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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 Volkswagen Group of America (Volkswagen) petition for an exemption of the new vehicle line [confidential nameplate] in accordance with 49 CFR part 543,                         *Exemption from the Theft Prevention Standard.*                         This petition is                               ( print page 29813)                            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). Volkswagen requested confidential treatment for the information it submitted in support of its petition until the market introduction of its new MY 2010 vehicle line (expected to be not later than December 2011). The agency addressed Volkswagen's request for confidential treatment by letter dated April 30, 2010.                    

# DATES:

The exemption granted by this notice is effective beginning with the 2012 model year.

# FOR FURTHER INFORMATION CONTACT:

Ms. Carlita Ballard, Office of International Policy, Fuel Economy and Consumer Programs, NHTSA, 1200 New Jersey Avenue, SE., West Building, W43-439, Washington, DC 20590. Ms. Ballard's phone number is (202) 366-0846. Her fax number is (202) 493-2990.

# SUPPLEMENTARY INFORMATION:

                    In a petition dated March 8, 2010, Volkswagen requested an exemption from the parts-marking requirements of the Theft Prevention Standard (49 CFR part 541) for the new MY 2012 vehicle line. The petition requested an exemption from parts marking 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 an exemption for one vehicle line per model year. In its petition, Volkswagen provided a detailed description and diagram of the identity, design, and location of the components of the antitheft device for its new vehicle line. Volkswagen will install its fourth generation, transponder-based electronic engine immobilizer antitheft device as standard equipment on its new vehicle line beginning with MY 2012. Volkswagen stated that the aim of its immobilizer device is to actively incorporate the engine control unit into the evaluation and monitoring process. Key components of the antitheft device will include a passive immobilizer, a warning message indicator, an adapted ignition key, an ignition lock reading coil, an engine control unit and an immobilizer control unit. The antitheft device will also include an audible and visible alarm feature as optional equipment. Volkswagen'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.

Volkswagen stated that it will also offer an optional advanced key (“keyless”) device with its new vehicle line. Volkswagen stated that with the “keyless” device, a transmitter in the key fob communicates with the vehicle ignition control system to perform immobilizer and engine start and stop functions without the need to insert a physical key into the mechanical ignition switch device. Volkswagen further stated that the immobilizer function is the same with both the standard key and the keyless device.

Volkswagen stated that activation of the standard key device occurs automatically when the transponder key is removed from the ignition switch or when the key fob is taken outside the vehicle in the optional advanced key device. Deactivation of the standard key device occurs when the key is inserted, the ignition is turned on and the transponder key is recognized by the immobilizer control unit, enabling start up of the vehicle. After recognition by the electronic module of the key transponder, the key is paired up with the immobilizer control module and cannot be used for any other immobilizer. Deactivation of the optional advanced key device occurs when the key fob transponder is inside the vehicle and is recognized by the immobilizer control unit.

In addressing the specific content requirements of 543.6, Volkswagen provided information on the reliability and durability of its proposed device. To ensure reliability and durability of the device, Volkswagen stated that the antitheft device will be tested for compliance to its corporate requirements for electrical and electronic assemblies in motor vehicles related to performance.

Volkswagen stated that it believes the immobilizer device in the new vehicle line will be effective in deterring theft as it has been in other Volkswagen vehicle lines for which theft data has been published. Volkswagen provided comparative data in support of its belief that its device will be as effective in deterring and reducing vehicle theft as those vehicle lines for which the theft data was published. Volkswagen stated that its proposed device is similar to the antitheft device installed on the MY 2011 Tiguan vehicle line which was granted an exemption by the agency on December 1, 2009. Volkswagen further stated that its device is also installed on its current Eos, Passat, Golf, Jetta and Touareg vehicle lines. Volkswagen provided data showing that from MY's 2005-2007, theft rates published by the agency for the Jetta, Passat, Eos, and Golf/GTI vehicles installed with the immobilizer device are all below the median theft rate. Specifically, the Jetta, Passat and Golf/GTI vehicle lines have an average theft rate using three MYs' data of 1.3058, 1.0853 and 1.4656 respectively. The Eos vehicle line using one MY's data has a theft rate of 0.8205.

In support of its belief that its antitheft device will be as or more effective in reducing and deterring vehicle theft than the parts-marking requirement, Volkswagen referenced the effectiveness of immobilizer devices installed on other vehicles for which NHTSA has granted exemptions. Specifically, Volkswagen referenced information from the Highway Loss Data Institute which showed that BMW vehicles experienced theft loss reductions resulting in a 73% decrease in relative claim frequency and a 78% lower average loss payment per claim for vehicles equipped with an immobilizer. Volkswagen also stated that Chrysler reported that the average theft rate for the Jeep Grand Cherokee between MYs' 1995 and 1998 (prior to addition of an immobilizer) was significantly reduced from 5.3574 to 2.5492 from MYs' 1995 to 2005 after addition of an immobilizer. Comparatively, Volkswagen stated that Mercedes-Benz reported that the theft rate for the SLK class vehicles dropped from 1.6489 in CY 2005 to 0.1484 in CY 2006 after installation of an immobilizer.

Based on the supporting evidence submitted by Volkswagen on the device, the agency believes that the antitheft device for the new 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). 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.

                    Pursuant to 49 U.S.C. 33106 and 49 CFR 543.7(b), the agency grants a petition for exemption from the parts-marking requirements of part 541 either in whole or in part, if it determines that, based upon substantial evidence, the standard equipment antitheft device is likely to be as effective in reducing and deterring motor vehicle theft as compliance with the parts-marking                           ( print page 29814)                        requirements of part 541. The agency finds that Volkswagen has provided adequate reasons for its belief that the antitheft device for the Volkswagen new 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). This conclusion is based on the information Volkswagen provided about its device.                

For the foregoing reasons, the agency hereby grants in full Volkswagen's petition for exemption for the Volkswagen new vehicle line from the parts-marking requirements of 49 CFR part 541, beginning with the 2012 model year vehicles. 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 Volkswagen 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 according to the requirements under 49 CFR 541.5 and 541.6 (marking of major component parts and replacement parts).

NHTSA notes that if Volkswagen 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. § 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 § 543.9(c)(2) could place on exempted vehicle manufacturers and itself. The agency did not intend in drafting 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: May 24, 2010.

Stephen R. Kratzke,

Associate Administrator for Rulemaking.

[FR Doc. 2010-12809 Filed 5-26-10; 8:45 am]

BILLING CODE 4910-59-P