Interpretation ID: nht91-6.42

DATE: October 28, 1991

FROM: Paul Jackson Rice -- Chief Counsel, NHTSA

TO: Satoshi Nishibori -- Vice President, Industry/Government Affairs, Nissan Research & Development, Inc.

TITLE: None

ATTACHMT: Attached to letter dated 9-3-91 from Satoshi Nishibori to Paul Jackson Rice (OCC 6427)

TEXT:

This responds to your letter seeking an interpretation of the phase-in requirements for automatic crash protection in light trucks under Standard No. 208, Occupant Crash Protection (49 CFR S571.208). Specifically, you described a situation in which Nissan and another manufacturer will enter into a joint program to produce multipurpose passenger vehicles (MPVs). According to your letter, Nissan has undertaken the majority of the design and development tasks and will supply the major powertrain components to the other company for the purposes of assembly. The other company will assemble the powertrain and the rest of the vehicle in the United States. Some of the MPVS will be badged as the other company's vehicles and some will be badged as Nissan vehicles.

Your letter stated that Nissan and the other company have entered into a contract that states that the other company "is the manufacturer of the vehicle and will inscribe its name on the certification label." Both companies will mutally agree to an addendum of the previous contract that provides that each company will be treated as the manufacturer of the vehicles badged as their vehicles for the purposes of the phase-in of the automatic crash protection requirements for light trucks. You asked for an interpretation of two points. First, you asked if Nissan would be considered a manufacturer of these vehicles. NHTSA set forth the agency's position on this subject in the notice proposing to establish the phase-in of the automatic crash protection requirements for passenger cars. The following explanation appears at 50 FR 14596, April 12, 1985:

Since the National Traffic and Motor Vehicle Safety Act places the responsibility of compliance with safety standards on manufacturers, the agency does not have authority to attribute a vehicle to a party other than one of the vehicle's manufacturers. However, the agency considers the language in section 102(5) of the Vehicle Safety Act that a manufacturer is "any person engaged in the manufacturing or assembling of motor vehicles . . ." to be sufficiently broad to include sponsors, depending on the circumstances. For example, if a sponsor contracts for another manufacturer to produce a design exclusively for the sponsor, the sponsor may be considered the manufacturer. This follows from application of basic principles of agency law. In this case, the sponsor is the principal. On the other hand, the mere purchase of vehicles for resale by a company which also is a manufacturer of motor vehicles does not make the purchaser the manufacturer of those vehicles.

Applying these principles to the situation described in your letter, NHTSA concludes that Nissan would be considered a manufacturer of the jointly produced MPVs. Your letter indicates that Nissan will have done more than simply purchase another manufacturer's vehicles. Based on your representations that Nissan has undertaken the majority of design and development tasks and will supply the major powertrain components for these MPVs, we would view Nissan as a sponsor, and therefore a manufacturer, of these MPVS.

Second, you asked if Nissan can count those jointly produced MPVs that are badged as Nissans as its vehicles for the purposes of the phase-in of the automatic crash protection requirements for light trucks. This question is answered in the attribution rules for the light truck automatic crash protection phase-in, which appear at S4.2.5.6 of Standard No. 208. S4.2.5.6.2 provides that, in situations where a light truck is produced by more than one manufacturer, the manufacturers may agree among themselves which one will be considered the manufacturer of the light trucks in question for the purposes of the phase-in. When such an agreement is reached, it must be set forth in an express written contract and reported to this agency. Absent such an agreement, S4.2.5.6.1 provides that, for light trucks manufactured in the United States, the manufacturer that markets the light trucks will have those vehicles counted in its production.

If there were no contract between Nissan and the other manufacturer, Nissan would be considered the manufacturer of the Nissan badged light trucks for the purposes of the phase-in, pursuant to S4.2.5.6.1 of Standard No. 208. However, since there is a contract, its provisions will be applied to determine to which party the Nissan badged MPVs will be attributed during the phase-in, pursuant to S4.2.5.6.2. Your letter suggests that the contract between Nissan and the other manufacturer currently provides that the other manufacturer is the manufacturer of these vehicles and will identify itself as such on the vehicle's certification label. In that case, the other manufacturer would have the Nissan badged vehicles attributed to it during the phase-in.

Please note that Nissan and the other manufacturer are free to change the current attribution of the Nissan badged MPVs, by executing an addendum to the previous contract. Any such addendum must, of course, be reported to NHTSA pursuant to the requirements of 49 CFR S585.5(b)(3).

I hope that this information is helpful. Please let me know if you have any further questions or need some additional information on this subject.