AC Cars Ltd; Grant of Petition for Temporary Exemption From Standard No. 208

DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

[Docket No. 94-10; Notice 2]

AC Cars Ltd; Grant of Petition for Temporary Exemption From

Standard No. 208

AC Cars Ltd. of Weybridge, Surrey, England, petitioned for a

temporary exemption until November 1, 1996, for its Ace model, from the

automatic protection requirements of Federal Motor Vehicle Safety

Standard No. 208, Occupant Crash Protection. The basis of the petition

was that compliance would cause substantial economic hardship.

Notice of receipt of the petition was published on February 2,

1994, and an opportunity afforded for comment (59 FR 4964). This notice

grants the petition.

Petitioner's Hardship Arguments

Under 15 U.S.C. 1410(a)(1)(A), the Administrator may provide a

temporary exemption upon a finding that ``compliance would cause

substantial economic hardship and that the manufacturer has, in good

faith, attempted to comply * * *.''

The following is a summary of AC's petition. The company is

privately owned and produced no motor vehicles during the 12 months

preceding the filing of its petition. The first prototype of the Ace

was shown in 1986. Since then, the company has spent much time

redesigning it ``to meet the increasingly higher standards of emissions

and safety * * * with the original intentions of achieving first sales

into North America.'' As of the date of the petition, the petitioner

has spent approximately 5,000,000 Pounds Sterling on the project,

100,000 of which (and 1,250 man hours) have been spent in the two years

preceding the filing of the petition in research and development

relating to meeting the automatic restraint requirements of Standard

No. 208. Because the Ace is a full convertible, the company found that

it could not adopt an automatic seat belt system. Additional design

changes, development and actual testing are necessary in order to

install in the Ace an airbag system that meets Standard No. 208. Being

a small manufacturer of motor vehicles, the petitioner has had to rely

on the expertise of outside parties in the design and development of

necessary components.

AC concluded that modifications of the following will be required

to accommodate driver and passenger side airbag systems: interior dash

and cockpit components, seats, steering wheel and chassis. The

estimated cost of these modifications is 750,000 Pounds Sterling,

exclusive of testing costs. The company's balance sheet shows that its

cumulative losses, which were approximately 1,500,000 Pounds Sterling

as of December 31, 1989, increased to approximately 4,275,000 Pounds

Sterling as of September 30, 1993.

The company anticipates that it will be able to conform by November

1, 1996. It projects total sales of 200 units in 1994 and 350 in 1995,

half of which are proposed for North American sales.

Arguments Why an Exemption Would be in the Public Interest and

Consistent With Traffic Safety Objectives

In order to grant an exemption, the Administrator must also find

that the exemption is in the public interest and consistent with the

objectives of the National Traffic and Motor Vehicle Safety Act (the

Act). In support of its petition, AC informed NHTSA that the Ace will

be equipped with a three-point restraint system that conforms to

Standard No. 208, ``the mountings of which have been tested in

accordance with and achieved FMV210 (sic) US standard approval.''

Further, except for the automatic restraint requirements, the Ace has

been designed to meet all other Federal motor vehicle safety standards,

and the bumper standard. It will be manufactured ``using the following

US sourced components: Ford engine, transmission, exhaust, wiring and

associated components.'' According to the petitioner, ``US parts

sourcing and dealer network labor involvement is also in the best

interest of the US economy.''

No comments were received on the petition.

The agency is cognizant of the history of AC Cars Ltd., a

manufacturer of ancient lineage whose production during the 70 years or

so of its existence has been minimal, and, in the past decade,

sporadic. The Ace is a refinement of a 1986 prototype which had not

entered production as of the time that the company filed its petition.

In spite of its cumulative net losses, AC has been able to engineer a

passenger car that it avers is in compliance with all Federal motor

vehicle safety and bumper standards with the exception of the standard

for which it seeks temporary exemption. With respect to Standard No.

208, NHTSA is aware of the problems that small manufacturers have in

interesting outside concerns to engineer and supply automatic restraint

systems for unique vehicles of very limited production. AC appears to

have determined the areas of its product that must be revised in order

to conform to Standard No. 208, and to have established a schedule for

achieving compliance. The Ace will be equipped with a three-point

restraint system in each of its two designated seating positions. The

decision to engineer for airbags appears particularly appropriate given

the mandate that all cars be equipped with driver and passenger airbags

and given the extra expense that would result from designing first for

automatic belts and then for air bags. The car will utilize a US-

manufactured drive train and other components.

Accordingly, it is hereby found that to require compliance would

cause the petitioner substantial economic hardship and that the

petitioner has made a good faith effort to comply with the standard for

which exemption is requested. It is further found that a temporary

exemption would be in the public interest and consistent with the

objectives of the Act. AC Cars Ltd. is granted NHTSA Temporary

Exemption 94-3, expiring November 1, 1996, from S4.1.4 of 49 CFR

571.208 Motor Vehicle Safety Standard No. 208 Occupant Crash

Protection.

Authority: 15 U.S.C. 1410; delegation of authority at 49 CFR

1.50.

Issued on: May 3, 1994.

Christopher A. Hart,

Deputy Administrator.

[FR Doc. 94-11008 Filed 5-6-94; 8:45 am]

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