NEW YORK (CNNMoney) -- Italian automaker Pagani was to begin selling its $1 million, 700 horsepower Huayra supercar in the U.S. later this year but federal safety regulators have said "Not so fast."
Pagani had applied for an exemption from federal auto safety rules requiring child-safe "advanced" airbags, arguing that complying with the rule would have caused "substantial economic hardship," according to documents from the National Highway Traffic Safety Administration.
NHTSA denied the request, essentially blocking the car from sale in the U.S., because Pagani failed to show that installing the airbags on the twin-turbocharged 12-cylinder carbon-titanium car would cause the company undue financial strain. Also, the Italian carmaker didn't show that serious efforts had been made to comply, the agency said.
The auto safety agency sometimes grants temporary exemptions from specific safety rules, especially for automakers that plan to sell only a small number of cars.
Pagani created the Huayra as part of the automaker's plan to break into the U.S. market. The car was engineered and crash tested to meet safety standards in both the U.S. and Europe, the automaker had said in February.
Unlike Lamborghini which is owned by Volkswagen (VLKAF) and Ferrari which is part of Fiat (FIATY), Pagani is a small independent automaker. With a total of only 60 employees, Pagani's small factory can only produce so many of the largely hand-built cars.
Initial deliveries in the U.S. were to be limited to about five cars a year during 2012, the automaker said in February. After that, a planned factory expansion would allow for sales of as many as 10 cars a year here.
Pagani says it made the request for an exemption three years ago but the decision from NHTSA came just as Pagani was preparing official unveiling ceremonies in the U.S., the first of which took place in Los Angeles last Thursday.