U.S. Backup Camera Mandate Spurs Car Sales

January 5, 2011

A proposed requirement from the U.S. Department of Transportation calls for all new motor vehicles weighing less than 10,000 lb. sold in the U.S. to incorporate rear-view park-assist cameras by 2014.

El Segundo, CA -- A proposed mandate from the U.S. Department of Transportation will cause sales of new cars with rear-view park-assist cameras in the country to quadruple, compared with previous expectations, during the next seven years, according to the market research firm iSuppli, now part of IHS Inc.

The mandate calls for all new motor vehicles weighing less than 10,000 lb. sold in the U.S. to incorporate backup cameras by September 1, 2014. The cameras are designed to eliminate blind spots behind cars that contribute to backover collisions.

Because of this, all new cars sold in model year 2015 are expected to include rear-view park assist cameras, up from iSuppli's previous forecast of only 20%.

iSuppli now projects that from 2011 through 2017, 71.2 million new cars in the U.S. will be sold with rear-view cameras for park assistance. The pre-mandate forecast predicted only 19.1 million for the same period.

With the U.S. market beginning to accelerate dramatically in 2012, sales will rise 119.9% to 2.8 million units, up from 1.3 million units in 2011. Sales then will increase by 117.4% in 2013 to reach 5.98 million, and will climb another 91.1% in 2014 to hit 11.4 million. By 2017, a total of 17.1 million cars, representing the entire estimated new-vehicle fleet, will be sold with rear-view cameras in the U.S.

The proposed mandate is not finalized and still could undergo changes by the time it's completed on February 28, 2011. As a result, any changes will impact iSuppli's forecast.

"Crashes that occur when cars are backing up represent a relatively small but avoidable cause of death, injury, and trauma in the United States every year," said Jeremy Carlson, analyst for automotive research at iSuppli. "While the adoption of ubiquitous rear-view cameras is expected to be very costly for automakers, the technology promises to dramatically reduce such backover accidents, which disproportionately impact the very young and the very old. The mandate also will benefit suppliers of advanced driver-assist systems electronics, particularly those that make small displays, camera sensors, and related equipment."

Backup Statistics
On average, 292 fatalities and 18,000 injuries result from backover crashes annually in the U.S., according to the U.S. National Highway Traffic Safety Administration (NHTSA). Of those, 228 fatalities and 17,000 injuries involved light vehicles, such as passenger cars, light trucks, sports utility vehicles, and vans that are included in the less than 10,000 lb. weight category.

Children younger than five years of age account for 44% of these backover fatalities each year. Elderly persons more than 70 years old represent about 33% of backover deaths.

Costly Cameras
The rollout of rear-view camera technology on the massive U.S. automotive fleet will be costly. NHTSA estimates that a rear-view camera system will cost from $159 to $203 when installed on a vehicle without an existing display. For vehicles with adequate displays available, such as in 88% of 2010 models, according to iSuppli, the price per vehicle drops to $58. NHTSA estimates the total incremental cost to equip the U.S. vehicle fleet of 16.6 million will range from $1.9 billion to $2.7 billion.

Supplier Benefits
Among automotive electronics suppliers, several are expected to benefit from the camera mandate, with Gentex Corp. leading the way. Gentex offers small 2.4- or 3.5-inch displays, integrated into interior rear-view mirrors. These are likely to be attractive options for carmakers that need to install rear-view cameras on low-end models that don't already have an in-vehicle infotainment or navigation display available.

Low-cost navigation system suppliers, such as Bosch Group, Denso Corp., and others, likely will compete among themselves, as well as with Gentex, to bring inexpensive solutions to this same entry-level segment.

Furthermore, camera sensor and related suppliers are well positioned. Companies such as Panasonic Corp., Alpine Electronics, Sony Corp., Valeo, Hella Inc., and others will benefit from a sizable increase in total available market because every new vehicle will require a camera sensor.

To learn more about this topic, see Carlson's ADAS Technology Availability Calculator on iSuppli's ADAS Portal.

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