Interpretation ID: nht93-7.43

DATE: October 28, 1993

FROM: Jelly, Rachel -- Executive Engineer, Legislation and Certification., Lotus Cars Ltd.

TO: Womak, John -- Acting Chief Council, NHTSA

TITLE: NONE

ATTACHMT: Attached To A Letter Dated 5/9/94 From John Womack To John Bloomfield (A42; PART 525)

TEXT: Lotus / Bugatti, request for clarification regarding CAFE petition(s) for alternative CAFE standards.

Since January 1986 General Motors has owned 100% of Group Lotus. Under GM ownership the fuel economy data from the Lotus vehicles has been included with the GM import fleet for the purposes of CAFE fines and reporting. As GM had enough fuel efficient vehicles in its import fleet to offset the shortfall of the Lotus vehicles fuel economy-performance, no fines were required and thus no waiver petition for an alternative CAFE value was necessary.

On the 27th August 1993 General Motors sold 100% of Group Lotus Ltd to Bugatti International. Bugatti is also a vehicle manufacturer and plans to market passenger cars in the USA commencing with the 1994 model year. Both companies actual/projected sales volumes when taken individually, and combined, will make the companies eligible for classification as a small volume manufacturer. Please see the supporting data on page 3 of this letter for sales projections and fuel economy information.

Lotus now finds itself in the position where it needs to apply for an alternative CAFE standard for the 1994 thru 1997 (and possibly subsequent) model years. Also Bugatti is planning to submit a petition for alternative standards in the near future.

Please could you officially advise me if Lotus will be permitted to petition for its own CAFE value for its vehicles and Bugatti will be able to petition for another value for its fleet, or will Lotus and Bugatti have to combine sales projections and fuel economy data and petition for a joint value? The two manufacturing companies are run as separate entities within the group to maintain the individual identity of the products.

If you require any further information please do not hesitate to contact me, my direct line telephone and fax numbers are 44 953 608131 (tel) and 44 953 608132 (fax).

CONFIDENTIAL.

Lotus and Bugatti US manufacturing and fuel economy data:-