Italian exotic car maker Pagani has encountered a roadblock in its plan to enter the US market.  Acclaimed for its ultra-fast, ultra-powerful, ultra-light, and ultra-exclusive Zonda models which have not been sold in the US, Pagani sought to bring its new Huayra to the single most lucrative supercar market.  The Huayra raises the already stratospheric performance and price points to new heights.  At an estimated $1 million, the 700-hp, 220-mph Huayra competes in the rarefied arena reserved for cars like the Bugatti Veyron and the Lamborghini Reventon.  But NHTSA has refused to grant Pagani an exemption from the advanced airbag requirement in FMVSS 208.  NHTSA sometimes grants such exemptions to automakers who plan to sell only a few cars, and has done so in cases of, for example, some Lamborghini, Tesla, Panoz and Koenigsegg models.  The Huayra would seem to qualify easily under that criterion, since Pagani's limited production capacity allows it to plan to sell no more than 6-12 cars in the US.  But NHTSA was not convinced that Pagani would suffer undue financial hardship by complying with the advanced airbag requirement. Pagani petitioned for a temporary, two-year exemption to bridge the gap until it produces a fully-compliant Huayra.  NHTSA was not swayed by Pagani's plea that, without the exemption, Pagani would lose 34 million Euros in gross revenues and over 3 million Euros in net revenues, would not be able to enter the US market until 2015, and would be forced to postpone construction of a new factory which is needed to increase the company's production capacity.  NHTSA concluded that the substantial financial hardship threshold was not met because Pagani still projected to earn a profit, although the cost of compliance would result in short-term losses.  Pagani says the Huayra's US debut will be delayed until 2013.

Revealingly, in denying Pagani's petition, NHTSA commented that it would evaluate requests for exemption more critically from now on because the advanced airbag requirement has been in place for more than 10 years (and almost five years for small volume manufacturers).  NHTSA concluded:  "Given the passage of time since the advanced air bag requirements were established and implemented, and in light of the benefits of advanced air bags, NHTSA has determined that it is not in the public interest to continue to grant exemptions from these requirements in the same circumstances and under the same terms as in the past."  NHTSA's decision can be found here. 

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Categories: Automotive | Product Liability | Recalls

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Ferraris Recalled: May Burst Into Flame

Posted on September 3, 2010 02:25 by Roman Lifson

Ferrari announced that it is recalling 1,248 of its recently introduced 458 Italias (303 of which are in the US) due to a risk that the glue securing a wheel arch lining and heat shield will melt and ignite.  Since the 458's release, there have been five reports of fires from customers in the US, France, Switzerland, and China.  The fix simply replaces the glue with metal rivets.  The 570-horsepower, 202-mph 458 replaces Ferrari's highly regarded F430.  The article also mentions that some owners repaired the vehicles for this problem prior to the recall and may be eligible for reimbursement from Ferrari.  What are the company’s obligations toward these reimbursements?

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Categories: Recalls

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