EXECUTIVE SUMMARY


    This Preliminary Economic Assessment (PEA) provides an assessment of the costs, benefits, and other impacts of the proposed Federal Motor Vehicle Safety Standard (FVMSS) No. 139, which upgrades the standards for new pneumatic tires for light vehicles.

    Proposed Requirements

    The agency is proposing six tests: an upgrade in the high speed and endurance tests, new test procedures for the bead unseating test and road hazard impact test, and new tests for aging and low tire pressure.

    The agency considered and analyzed in this PEA three alternatives for the high-speed test, three alternatives for the endurance test, and two alternatives for the low tire pressure test. The development of these alternatives has been an evolutionary process examining test results and the potential impact on the tire industry. The agency has decided to propose Alternative 2 of the high-speed test, Alternative 2 of the endurance test and both of the low tire pressure tests for comment. Only one of the low tire pressure tests will be required by the final rule.

    The following table shows our best estimates, based on very limited testing, of the average percent of light vehicle tires (P-metric and LT-tires) that would pass the tests analyzed.


    Percent of Light Vehicle Tires Passing Alternative Requirements

        Alternative 1 Alternative 2 Alternative 3
    High Speed Test   100 88 65
    Endurance Test   100 80 40
    Both Tests   100 67 33
             
    Low Pressure - High Speed 70      
    Low Pressure -Endurance 100      
             
    Combined
    High Speed Test
    Endurance Test
    Low-Pressure -
    High Speed
      70 64 33
    Combined
    High Speed Test
    Endurance Test
    Low-Pressure -
    Endurance
      100 67 33


    Benefits

    Over 23,000 tow-away crashes per year are caused by blowouts or flat tires. There are an estimated 414 fatalities and 10,275 injuries in these crashes. The benefit of this proposed rule is to increase the strength, endurance, and heat resistance of tires.

    It appears from the limited testing the agency has performed on tires, that about one-third of all tires would fail the proposed tests in this NPRM. The agency estimates that the benefits of the proposed alternatives for the high speed and endurance tests are 27 lives saved and 667 injuries reduced annually when all tires on the road meet the proposed requirements.

    Not all benefits could be quantified. The agency believes there will be other benefits that could not be quantified currently from the aging test and overloading of vehicles and that there could be benefits from the low tire inflation test, the upgraded road hazard test, and the de-beading test.

    Anticipated Costs

    The agency believes the proposal (Alternative 2 for high-speed and endurance) will result in some P-metric tires with UTQGS grades of C and B for temperature resistance and some light truck LT tires being redesigned or taken off the market. These tires are typically the lowest priced tires on the market. The price increase for these tires is difficult to estimate. The agency's preliminary estimate is an increase of $3 per tire for those tires that fail the proposed high speed and endurance tests.

    For the proposed Alternative 2 for high-speed and endurance, the average new vehicle price increase is estimated to be $4.09 per vehicle. There are an estimated 287 million light vehicle tires sold per year. Included in this estimate are new vehicle tire sales and aftermarket tire sales, but excluding temporary spare tires, which we are not proposing have to meet the proposed tests. We estimate that 32.8 percent of these tires would have a $3 price increase per tire. Thus, the total annual cost is estimated to be $282 million.

    If Alternative 3 for high-speed and endurance were chosen, the average cost increase per tire is expected to be much higher.

    Based on our limited testing, production variability may be the biggest problem for the manufacturers, requiring them to change tire designs to make sure that they will pass the required tests. In several of the tire models we tested, four of the five tires of a specific model passed the test, but the fifth tire failed.

    Lead Time

    The agency is proposing to make the requirements effective September 1, 2003, for P-metric tires, and September 1, 2004 for LT tires. An alternative three year phase-in schedule is also being considered: 50 percent of P-metric tires by September 1, 2003, all P-metric tires by September 1, 2004, and all LT tires by September 1, 2005.