

# SUPPLEMENTARY INFORMATION:

                    In a petition dated June 22, 2007, BMW requested exemption from the parts-making requirements of the theft prevention standard (49 CFR part 541) for the MY 2008 BMW Carline 1 vehicle line. The petition requested exemption from parts-making pursuant to 49 CFR part 543,                     *Exemption from Vehicle Theft Prevention Standard*, based on the installation of an antitheft device as standard equipment for an entire vehicle line.                

                    Under § 543.5(a), a manufacturer may petition NHTSA to grant exemptions for one line of its vehicle lines per year. BMW has petitioned the agency to grant an exemption for its Carline 1 vehicle line beginning with MY 2008. In its petition, BMW provided a detailed description and diagram of the identity,                           ( print page 52429)                        design, and location of the components of the antitheft device for its Carline 1 vehicle line. BMW will install its passive antitheft device as standard equipment on the line. Features of the antitheft device will include a key with a transponder, loop antenna (coil) around the steering lock cylinder, an electronically-coded vehicle immobilizer (EWS) control unit and passive immobilizer. BMW's submission is considered a complete petition as required by 49 CFR 543.7, in that it meets the general requirements contained in § 543.5 and the specific content requirements of § 543.6.                

BMW stated that the EWS immobilizer device prevents the vehicle from being driven away under its own engine power. The EWS control unit provides the interface to the loop antenna (coil), engine control unit and starter. It queries key data from the transponder and provides the coded release of the engine management for a valid key. The ignition and fuel supply are only released when a correct coded release signal has been sent by the EWS control unit, to allow the vehicle to start. The immobilizer device is automatically activated when the engine is shut off and the vehicle key is removed from the ignition lock cylinder. The antitheft device can be further secured by locking the vehicle doors and hood using either the key lock cylinder on the driver's door or the remote frequency remote control. The frequency for the remote control constantly changes to prevent an unauthorized person from opening the vehicle by intercepting the signals of its remote control. The vehicle is also equipped with a central-locking system that can be operated to lock and unlock all doors or to unlock only the driver's door, preventing forced entry into the vehicle through the passenger doors.

BMW stated that the proposed antitheft device does not provide any visible or audible indication of unauthorized entry. Theft data have indicated a decline in theft rates for vehicle lines that have been equipped with antitheft devices similar to that which BMW proposes to install on the Carline 1 line. The agency has concluded that the lack of a visual or audio alarm has not prevented these devices from being effective protection against theft.

The effectiveness of BMW's EWS is compared with devices which NHTSA has previously determined to be as effective in reducing and deterring motor vehicle theft as would compliance with the parts-marking requirements of Part 541. The antitheft device that VMW intends to install on its Carline 1 vehicle line for MY 2008 is the same system that BMW installed on its BMW X3 vehicle line, X5, Carline 4, Carline 5, Carline 6, Carline 7, Carline Z4, and the MINI vehicle line. To further substantiate its device's effectiveness, BMW also submitted the April 1997 Highway Loss Data Institute's (HLDI) Bulletin on the preliminary results of antitheft devices in 1995 BMW models. BMW stated that the data demonstrates the performance of the BMW antitheft device when it was introduced in the 5 series vehicle line and is indicative of the performance it expects from any BMW antitheft device. The report compared BMWs equipped with an advanced passive antitheft devices installed in 1995 BMW models (i.e., passive activation with an electronic chip in the ignition key that must match the vehicle electronics) beginning with the January 1, 1995 production to the vehicle produced earlier in the model year that were equipped with less advanced antitheft technology (i.e., required arming the device by a special locking routine and had no electronic-key feature). According to BMW, HLDI reported significant decreases were found in both claim frequencies and average loss payment per claim for the BMW cars equipped with the new antitheft device. Specifically, HLDI's Bulletin showed a 73% decrease in relative claim frequency for BMW vehicle lines equipped with the new antitheft device as compared to the older device and a 78% decrease in relative average loss payment per claim when the vehicle line became equipped with the new device. Additionally, the agency notes that the most currently available theft data for BMW vehicle lines for which the agency has granted parts marking exemptions show that theft rates for these lines are all below the median (3.5826) and have remained so for the past three years. BMW has concluded that the antitheft device proposed for the Carline 1 vehicle line is no less effective than those devices and similar for which NHTSA has already been granted exemptions from the parts-marking requirements.

In addressing the specific content requirements of 543.6, BMW provided information on the reliability and durability of its device. To ensure reliability and durability of the device BMW conducted tests based on its own specified standards and believes that the device is reliable and durable since the device complied with its specified requirements for each test. BMW provided a detailed list of the tests conducted. BMW also stated that because the EWS immobilizer device is incorporated into the ignition, fuel injection, and starter circuit of the vehicle and is activated passively, reliability and durability of the system have to be ensured because the vehicle will not start if the EWS system malfunctions. BMW further stated that, if a malfunction should occur, the EWS device incorporates a microprocessor that can be accessed by using BMW diagnostic equipment to diagnose and correct the cause of the problem.

Additionally, the mechanical keys are unique.  A special key blank, a special key cutting machine and the car's unique code are needed to duplicate a key.  BMW stated that new keys will only be issued to authorized persons.

Based on the evidence submitted by BMW, the agency believes that the antitheft device for the BMW Carline 1 vehicle line is likely to be as effective in reducing and deterring motor vehicle theft as compliance with the parts-marking requirements of the Theft Prevention Standard (49 CFR part 541).

Based on the information BMW has provided about its device, the agency concludes that the device will provide four of the five types of performance listed in § 543.6(a)(3): Promoting activation; preventing defeat or circumvention of the device by unauthorized persons; preventing operation of the vehicle by unauthorized entrants; and ensuring the reliability and durability of the device.

As required by 49 U.S.C. 33106 and 49 CFR part 543.6(a)(4) and (5), the agency finds that BMW has provided adequate reasons for its belief that the antitheft device will reduce and deter theft.

For the foregoing reasons, the agency hereby grants in full BMW's petition for exemption for the Carline 1 vehicle line from the parts-marking requirements of 49 CFR part 541.  The agency notes that 49 CFR part 541, Appendix A-1, identifies those lines that are exempted from the Theft Prevention Standard for a given model year.  49 CFR part 543.7(f) contains publication requirements incident to the disposition of all Part 543 petitions.  Advanced listing, including the release of future product nameplates, the beginning model year for which the petition is granted and a general description of the antitheft device is necessary in order to notify law enforcement agencies of new vehicle lines exempted from the parts-marking requirements of the Theft Prevention Standard.

                    If BMW decides not to use the exemption for this line, it must formally notify the agency.  If such a decision is made, the line must be fully marked as                           ( print page 52430)                        required by 49 CFR parts 541.5 and 541.6 (marking of major component parts and replacement parts).                

NHTS notes that if BMW wishes in the future to modify the device on which this exemption is based, the company may have to submit a petition to modify the exemption.  Part 543.7(d) states that a Part 543 exemption applies only to vehicles that belong to a line exempted under this part and equipped with the anti-theft device on which the line's exemption is based.  Further, § 543.9(c)(2) provides for the submission of petitions “to modify an exemption to permit the use of an antitheft device similar to but differing from the one specified in that exemption.”

                    The agency wishes to minimize the administrative burden that Part 543.9(c)(2) could place on exempted vehicle manufacturers and itself.  The agency did not intend Part 543 to require the submission of a modification petition for every change to the components or design of an antitheft device.  The significance of many such changes could be                     *de minimis.*                     Therefore, NHTSA suggests that if the manufacturer contemplates making any changes the effects of which might be characterized as                     *de minimis,*                     it should consult the agency before preparing and submitting a petition to modify.                

Authority:49 U.S.C. 33106; delegation of authority at 49 CFR 1.50.

Issued on: September 7, 2007.

Stephen R. Kratzke,

Associate Administrator for Rulemaking.

[FR Doc. 07-4501 Filed 9-12-07; 8:45 am]

BILLING CODE 4910-59-M