Will Brazil’s law requiring all new vehicles to be fitted with antitheft devices finally be implemented? Jerri-Lynn Scofield reports
Brazil’s CONTRAN 245 resolution requires all new vehicles—trucks, autos, motorcycles—to be fitted with an antitheft device, creating an additional five million connected vehicles per year. The law is intended to reverse Brazil’s status as a carjack capital and to lower its sky-high vehicle insurance rates. (For more on cargo tracking, see Telematics in Brazil: Ensuring security for cars and cargo.)
Past solutions—crude tracking devices lacking an effective back office—proved “not scalable and highly unreliable,” says Roger Dewey, founder and CEO of consulting firm M2MV. The new requirements apply from January 15, 2012. By January 15, 2013, all vehicles must have embedded antitheft devices.
The Brazilian government is also discussing adopting another anti-theft measure, the Sistema Nacional de Identificação Automática de Veículos (SINIAV). This initiative would require the installation of a radio-frequency identification (RFID) tag in every vehicle. The tag would include all vehicle information, from owner data to current status of vehicle taxes. With no final regulation yet issued, though, the implementation date is uncertain.
The SINIAV system could be used to establish ownership and compliance with licensing and taxation requirements. It could also support further applications, such cash-free payment of tolls, differential road use pricing and other road use taxes. But RFID chips are also vulnerable to cloning, and the system could—at least in theory—be vulnerable to car-centered identity theft. Research is under way at the Wernher von Braun Center for Advanced Research, a Brazil-based engineering non-profit, to minimize this threat.
Privacy considerations nearly scuppered the CONTRAN 245 law, so whether the SINIAV system ever comes to fruition is uncertain. Some executives are skeptical that even CONTRAN 245 will be implemented on schedule. The situation is “complicated at the moment,” says Marco Russo, CEO of Altea, Brazil.
Moreover, Dewey suggests that the mandatory installation of the devices as original equipment will not be the goldmine some anticipate. “A decree looks like instant market share,” he says, “but people will only pay the barest minimum for something you’re shoving down their throats.” Carmakers, he suggests, are looking to pay the lowest price because there is still widespread resistance to the plans. Plus, automakers cannot tie consumers to a particular service provider; it’s up to them to decide which service to purchase.
Whatever the political and policy considerations, technological issues are unlikely to stall implementation of CONTRAN 245, at least not at the OEM level. SIM cards, for example, have traditionally been tied to a particular operator, via the Home Locator Record (HLR) system. Brazil has now created a government SIM card HLR that works with any provider, a unique solution to the problem of which SIM card to use with the in-car tracking device.
But while the technical system has been extensively tested and is reportedly ready, wireless operators and Denatran, the relevant government organization, may not yet be fully prepared. “No one knows when [wireless operators] will have the necessary hardware and software in place,” says Paulo Higuchi, sales and marketing manager, Altea, Brazil. Enforcement remains uncertain, too, especially as it is unclear whether Denatran will have the necessary staff in place.
Public resistance is still a factor, too. The law provides the opportunity for consumers to buy tracking and monitoring services at low prices, with no installation costs, because the price of the module is included in the car. But consumers don’t necessarily want the devices in the first place and some regard the additional cost as a hidden tax.
Insurers also have objections to current implementation plans, even though they stand to be among the biggest beneficiaries. Insurers are concerned that the way OEMS are expected to install the devices could make them easy for thieves to locate and deactivate. Instead, “insurance companies themselves want to install the modules,” says Higuchi, as they believe their installations would more effectively thwart car thieves.
Despite previous setbacks, though, there’s optimism that this time CONTRAN 245 will work. “I’m pretty confident this time it will really happen,” says Cileneu Jose Peres Nunes, technology vice president at Zatix, one of Brazil’s largest vehicle tracking companies. (For more from Zatix, see Zatix: “The biggest impact is the online vehicle”.)
Jerri-Lynn Scofield is a regular contributor to TU.
For more on telematics in Brazil, see Telematics in Brazil: Is it for real this time?, Telematics in Latin America: Getting ready for infotainment and Emerging telematics opportunities in Brazil.
For more on the growth of telematics in Latin America, join the sector’s other key players at Telematics Brazil & LATAM 2011 on September 19-20 in Sao Paulo.
For more on telematics and insurance, check out Insurance Telematics USA 2011 on September 8-9 in Chicago.