Document ID: NHTSA-2011-0006-0001
Agency: nhtsa
Document Type: Rule
Title: Applications for Renewals of Temporary Exemptions from the Advanced Air Bag Requirements: Koenigsegg Automotive AB; Morgan Motor Co. Ltd.
Posted Date: 2011-04-11T04:00Z

[Federal Register Volume 76, Number 69 (Monday, April 11, 2011)]
[Notices]
[Pages 20082-20087]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-8468]

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DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

[Docket No. NHTSA-2011-0006]

Koenigsegg Automotive AB; Morgan Motor Company Limited; Receipt 
of Applications for Renewals of Temporary Exemptions From the Advanced 
Air Bag Requirements of FMVSS No. 208

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

ACTION: Notice of receipt of applications for renewals of temporary 
exemptions and request for comments.

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SUMMARY: In accordance with the procedures in 49 CFR Part 555, 
Koenigsegg Automotive AB Koenigsegg'') and Morgan Motor Company Limited 
(``Morgan'') have petitioned the agency for renewals of temporary 
exemption from advanced air bag requirements of FMVSS No. 208, 
``Occupant crash protection.''The basis for each application is that 
compliance would cause substantial economic hardship to a manufacturer 
that has tried in good faith to comply with the standard.
    This notice of receipt of applications for renewal of temporary 
exemptions is published in accordance with the statutory provisions of 
49 U.S.C. 30113(b)(2). Please note that we are publishing together the 
notice of receipt of the two applications for renewal to ensure 
efficient use of agency resources and to facilitate processing of the 
applications. NHTSA has made no judgments on the merits of each 
application. NHTSA will consider each application separately. We ask 
that commenters also consider each application separately and submit 
comments specific to individual applications.

DATES: Comments must be received on or before May 11, 2011.

ADDRESSES: You may submit comments to the docket number identified in 
the heading of this document by any of the following methods:
     Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the online instructions for submitting 
comments.
     Mail: Docket Management Facility, M-30, U.S. Department of 
Transportation, West Building, Ground Floor, Rm. W12-140, 1200 New 
Jersey Avenue, SE., Washington, DC 20590.
     Hand Delivery or Courier: West Building Ground Floor, Room 
W12-140, 1200 New Jersey Avenue, SE., between 9 a.m. and 5 p.m. Eastern 
Time, Monday through Friday, except Federal holidays.
     Fax: (202) 493-2251.
    Regardless of how you submit your comments, you should mention the 
docket number of this document.
    You may call the Docket at 202-366-9324.
    Instructions: For detailed instructions on submitting comments and 
additional information on the rulemaking process, see the Public 
Participation heading of the Supplementary Information section of this 
document. Note that all comments received will be posted without change 
to http://www.regulations.gov, including any personal information 
provided. Please see the Privacy Act discussion below.
    Privacy Act: Anyone is able to search the electronic form of all 
comments received into any of our dockets by the name of the individual 
submitting the comment (or signing the comment, if submitted on behalf 
of an association, business, labor union, etc.). You may review DOT's 
complete Privacy Act Statement in the Federal Register published on 
April 11, 2000 (65 FR 19477-78).
    We shall consider all comments received before the close of 
business on the comment closing date indicated below. To the extent 
possible, we shall also consider comments filed after the closing date.

FOR FURTHER INFORMATION CONTACT: Ms. Dorothy Nakama, Office of the 
Chief Counsel, NCC-112, National Highway Traffic Safety Administration, 
1200 New Jersey Ave., SE., Washington, DC 20590. Telephone: (202) 366-
2992; Fax: (202) 366-3820.

I. Advanced Air Bag Requirements and Small Volume Manufacturers

    In 2000, NHTSA upgraded the requirements for air bags in passenger 
cars and light trucks, requiring what are commonly known as ``advanced 
air bags.'' \1\ The upgrade was designed to meet the goals of improving 
protection for occupants of all sizes, belted and unbelted, in 
moderate-to-high-speed crashes, and of minimizing the risks posed by 
air bags to infants, children, and other occupants, especially in low-
speed crashes. The rule accomplished this by establishing new test 
requirements and injury criteria and specifying the use of an entire 
family of test dummies: the then-existing dummy representing 50th 
percentile adult males, and new dummies representing 5th percentile 
adult females, 6-year-old children, 3-year-old children, and 1-year-old 
infants.
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    \1\ See 65 FR 30680 (May 12, 2000) (Docket No. NHTSA-2000-7013).
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    The advanced air bag requirements were a culmination of a 
comprehensive plan that the agency announced in 1996 to address the 
adverse effects of air bags. This plan also included an extensive 
consumer education program to encourage the placement of children in 
rear seats.
    The new requirements were phased in beginning with the 2004 model 
year. Small volume manufacturers (i.e., original vehicle manufacturers 
producing or assembling fewer than 5,000 vehicles annually for sale in 
the United States) were not subject to the advanced air bag 
requirements until September 1, 2006.
    In recent years, NHTSA has addressed a number of petitions for 
exemption from the advanced air bag requirements of FMVSS No. 208. The 
majority of these requests have come from small manufacturers which 
have petitioned on the basis of substantial economic hardship to a 
manufacturer that has tried in good faith to comply with the standard.
    Although NHTSA has granted a number of these petitions in 
situations where the manufacturer is supplying standard air bags in 
lieu of advanced air bags,\2\ NHTSA is considering (1) whether it is in 
the public interest to continue to grant such petitions, particularly 
in the same manner as in the past, given the number of years these 
requirements have now been in effect and the benefits of advanced air 
bags, and (2) to the extent such petitions are granted, what plans and 
countermeasures to protect child and infant occupants, short of 
compliance with the advanced air bags, should be expected.
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    \2\ See, e.g., grant of petition to Panoz, 72 FR 28759 (May 22, 
2007), or grant of petition to Koenigsegg, 72 FR 17608 (April 9, 
2007).
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    Given the passage of time since the advanced air bag requirements 
were established and have been implemented, and in light of the 
benefits of advanced air bags, NHTSA is considering whether it is in 
the public interest to continue to grant exemptions from these 
requirements, particularly in the same manner as in the past. The costs 
of compliance with the advanced air bag requirements of FMVSS No. 208 
are costs that all entrants to the U.S. automobile marketplace should 
expect to bear. Furthermore, NHTSA understands that, in contrast to the

[[Page 20083]]

initial years after the advanced air bag requirements went into effect, 
low volume manufacturers now have access to advanced air bag 
technology. Accordingly, NHTSA tentatively concludes that the expense 
of advanced air bag technology may not now be sufficient, in and of 
itself, to justify the grant of a petition for a hardship exemption 
from the advanced air bag requirements.
    NHTSA further notes that exemptions from motor vehicle safety 
standards are to be granted on a ``temporary basis.'' \3\ In prior 
petitions NHTSA has granted temporary exemptions from the advanced air 
bag requirements as a means of affording eligible manufacturers a 
transition period to comply with the exempted standard. Accordingly, in 
deciding whether to grant an exemption based on substantial economic 
hardship, NHTSA ordinarily considers the steps that the manufacturer 
has already taken to achieve compliance, as well as the future steps 
the manufacturer plans to take during the exemption period and the 
estimated date by which full compliance will be achieved.\4\
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    \3\ 49 U.S.C. 30113(b)(1).
    \4\ 49 CFR 555.6(a)(2).
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    NHTSA invites comment on whether and in what circumstances (e.g., 
nature of vehicles, number of vehicles, level of efforts to comply with 
the requirements, timing as to number of years since the requirements 
were implemented, etc.) it should continue to grant petitions for 
exemptions from the advanced air bag requirements of FMVSS No. 208. We 
note that any policy statements we may make in this area would not have 
the effect of precluding manufacturers from submitting subsequent 
petitions for exemption. However, we believe it could be helpful for 
manufacturers to know our general views in advance of submitting a 
petition.
    We also request comment on the issue of, to the extent such 
petitions are granted, what plans and countermeasures to protect child 
and infant occupants, short of compliance with the advanced air bags, 
should be expected. We note that in responding to some recent petitions 
for exemption from the advanced air bag requirements of FMVSS No. 208, 
NHTSA has considered the fact that the petitioner planned to install 
some countermeasures for the protection of child passengers.\5\
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    \5\ See, e.g., grant of petition of Think Technology AS, 74 FR 
40634-01 (Aug. 12, 2009); grant of petition of Ferrari S.p.A., 74 FR 
36303-02 (July 22, 2009).
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    NHTSA also invites comment on the likelihood that a child or infant 
will be a passenger in either a Morgan or Koenigsegg vehicle sold in 
the U.S.
    As always, we are concerned about the potential safety implication 
of any temporary exemption granted by this agency. In the present case, 
we are addressing two petitions that seek renewals of temporary 
exemptions from the advanced air bag requirements. Each petitioner is a 
manufacturer of low volume, specialty sports cars.

II. Overview of Petitions for Economic Hardship Exemption

    In accordance with 49 U.S.C. 30113 and the procedures in 49 CFR 
Part 555, Koenigsegg Automotive AB (``Koenigsegg'') and Morgan Motor 
Company (``Morgan'') have petitioned the agency for renewals of 
temporary exemptions from certain advanced air bag requirements of 
FMVSS No. 208 (S14).
    The basis for Koenigsegg's application and for Morgan's application 
is that compliance would cause substantial economic hardship \6\ to a 
manufacturer that has tried in good faith to comply with that standard. 
A copy of each petition \7\ is available for review and has been placed 
in the docket for this notice. The agency closely examines and 
considers the information provided by manufacturers in support of these 
factors, and, in addition, pursuant to 49 U.S.C. 30113(b)(3)(A), 
determines whether exemption is in the public interest and consistent 
with the Safety Act.\8\
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    \6\ When considering financial matters involving companies based 
in the European Union (EU), it is important to recognize that EU and 
U.S. accounting principles have certain differences in their 
treatment of revenue, expenses, and profits. Public statements by EU 
manufacturers relating to financial results should be understood in 
this context. This agency analyzes claims of financial hardship 
carefully and in accordance with U.S. accounting principles.
    \7\ Morgan has requested confidential treatment under 49 CFR 
Part 512 for certain business and financial information submitted as 
part of its petition for temporary exemption. Accordingly, the 
information placed in the docket does not contain such information 
that the agency has determined to be confidential.
    \8\ The Safety Act is codified as Title 49, United States Code, 
Chapter 301.
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    A manufacturer is eligible to apply for a hardship exemption if its 
total motor vehicle production in its most recent year of production 
did not exceed 10,000 vehicles, as determined by the NHTSA 
Administrator (49 U.S.C. 30113).
    Finally, while 49 U.S.C. 30113(b) states that exemptions from a 
Safety Act standard are to be granted on a ``temporary basis,'' \9\ the 
statute also expressly provides for renewal of an exemption on 
reapplication. Manufacturers are nevertheless cautioned that the 
agency's decision to grant an initial petition in no way predetermines 
that the agency will repeatedly grant renewal petitions, thereby 
imparting semi-permanent exemption from a safety standard. Exempted 
manufacturers seeking renewal must bear in mind that the agency is 
directed to consider financial hardship as but one factor, along with 
the manufacturer's on-going good faith efforts to comply with the 
regulation, the public interest, consistency with the Safety Act, 
generally, as well as other such matters provided in the statute.
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    \9\ 49 U.S.C 30113(b)(1).
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    We note that under 49 CFR 555.8(e), ``If an application for renewal 
of temporary exemption that meets the requirements of Sec.  555.5 has 
been filed not later than 60 days before the termination date of an 
exemption, the exemption does not terminate until the Administrator 
grants or denies the application for renewal.'' In the case of the 
petitions for renewal from both Koenigsegg and Morgan, each 
manufacturer submitted its petition for renewal by the deadline stated 
in 49 CFR 555.8(e).

III. Petition of Koenigsegg

    Background--Koenigsegg Automotive is a Swedish corporation formed 
in 1999 to produce high-performance sports cars, which are not intended 
for daily commuting purposes. Koenigsegg is a privately owned company 
with fewer than 100 shareholders, and manufactures fewer than 50 cars 
per year. At the time Koenigsegg applied for its initial exemption, the 
Koenigsegg product line for U.S. sale consisted of the CC model. The 
Koenigsegg CCX was developed as the next generation of Koenigsegg 
vehicles after production of the CCR model ended on December 30, 2005. 
The CCX model (the subject of Koenigsegg's petitions for temporary 
exemption) was scheduled to go into production in 2006 and to continue 
at least through the end of 2009. Originally, planning to sell vehicles 
only in the European, Mid-East, and Far-East markets, Koenigsegg 
decided in late 2005 to seek entry to the U.S. market for reasons 
related to ongoing financial viability. The retail price of the CCX is 
reported to be over $700,000 per vehicle.
    In a Federal Register document of April 9, 2007 (72 FR 17608), 
Koenigsegg was granted a temporary exemption from the advanced air bag 
requirements of FMVSS No. 208, Occupant Crash Protection, and from 
certain provisions of FMVSS No. 108, Lamps, Reflective Devices, and 
Associated Equipment for

[[Page 20084]]

the CCX. The exemption was granted for the period from April 9, 2007 
(the date of Federal Register publication of the grant of Koenigsegg's 
petition) through December 31, 2009. In accordance with 49 CFR part 
555, the basis for the grant was that compliance would cause 
substantial economic hardship to a manufacturer that has tried in good 
faith to comply with the standard, and the exemption would have a 
negligible impact on motor vehicle safety.
    In a submission dated October 29, 2009, Koenigsegg petitioned for a 
partial renewal of its temporary exemption, seeking a temporary 
exemption from the advanced air bag requirements only for the CCX. 
Koenigsegg did not seek renewal of the exemption from FMVSS No. 108 
requirements. Koenigsegg sought a renewal of temporary exemption from 
the advanced air bag requirements for the CCX for an additional three 
years, from January 1, 2010 through December 31, 2012.
    As discussed in further detail below, the petitioner argued that it 
tried in good faith, but could not bring the vehicle into compliance 
with the advanced air bag requirements, and would incur substantial 
economic hardship if it cannot sell continue to sell vehicles in the 
U.S.
    Eligibility. Koenigsegg is a small, privately-owned company with at 
present, 40 full-time staff members and several part-time employees. 
Koenigsegg advises NHTSA that it is not affiliated with any other 
automobile manufacturer. At the time Koenigsegg submitted its petition 
to NHTSA, Koenigsegg was negotiating to purchase SAAB Automobile, but 
SAAB was not sold to Koenigsegg.
    The company is a small volume manufacturer whose total production 
has been between four and eight vehicles per year for the past four 
years. According to profit and loss accounts provided by Koenigsegg, 
the company has experienced losses in calendar year (CY) 2006 of 
$3,771,571,\10\ losses in CY 2007 of $3,673,124, and losses in CY 2008 
of $274,255. In CY 2009, Koenigsegg reported a profit of $178,281.
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    \10\ All dollar amounts cited are based on an exchange rate of 
6.8 krona to the U.S. dollar.
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    Since it was granted the exemption from advanced air bags in 2007, 
Koenigsegg stated that worldwide economic conditions required a re-
evaluation of its business and sales projections. Koenigsegg's earlier 
plan to manufacture as many as 50 vehicles per year has been adjusted 
to approximately 20 vehicles per year. Recently, Koenigsegg has 
initiated a ``Custom Vision'' program that allows customers a measure 
of customization (within vehicle specification boundaries) of their 
vehicles. This initiative has increased the costs of building the 
vehicles and resulted in an increase in the retail sales price of each 
vehicle.\11\
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    \11\ Koenigsegg did not specify the amount of the increase in 
price.
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    As an additional source of income, Koenigsegg has been able to sell 
its engineering services to third parties and cites the ``Quant concept 
car'' \12\ as one project.
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    \12\ In footnote 1 in its petition, Koenigsegg describes the 
``Quant concept car'' as follows: ``The Quant project was a 
commission from NLG, a Swiss high tech company specializing in the 
development of new patented solar cell and rechargeable battery 
technologies, who wanted a high profile concept car to showcase 
their technologies. Koenigsegg was responsible for the vehicle 
concept, styling and showcar manufacturing and painting, show ready 
* * *''
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    According to forecasts presented in its petition, Koenigsegg 
anticipates the following number of CCX vehicles would be imported into 
the United States, if its requested renewal of exemption were to be 
granted: 10 CCXs in CY 2010; 12 CCXs in CY 2011, and 17 CCXs in CY 
2012.
    Requested Exemptions. Koenigsegg stated that it intends to certify 
the CCX as complying with the rigid barrier belted test requirement 
using the 50th percentile adult male test dummy set forth in S14.5.1 of 
FMVSS No. 208. The petitioner stated that it previously determined the 
CCX's compliance with rigid barrier unbelted test requirements using 
the 50th percentile adult male test dummy through the S13 sled test 
using a generic pulse rather than a full vehicle test. Koenigsegg 
stated that it, therefore, cannot at present say with certainty that 
the CCX will comply with the unbelted test requirement under S14.5.2, 
which is a 20-25 mph rigid barrier test. As for the CCX's compliance 
with the other advanced air bag requirements, Koenigsegg stated that it 
does not know whether the CCX will be compliant because to date it has 
not had the financial ability to conduct the necessary testing. As 
such, Koenigsegg is requesting an exemption for the CCX from the rigid 
barrier unbelted test requirement with the 50th percentile adult male 
test dummy (S14.5.2), the rigid barrier test requirement using the 5th 
percentile adult female test dummy (belted and unbelted, S15), the 
offset deformable barrier test requirement using the 5th percentile 
adult female test dummy (S17), the requirements to provide protection 
for infants and children (S19, S21, and S23) and the requirement using 
an out-of-position 5th percentile adult female test dummy at the driver 
position (S25).
    Koenigsegg's Statement of Economic Hardship--Publicly available 
information and financial documents submitted to NHTSA by the 
petitioner indicate that sales of the CCX will result in greater 
financial losses unless Koenigsegg obtains renewal of the temporary 
exemption from the advanced air bag requirements.
    Koenigsegg states that the U.S. accounts for approximately 35 to 40 
percent of the worldwide market for the CCX. Koenigsegg states that for 
CY 2006 through 2008, its financial statements have shown losses of 
over $7.7 million dollars.\13\
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    \13\ All dollar amounts cited are based on an exchange rate of 
6.8 krona to the U.S. dollar.
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    Koenigsegg states that if the renewal of the temporary exemption 
from advanced air bag requirements is not granted, there will be losses 
over CYs 2009-2011 of more than $3.3 million.\14\
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    \14\ Koenigsegg states it will make a profit of $178,281 in CY 
2009 (the last year of the temporary exemption from advanced air bag 
and FMVSS No. 108 requirements), and without a renewal of the 
temporary exemption from advanced air bag requirements, forecasts 
that it will incur a loss of $2,607,200 in CY 2010, and that it will 
incur a loss of $704,785 in CY 2011.
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    With a renewal of the temporary exemption from advanced air bag 
requirements, Koenigsegg forecasts profits of $3.6 million for CYs 2010 
through 2012.\15\
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    \15\ With a renewal of the temporary exemption from advanced air 
bag requirements, Koenigsegg forecasts that it will make a profit of 
$6,636 (assuming U.S. sales of 10 CCX vehicles) in CY 2010, make a 
profit of $1,131,449 (assuming U.S. sales of 12 CCX vehicles) in CY 
2011, and will make a profit of $2,493,698 (assuming U.S. sales of 
17 CCX vehicles) in CY 2012.
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    Koenigsegg states that without the renewal of the temporary 
exemption, the CCX cannot be sold in the U.S. from CY 2010 through 
2012, and it needs the income from U.S. sales until the next version of 
the CCX is produced in 2013 with advanced air bags. Koenigsegg asserts 
that the financial impact of a denial of renewal of the temporary 
exemption would be more than lost sales. Koenigsegg's view is that with 
no U.S. sales for a three year period, it will ``surrender'' its small, 
but, in Koenigsegg's view, ``significant'' market share to competitors, 
and expressed concern that it will not be able to regain that lost 
market share. Furthermore, because the CYs 2010 through 2012 U.S. sales 
of the CCX are expected to make up half of worldwide sales of the CCX, 
Koenigsegg stated it is ``likely'' that it would no longer be viable 
for Koenigsegg to continue to produce the CCX for any market.

[[Page 20085]]

    Koenigsegg's Statement of Good Faith Efforts to Comply With 
Advanced Air Bag Requirements--Koenigsegg provided the following 
information in support of its statement that it has made the requisite 
good faith efforts to meet advanced air bag requirements. In its 
initial petition for temporary exemption from advanced air bag 
requirements, Koenigsegg anticipated ``that two years would be needed 
to install an advanced air bag system on the CCX.'' \16\ At that time, 
Koenigsegg planned to produce a second generation of the CCX model by 
late 2009, which would be certified as complying with all applicable 
U.S. standards, including those for advanced air bags.
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    \16\ 72 FR 17608, at 17611, April 9, 2007.
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    However, Koenigsegg is facing unanticipated financial challenges. 
Since it was granted the temporary exemption from advanced air bag 
requirements in April 2007, Koenigsegg cited ``unexpected events'' that 
have necessitated the product cycle of the CCX to be extended from 
December 2009 to December 2012. The introduction of the successor 
vehicle to the CCX has been delayed for three years because Koenigsegg 
has used available funds to comply with the California Air Resources 
Board (CARB) requirements for the U.S. market. The world economic 
situation has hindered Koenigsegg's search for outside financing to 
develop the new model. Koenigsegg stated that: ``The limited funds 
available are felt to be better utilized on improving the CCX with 
regards to 35 mph occupant protection.''
    Koenigsegg stated that expenditures also went to meeting U.S. and 
European carbon dioxide emissions requirements and FMVSS No. 108 
headlamp requirements.
    In 2009, when it realized the successor vehicle to the CCX was 
going to be delayed, Koenigsegg once again looked into the possibility 
of fitting advanced air bags into the current CCX. Koenigsegg had hoped 
that technological and supplier availability had changed since it made 
its last review in 2005. After its 2009 review, Koenigsegg concluded 
that advanced air bags for the current CCX were not available.
    Nevertheless, there has been some progress in developing advanced 
air bags for the CCX. Koenigsegg states that it has undertaken 
significant work and through many iterations of crash analysis 
simulation, now understands the extent of redesign. Koenigsegg states 
that complete compliance with FMVSS No. 208 is hindered by the number 
of crash test vehicles needed to validate all the test cases. 
Koenigsegg states that in adopting the new development plan, it would 
take three vehicles and 10 full front end assemblies, at a cost to 
Koenigsegg of $4.5 million. Koenigsegg states that at present, this 
amount of money is neither financially or commercially feasible.
    Koenigsegg explained how it has focused on developing advanced air 
bags for the CCX successor vehicle. Koenigsegg has started working with 
a consortium consisting of IDIADA, Bosch, and Key Safety Systems, to 
develop a ``low risk'' advanced air bag development program that would 
be feasible for a small volume manufacturer to complete. This effort is 
primarily based on a drastic reduction in the number of test vehicles, 
and is based on continued rebuild and repair of frontal structures that 
are bolted on to the vehicle. Koenigsegg stated that this was possible 
because of the ``advanced monococque chassis concept'' upon which the 
CCX successor will be based. Koenigsegg further stated that the 
successor to the CCX will comply with the FMVSS No. 214 Side Impact 
Protection pole test criteria.
    Koenigsegg described how the work initiated for the advanced air 
bag program will be shared: Koenigsegg will take overall vehicle 
engineering responsibility; IDIADA will perform all CAE (computer aided 
engineering) and manage the crash test program; Bosch will be 
responsible for the air bag ECU (electronic control unit) hardware/
software development; and Key Safety Systems (KSS) will be responsible 
for the DAB (driver side air bag)/PAB (passenger side air bag) and 
restraint system hardware adaptation and calibration, including all 
sled tests.
    Koenigsegg's plan is to spend over $1.3 million in outside 
development costs plus $2.8 million for the cost of development 
vehicles. Because of the worldwide economic situation, which has 
affected automotive sales, Koenigsegg states that it needs more time to 
be able to raise the capital to meet the advanced air bag development 
expenditures.
    Koenigsegg Argues an Exemption Would Be in the Public Interest. The 
petitioner put forth several arguments in favor of a finding that the 
requested renewal of an exemption from advanced air bag requirements 
would be consistent with the public interest. Specifically, Koenigsegg 
argued that the vehicle would be equipped with a fully-compliant 
standard U.S. air bag system. Other than the lack of an advanced air 
bag, Koenigsegg emphasized that the CCX will comply with applicable 
FMVSSs and with Part 581, Bumper Standard.
    As additional bases for showing that its requested renewal of an 
exemption would be in the public interest, Koenigsegg offered the 
following. The company asserted that there is consumer demand in the 
U.S. for the CCX, and granting this application will allow the demand 
to be met, thereby expanding consumer choice. The company also 
suggested another reason why granting the renewal of the exemption 
would not be expected to have a significant impact on safety, 
specifically because the vehicle is unlikely to be used extensively by 
owners, due to its ``sporty (second car) nature.'' Finally, Koenigsegg 
indicated that the CCX incorporates advanced engineering and certain 
advanced safety features that are not required by the FMVSSs, including 
racing brakes with anti-lock capability and traction control. In 
addition, the company argued that the CCX has enhanced fuel efficiency 
due to its highly aerodynamic design.

IV. Petition of Morgan

    Background--Founded in 1909, Morgan is a small, privately-owned 
vehicle manufacturer producing approximately 650 specialty sports cars 
per year.\17\ Morgan manufactures several models, but at present, only 
sells the Aero 8 in the U.S. Morgan intended to produce a vehicle line 
specific to the U.S. market, with Ford supplying the engine and 
transmission. However, for technical reasons, the project did not come 
to fruition, and Morgan temporarily stopped selling vehicles in the 
U.S. in 2004. In May 2005, Morgan obtained a temporary exemption from 
this agency's bumper standard and began selling the Aero 8 in the U.S.
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    \17\ A manufacturer is eligible to apply for a hardship 
exemption if its total motor vehicle production in its most recent 
year of production does not exceed 10,000, as determined by the 
NHTSA Administrator (15 U.S.C. 1410(d)(1)).
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    On July 12, 2006 (71 FR 39386), NHTSA published a notice of receipt 
of five applications for temporary exemptions from the advanced air bag 
requirements of FMVSS No. 208. Among these petitions was one from 
Morgan, for the Aero 8, which is discussed at pages 39390-39391. 
Morgan's petition is included in the docket for that notice, i.e., 
Docket NHTSA-2006-25324.
    We granted Morgan's petition for temporary exemption in a Federal 
Register notice of September 7, 2006 (71 FR 52851). The discussion of 
Morgan's grant is on pages 52862 though 52865. The grant of temporary 
exemption is for the Morgan Aero 8 ``From S15.2, S17,

[[Page 20086]]

S19, S21, S23, and S25 of 49 CFR 571.208.'' The exemption was granted 
for the period from September 1, 2006 to August 31, 2009.
    In a petition dated June 11, 2009, Morgan asked for a renewal of 
the temporary exemption for a two year period, from September 1, 2009 
to August 31, 2011. NHTSA's statute at 49 U.S.C. 30113(b) states that 
exemptions from a Federal motor vehicle safety standard are to be 
granted on a ``temporary basis.'' \18\ However, the statute also 
expressly provides for renewal of an exemption on reapplication.
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    \18\ 49 U.S.C. 30113(b)(1).
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    Morgan's petition would apply to the Aero 8 and the Aero Super 
Sport, an interim vehicle also based on the Aero platform. The Aero 
Super Sport will be available on an interim basis until a successor 
vehicle (code named the AP8), is complete and ready for sale.
    Morgan's Statement of Economic Hardship--In its petition for 
temporary exemption for the Aero 8 for September 1, 2006 through August 
31, 2009, Morgan estimated that U.S. sales of the Aero 8 would be 
several hundred vehicles a year. In the June 11, 2009 petition, Morgan 
reports that it has sold 19 Aero 8s in the U.S. from September 2006 to 
the present. The 19 vehicles represent ``less than 3% of what had been 
expected.''
    Morgan stated it has been focusing over the last two years on the 
Aero model range successor, (code named the AP8) which will be a 
completely new design. However, since the original petition was granted 
in 2006, it was decided to extend the availability of the present Aero 
model from September 2009 to the fall of 2011, in large part due to 
world economic conditions.
    Because, over the past few years, Morgan did not sell as many 
vehicles in the U.S. as it had hoped, and because of other economic 
considerations, Morgan decided to delay development of the new AP8. In 
order to ``improve available funds,'' Morgan decided to concentrate on 
the Aero Super Sport, an interim project based on the Aero platform, 
which Morgan hopes will be able to generate enough revenue so that 
Morgan can continue to develop the AP8. The Aero Super Sport was slated 
to be available in the U.S. in January 2010.
    Morgan seeks an extension of the temporary exemption from the 
advanced air bag requirements for the Aero Super Sport. Morgan intends 
to use the exemption to cover a ``limited production run of 50 U.S. 
Aero Super Sport cars.'' Morgan states the Aero Super Sport will be the 
last model that is based on the Aero chassis and that uses the standard 
air bag system.
    Morgan states that the Aero ``must'' come to an end in 2011 because 
the production of the steering wheel has ended, and no further stock, 
other than that already owned by Morgan, is available. Morgan stated 
that this essentially forced end to production is important because 
``it essentially precludes further requests by Morgan to NHTSA to 
prolong the Aero platform in the U.S.''
    Morgan estimates that, assuming 50 Aero Super Sports are sold in 
the U.S., the total number of exempted vehicles that Morgan 
manufactures and sells in the U.S. will be 69 (50 Aero Super Sports 
plus the 19 Aero 8s already sold). If Morgan can sell 69 vehicles, that 
will be 656 fewer vehicles than the projected sales in Morgan's first 
petition for temporary exemption in 2005.
    Morgan's Statement of Good Faith Efforts to Comply--In its previous 
submission, Morgan stated that it has been working with the air bag 
supplier Siemens to develop an advanced air bag system for the Aero 8. 
However, a lack of funds and technical problems precluded the 
implementation of an advanced air bag system for the Aero 8. It said 
that the minimum time needed to develop an advanced air bag system 
(provided that there is a source of revenue) is two years. Specific 
technical challenges include the following. Morgan does not have access 
to the necessary sensor technology to pursue the ``full suppression'' 
passenger air bag option. Due to the design of the Aero 8 platform 
dashboard, an entirely new interior solution and design must be 
developed. Chassis modifications are anticipated due to the originally 
stiff chassis design.
    In its February 2006 petition, Morgan stated that for vehicles to 
be built between September 2006-September 2009, the Aero 8 vehicles 
will have (and in fact, did have) standard air bags. Back then, Morgan 
stated its belief that when its advanced air bag system is ready in 
2009, the air bag system will simultaneously be installed in both the 
Aero and other models.
    Morgan's Statement of Public Interest--In its original petition 
concerning the Aero, Morgan put forth several arguments supporting its 
view that the requested exemption is consistent with the public 
interest. According to Morgan, if the exemption was denied and Morgan 
stops U.S. sales, Morgan's U.S. dealers would unavoidably have numerous 
lay-offs, resulting in U.S. unemployment. Denial of an exemption would 
reduce consumer choice in the specialty sports car market sector in 
which Morgan cars compete. That company argued that the Morgan vehicles 
will not be used extensively by owners, and are unlikely to carry small 
children. Finally, according to Morgan, granting an exemption would 
assure the continued availability of proper parts and service support 
for existing Morgan owners. Without an exemption, Morgan would be 
forced from the U.S. market, and Morgan dealers would find it difficult 
to support existing customers.
    In its petition asking for a renewal of the temporary exemption 
from FMVSS No. 208, Morgan reiterated these points.

V. Public Comment Period

    We are providing a 30-day comment period on Koenigsegg's and 
Morgan's petitions for an extension of a temporary exemption from the 
advanced air bag requirement of FMVSS No. 208. After considering public 
comments and other available information, we will publish a notice of 
final action addressing each application in the Federal Register.

VI. Public Participation

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 in your comments.
    Your comments must not be more than 15 pages long. (49 CFR 553.21). 
We established this limit to encourage you to write your primary 
comments in a concise fashion. However, you may attach necessary 
additional documents to your comments. There is no limit on the length 
of the attachments.
    Please submit two copies of your comments, including the 
attachments, to the Docket at the address given above under ADDRESSES.
    Comments may also be submitted to the docket electronically by 
logging into http://www.regulations.gov. Follow the online instructions 
for submitting comments.
    Please note that pursuant to the Data Quality Act, in order for 
substantive data to be relied upon and used by the agency, it must meet 
the information quality standards set forth in the OMB and DOT Data 
Quality Act guidelines. Accordingly, we encourage you to consult the 
guidelines in preparing your comments. OMB's guidelines may be accessed 
at http://www.whitehouse.gov/omb/fedreg/reproducible.html.

[[Page 20087]]

How can I be sure that my comments were received?

    If you wish Docket Management to notify you upon its receipt of 
your comments, enclose a self-addressed, stamped postcard in the 
envelope containing your comments. Upon receiving your comments, Docket 
Management will return the postcard by mail.

How do I submit confidential business information?

    If you wish to submit any information under a claim of 
confidentiality, you should submit three copies of your complete 
submission, including the information you claim to be confidential 
business information, to the Chief Counsel, NHTSA, at the address given 
above under FOR FURTHER INFORMATION CONTACT. In addition, you should 
submit two copies, from which you have deleted the claimed confidential 
business information, to Docket Management at the address given above 
under ADDRESSES. When you send a comment containing information claimed 
to be confidential business information, you should include a cover 
letter setting forth the information specified in our confidential 
business information regulation. (49 CFR part 512.)

Will the agency consider late comments?

    We will consider all comments that Docket Management receives 
before the close of business on the comment closing date indicated 
above under DATES. To the extent possible, we will also consider 
comments that Docket Management receives after that date. If Docket 
Management receives a comment too late for us to consider in developing 
a final rule (assuming that one is issued), we will consider that 
comment as an informal suggestion for future rulemaking action.

How can I read the comments submitted by other people?

    You may read the comments received by Docket Management at the 
address given above under ADDRESSES. The hours of the Docket are 
indicated above in the same location. You may also see the comments on 
the Internet. To read the comments on the Internet, go to http://www.regulations.gov. Follow the online instructions for accessing the 
dockets.
    Please note that even after the comment closing date, we will 
continue to file relevant information in the Docket as it becomes 
available. Further, some people may submit late comments. Accordingly, 
we recommend that you periodically check the Docket for new material.

    Authority:  49 U.S.C. 30113; delegations of authority at 49 CFR 
1.50. and 501.8.

    Issued on: April 5, 2011.
Joseph S. Carra,
Acting Associate Administrator for Rulemaking.
[FR Doc. 2011-8468 Filed 4-8-11; 8:45 am]
BILLING CODE 4910-59-P