Interpretation ID: nht90-2.53

TYPE: Interpretation-NHTSA

DATE: May 25, 1990

FROM: Marc J. Fink and Stephen C. Crampton -- Dow, Lohnes & Albertson; Signature by S.C. Crampton

TO: Robert F. Hellmuth -- Director, Office of Vehicle Safety Compliance, NHTSA

TITLE: None

ATTACHMT: Attached to letter dated 9-20-90 from P.J. Rice to M.J. Fink (A36; Part 591)

TEXT:

We request your approval to allow John A. Rosatti to import his Porsche 959 into the United States as a "demonstration" car. Mr. Rosatti intends to use his car to promote business by displaying it in his automobile dealerships and, if approval from New York State authorities is obtained, a future, adjunct automobile museum. Mr. Rosatti does not intend to drive his car on the road at any time. If necessary to ensure that the Porsche 959 will not be driven on the road, Mr. Rosatti will agree to remove the engine from the car.

John Rosatti has been in the automobile business for twenty five years; for the last fifteen years, he has owned and operated Plaza Motors of Brooklyn, Ltd. ("Plaza"). 1/ Plaza's grounds consist of buildings totalling approximately 75,000 square feet an d cover two city blocks. Plaza holds Honda, Acura, and Oldsmobile dealerships, selling about 500 cars each month. Approximately 2000 to 3000 people come into Plaza every week.

1/ Copies of recent newspaper advertisements for Plaza are appended to this letter as Attachment A.

NHTSA's new regulations, implementing the Imported Vehicle Safety Compliance Act of 1988, provide a "demonstration" exemption from restrictions on imports of motor vehicles that do not comply with NHTSA safety requirements. 2/ As discussed below, Mr. Ro satti's proposed use of his Porsche 959 falls under the plain language of NHTSA's regulation and the statute. Indeed, his proposed use is consistent with uses mentioned in the Supplementary Information accompanying the new rules.

The Supplementary Information states as follows:

Importation for this class of noncomplying motor vehicles (i.e., demonstration vehicles) has been permitted pursuant to the assumption that motor vehicle safety would not be affected by the temporary importation of noncomplying motor vehicles not general ly used on the public roads, and whose appearance on them would be limited.

54 Fed. Reg. at 40,076. As stated above, Mr. Rosatti has no intention to drive the Porsche 959. In this regard, Mr. Rosatti is agreeable to whatever reasonable restrictions NHTSA may impose to insure the car is not driven. If NHTSA requires, Mr. Rosat ti will provide a written statement attesting to his promise not to drive the car. Furthermore, to insure

that the Porsche 959 could not be used on public roads by anyone, Mr. Rosatti, if required, will agree to remove the engine from the car.

2/ The Imported Vehicle Safety Compliance Act of 1988, 102 Stat. 2818, 2824 (to be codified at 15 U.S.C. S 1397(j)), provides that "(t)he Secretary may exempt any motor vehicle or item of motor vehicle equipment . . . upon such terms and conditions as t he Secretary may find necessary solely for the purpose of . . . demonstrations."

The NHTSA regulation implementing this provision of the statute, 54 Fed. Reg. 40,069, 40,080, as amended by 54 Fed. Reg. 49,098, 49,101 (1989) (to be codified at 49 C.F.R. S 591.5(j)), states as follows:

No person shall import a motor vehicle or item of motor vehicle equipment into the United States unless, at the time it is offered for importation, its importer files a declaration, in duplicate, which declares . . . (t)he vehicle or equipment item does not conform with all applicable Federal motor vehicle safety, bumper, and theft prevention standards, but it (sic) being imported solely for the purpose of . . . demonstrations.

Importantly, NHTSA's Supplementary Information specifically sanctions manufacturers' display of cars for commercial use. Id.3/ Like auto manufacturers, Mr. Rosatti intends to display his car to promote sales. The Porsche 959 would, he believes, serve a s a powerful attraction, drawing people to his automobile dealerships. Also like manufacturers, Mr. Rosatti will not drive the car. There is therefore no distinction between Mr. Rosatti's proposed use and the commercial display of a car by a manufactur er. NHTSA's own rationale and regulations dictate that permission be given to Mr. Rosatti to import his car for demonstration purposes.

Dealers like Mr. Rosatti depend heavily upon promotional campaigns to attract buyers; indeed, Plaza spends as much as $50,000 per month on promotional activities. Mr. Rosatti's promotional plan for the Porsche 959 specifically involves his Acura dealers hip.4/ Acura cars are advertised as high-quality, exciting, and inexpensive alternatives to fancy European sports cars. In fact, recent advertisements encourage car-buyers to trade in their expensive European cars for Acuras. In keeping with the Acura image, Mr. Rosatti intends to use his Porsche 959 to attract potential Acura buyers. As persons targeted for Acura sales are also likely to be interested in high-quality European sports cars, they will come to see a Porsche 959 on display. When they c ome, Mr. Rosatti will then have the opportunity to explain the benefits of his sporty, yet affordable, Acuras.

To implement his plan, Mr. Rosatti envisions running numerous advertisements in newspapers and on the radio, enticing potential car-buyers to come and see the Porsche 959. Initially, Mr. Rosatti intends to place the Porsche 959, along with his Ferrari T estarossa, Lamborghini Contach, specially built Porsche 935, and Mark IV Cobra, in a showroom on Plaza's premises. Preliminary estimates are that the automobile display could attract as many as 1000 additional persons per month to the dealerships. Thus , completely in line with NHTSA regulations, John Rosatti intends to import the Porsche 959 as a

commercial demonstration model.

3/ The Supplementary Information interprets "demonstration" cars as including "nonconforming products for display at automobile shows to gauge public reaction to new styling or engineering features." Id.

4/ Advertising proposals for the Acura/Porsche 959 advertising campaign are appended to this letter as Attachment B.

Mr. Rosatti, however, has a second interest in importing the Porsche 959, one that also accords entirely with the concept of a demonstration car. NHTSA's Supplementary Information manifests a concern that museums are not to be deprived of interesting and valuable items in their collection, stating that museums can import cars under the 25-year exception. Id. Mr. Rosatti's Porsche 959 is both interesting and valuable to automobile enthusiasts. Although Mr. Rosatti's car is less than 25 modelyears old and thus would not fit within the 25-year exception, its importation for use in a car museum conforms to the language and policy of the demonstration exemption.

Mr. Rosatti's museum will soon be ready for operation. Recently, the New York State Education Department recommended to the New York Board of Regents that Mr. Rosatti be issued a Provisional Charter to begin his museum. The Regents are scheduled to mee t soon and are expected to follow the Education Department's recommendation. The Provisional Charter is valid for three years and will be replaced by a permanent charter if the Education Department is satisfied with the progress of Mr. Rosatti's automob ile museum. When approval for the museum is received, Mr. Rosatti will convert a Plaza showroom into a museum for the Porsche 959 and his other valuable cars. Museums linked with commercial establishments are not uncommon. In many commercial establish ments, an ancillary museum, while not the main part of the business, serves as a major attraction for customers of the business.

Mr. Rosatti's motivations for wanting to import his Porsche 959 are simple. Mr. Rosatti is interested in combining his passion for automobiles and pride in his accomplishments in the automobile business with his commercial enterprise. To Mr. Rosatti, t he Porsche 959 and his other collector automobiles represent his success in the automobile industry, an industry to which Mr. Rosatti has devoted his working life. The Porsche 959 is the greatest trophy in his collection of cars. Mr. Rosatti naturally w ants to show off his cars, both for their commercial value and appeal and because they represent his achievements in the automobile industry.5/

Mr. Rosatti is very sensitive to NHTSA's concern that the Porsche 959 never be driven on American roads. Accordingly, Mr. Rosatti is prepared not simply to drain the engine of fluids, as you mentioned might be required in your letter of November 13, 198 9, but to remove the engine from the car. Thus, you can be completely assured that Mr. Rosatti's Porsche 959 will not be driven. Although Mr. Rosatti would prefer to display the engine next to the car, he is perfectly willing to display the engine at a separate location. Furthermore, Mr. Rosatti will gladly furnish periodic reports to NHTSA regarding the car's location and use.

To comply further with the conditions you suggested in your November 13 letter, Mr. Rosatti is willing to make a declaration that, if the Porsche is transferred by sale or inheritance, the new owner will be bound to keep the engine and body of the car se parate.

5/ To further exhibit his car, if permitted Mr. Rosatti would transport it to automobile shows, in particular, monthly Porche club shows and annual shows at the Jacob Javits Center.

In sum, the Imported Motor Vehicle Safety Compliance Act and NHTSA regulations provide a "demonstration" exemption from import bans to permit cars that will not be driven on the road to be imported for the purpose of demonstration. In this case, it woul d be contrary to the statute and NHTSA's regulations to deny Mr. Rosatti the opportunity to import his Porsche 959, especially as he offers to completely disable the car to satisfy NHTSA. Mr. Rosatti is not attempting to circumvent the law. He is simpl y a man who loves cars. Surely the law does not prevent him from collecting and showing trophies of his trade.

Therefore, we ask that you grant prior written permission for Mr. John A. Rosatti to import his Porsche 959 into the United States for the purpose of demonstration.