Vehicle theft is a significant problem in the Brazilian market and thefts have been at a high level for a number of years. Violent thefts, such as hijackings, are commonplace in some areas of the larger cities.
In response to the situation, the Brazilian government announced in July 2007 that it would mandate the production-line fitment of tracking systems to all new vehicles from August 2009.
Telematics and ITS Senior Specialist, Paul Burnley explains the current situation as this deadline looms.
Q: Since the 2007 announcement that tracking systems would be mandated to all new vehicles, there has been considerable public debate about this legislation. What does the situation look like now in Brazil?
Paul Burnley: The Brazilian government seems determined to try and enforce this legislation, despite suffering a recent setback when the Federal Court ruled in April that the proposed implementation of vehicle tracking was unlawful due to the possibility that information about a vehicle’s movements could be obtained without the consent of the owner.
The government has appealed this decision. But if the mandate is not to be delayed further, then a more likely course of action is the legislation will be amended so this right of privacy is not infringed. This would require a new resolution to be issued.
Since the legislation was first announced, there have been several legal bids to try and cancel the mandate. Whilst the government remains committed to mandating tracking systems, it is still possible that they will be defeated by one of these bids. It would not be the first time that legislation was cancelled at a late stage in Brazil.
Q: What are the potential, new deadlines for having tracking fitted on vehicles in Brazil?
PB: The current plan is from 1st August 2009, there will be a 6 month ‘trial’ period where all manufacturers must evaluate their tracking and remote immobilisation systems on a small fleet of vehicles. Then, by 1st February 2010, tracking systems must be fitted to 20% of all cars produced, ramping up to 100% of production by 1st October 2010. The rollout for other types of vehicles (e.g. motorbikes, trucks) differs.
Although participation in this trial period is optional, if a car manufacturer chooses not to participate it must start fitting tracking systems to 20% of production straight away – however it remains to be seen if this could be enforced at the current time given the ruling from the Federal Court.
Q: How does the automotive and tracking industry obtain the requirements demanded by the Brazilian government?
PB: SBD has a report available entitled “Car theft trends and vehicle tracking requirements in Brazil” which details the requirements and approval process for line-fit and aftermarket tracking systems.
This contains the National Traffic Department's (DENATRAN) approval process by which vehicle manufacturers, system suppliers and both infrastructure and service providers must demonstrate their conformance with the new regulations. It also incorporates the technical requirements applicable to the in-vehicle hardware which were written by DENATRAN following consultation with vehicle manufacturers.
SBD plan to provide a fully updated report of the latest situation by September 2009.
Q: If the legislation doesn’t come into effect as planned, then does that mean the investment by suppliers and vehicle manufacturers to meet Brazilian requirements would all go to waste?
PB: Hardware suppliers and service providers have been gearing up to meet the anticipated market demands. In particular, some suppliers have developed in-vehicle hardware that can be produced at low cost, based on gaining a significant share of the 2.5 million new vehicles sold per year in Brazil.
Even if the legislation doesn’t go ahead, some of these suppliers can be expected to use the experience gained to offer these telematics platforms to manufacturers in other markets at a price significantly lower than that of current systems.
This is likely to lead to intense pressure for cost reductions for the next generation of telematics systems. It may also enable vehicle manufacturers to adopt different business models for telematics, perhaps moving away from traditional high cost optional fitment to standard fit systems where the revenue comes from subscription services.
To further understand the impact this legislation has on your business, register your interest in SBD’s updated report on the Brazilian tracking situation by contacting Juanita Appleby on jappleby@sbd.co.uk.
