Interpretation ID: 18089.ztv

Mr. Donald J. Rager
Chief Operating Officer
Shelby American, Inc.
501 S. Rancho Drive, Suite H-53
Las Vegas, NV 89106

Dear Mr. Rager:

This will acknowledge receipt of the application by Shelby American, Inc., for temporary exemption of the Shelby Series 1 from the automatic restraint requirements of Federal Motor Vehicle Safety Standard No. 208. The application, which is dated May 29, 1998, meets our procedural requirements, and we are preparing a notice for the Federal Register asking for public comment on your request.

We note that you planned to begin production of the Series 1 on July 1, 1998. Because of the statutory requirement that the public be offered an opportunity to comment on exemption applications, we generally afford a 30-day comment period. and a decision is reached 30 to 60 days after that. This means that Shelby must not sell any Series 1 vehicles unless and until the Administrator has responded affirmatively to Shelby's petition for a temporary exemption from Standard No. 208. We shall, of course, inform you when a decision has been made.

We also note (p. 2 of the application) that Shelby requests exemption from S4.1.5 of Standard No. 208, quoting S4.1.5. to the effect that passenger cars manufactured on or after September 1, 1989 must comply with S4.1.2.1. You are using an outdated version of the Standard. Passenger cars manufactured on and after September 1, 1997, must comply with S4.1.5.3, which, in turn, references S4.1..5.1(a)(1).

In the meantime, we have comments on certain information contained in the application regarding the Shelby Cobra CSX3000 Series Continuation Cars ("Continuation Cars"). You have informed us that the Continuation Cars are assembled "from certain new old stock parts surviving from . . . 1965 . . . supplemented by new parts manufactured from original tooling or build new to original specifications." We understand that "These vehicles are registered when sold as 1965 vehicles." We further understand that only two Continuation Cars have been built to date, and that the market for these cars is estimated at one to two units a year.

In our opinion, a vehicle assembled in 1997 or 1998 from parts manufactured in 1965 as well as from parts recently manufactured from original 1965 tooling is a motor vehicle that must comply with the Federal motor vehicle safety standards in effect and applicable to it at the time of its assembly, unless it has been exempted by the Administrator. Because Shelby did not include the Continuation Cars in its petition for exemption from Standard No. 208, we surmise that the company may be proceeding under the assumption that the Continuation Cars are not required to comply with any Federal requirements because they are registered as 1965 models. This is incorrect. We believe that Shelby should review the Continuation Car program in light of its Federal obligations before manufacturing more of them. With respect to the two Continuation Cars that have already been sold, if Shelby determines that they do not comply with the Federal motor vehicle safety standards that applied at the time of their assembly, it is required to notify their owners of that fact and offer to repair, repurchase, or replace them. Alternatively, Shelby, after its determination, may apply to the Administrator for a decision that the noncompliances are inconsequential to safety and that it should be excused from notification and remedy.

Shelby's application explains that parts for the Continuation Cars survive from the original planned production run of 100 cars, approximately half of which were completed in 1965. This was "the basis for homologation of the racing program." We understand that Shelby would like to continue the manufacture of the Continuation Cars indefinitely, until the supply of parts is exhausted. Under our interpretations, the Continuation Car would not be a motor vehicle subject to our regulations if it is manufactured for competition on closed courses, trailered from event to event, and not licensed for use on the public roads. You may wish to consider this approach with respect to future production of the Continuation Cars. Any statement of origin issued for these vehicles under this approach should state that they are not to be titled for highway use.

We have comments as well on the Shelby Cobra CSX4000 Series Component Vehicles ("Component Vehicles"), and the Daytona Coupe and 289 Cobra, which you also inform us are component vehicles. The term "component vehicles" refers to vehicles that are sold without engine and transmission; these components will be installed by the owner or at his or her direction, "and privately register the resulting vehicle." Under our interpretations, the installer is regarded as the manufacturer of the motor vehicle and responsible for its compliance with all applicable Federal regulations. However, Shelby is responsible for the compliance (and certification of compliance) of any part that it has manufactured recently from original tooling if that equipment item is directly covered by a Federal motor vehicle safety standard. The principal components we refer to are the vehicle's glazing and lighting equipment (we assume that brake hoses, brake fluid, tires, and seat belt assemblies are purchased new from suppliers who have certified their compliance with the Federal safety standards). In light of this paragraph, Shelby may wish to consider converting its Continuation Cars into Component Vehicles.

However, I must advise you that, under longstanding interpretations, we would still regard Shelby as the vehicle's manufacturer and responsible for compliance and its certification if it offered the Continuation Car's engine and transmission for sale to the purchaser of a Component Vehicle Continuation Car concurrently with the Component Vehicle or as part of the sales transaction.

We would appreciate your views on this issue.

If you have further questions, please call Taylor Vinson of this Office (202-366-5263).

Sincerely,
Frank Seales, Jr.
Chief Counsel
cc: Mac Yousry
FAX 714-974-3816
d.7/17/98
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