[Federal Register Volume 63, Number 91 (Tuesday, May 12, 1998)]
[Notices]
[Pages 26247-26248]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-12597]


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DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration
[Docket No. NHTSA-98-3812; Notice 1]


Bug Motors, Inc.; Receipt of Application for Temporary Exemption 
From Two Federal Motor Vehicle Safety Standards

    Bug Motors, Inc., which has its principal place of operations in 
Long Beach, California, (``Bug'') has applied for a temporary exemption 
of three years from two Federal motor vehicle safety standards 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 each of the standards.
    This notice of receipt of an application is published in accordance 
with the requirements of 49 U.S.C. 30113(b)(2) and does not represent 
any judgment of the agency on the merits of the application.
    In June 1997, California granted a year's license as a ``Vehicle 
Remanufacturer'' to Looking Glass Replicas of Long Beach, of which 
Kenneth Scheiler was the sole proprietor. Mr. Scheiler changed this 
business entity into ``Bug Motors, Inc.'' in December 1997, a 
corporation of which he is the sole shareholder and president. 
Therefore, Bug has not manufactured any vehicles in the 12-month period 
preceding the filing of its Application, nor can it file financial 
information for the three fiscal years called for by the regulation. 
Upon incorporation, its assets were stated as $224,600. Mr. Scheiler 
has been engaged in refurbishing used Volkswagen Beetles, and would now 
like to produce ``new and improved replicas'' of the car. Bug intends 
to buy certain vehicle components from Volkswagen-Mexico, import them 
into the United States, and assemble Volkswagen ``Beetles'' to be sold 
under the name ``the Bug.'' Specifically, Bug will buy and import new 
chasses, axles, and bodies including interior components. The Bug will 
be equipped with a refurbished 1973 engine and ``a rebuilt speedometer 
(converted from Kilometers to Miles). Under California law, the Bug 
will be titled as a ``1998 Remanufactured Vehicle,'' but is considered 
``used'' rather than ``new.'' NHTSA reviewed the intended modus 
operandi with the applicant's attorney and concurred with Bug's 
decision that, under these facts, the Bug should be treated under 
Federal law as a newly manufactured passenger car which is required to 
comply with all applicable Federal motor vehicle safety standards.
    In addition to the conventional Beetle two-door sedan, Bug will 
offer two convertible models. One is a sedan modified to have an 
electric-powered fabric roof that opens along the roof rails. The other 
is a fully convertible car with a manually-operated top, the familiar 
Beetle convertible. Bug's Application includes a list of the applicable 
Federal motor vehicle safety standards, indicating the compliance 
status of the Bug with respect to each. Representation is made that the 
Bug complies (e.g., Standard No. 104) or complies with a minor 
exception which will be modified in production (e.g., addition of a 
brake warning light, Standard No. 105). However, the Bug will not 
comply with Standard No. 208 and Standard No. 214.
    Specifically, under Standard No. 208, the Bug will be equipped with 
a three-point restraint system, but ``the warning system, including 
audio and visual aids'' will only ``be available within one year after 
production commences, and most likely within 6 months.'' Bug says that 
it ``has been working with vendors to adapt a Dual Inflatable Restraint 
System to the Bug,'' but it anticipates that an entire three-year 
period will be required for the system to be developed and implemented.
    With respect to Standard No. 214, Bug states that it ``has been 
attempting to identify vendors and parts for the installation of door 
beams for the Bug'' and that it ``is uncertain as to what, if any, 
engineering will have to be performed to document compliance.'' It 
hopes to achieve compliance within a three-year period.
    In support of its hardship argument, Bug informs NHTSA that it 
would be put out of business if the Application is not granted, as its 
subsidiary business of refurbishing Beetles is not sufficient to carry 
it alone. In addition, its national distributor would lose its entire 
investment in start-up costs, estimated to exceed $100,000.
    An exemption would be in the public interest as it will allow Bug 
to increase its workforce from seven to 35 people within a year, drawn 
from ``a significant number of minorities, including Hispanics, Asians, 
and African-Americans.'' The availability of the Bug

[[Page 26248]]

also ought to create jobs and sales for ``suppliers and sales people at 
auto dealerships. In addition, ``sale of these vehicles [ought to] 
generate retail sales taxes of approximately $1,162.50 per unit,'' and 
these revenues would be lost with the denial of the Application. An 
exemption would be consistent with the objectives of 49 U.S.C. Chapter 
301 as it would make available to the public a nostalgic vehicle that 
complies with all but two Federal motor vehicle safety standards.
    Interested persons are invited to submit comments on the 
application described above. 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. It 
is requested but not required that 10 copies be submitted.
    All comments received before the close of business on the comment 
closing date indicated below will be considered, and will be available 
for examination in the docket (from 10 a.m. to 5 p.m.) at the above 
address both before and after that date. Comments may also be viewed on 
the internet at web site dms.dot.gov. To the extent possible, comments 
filed after the closing date will also be considered. Notice of final 
action on the application will be published in the Federal Register 
pursuant to the authority indicated below.
    Comment closing date: June 11, 1998.

(49 U.S.C. 30113; delegations of authority at 49 CFR 1.50. and 501.8)

    Issued on May 6, 1998.
L. Robert Shelton,
Associate Administrator for Safety Performance Standards.
[FR Doc. 98-12597 Filed 5-11-98; 8:45 am]
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