Contran 245, Brazil's ambitious plan to stem rampant car theft by having all vehicles equipped with tracking devices, appears good to go, finally. Now what? In the first of a two-part series, Siegfried Mortkowitz looks ahead.
Light appears to have been spotted at the end of the long and winding tunnel leading to the implementation of Brazil’s Contran 245 project, the country’s ambitious plan to have all the vehicles on its roads equipped with tracking devices in order to curtail rampant vehicle theft.
“It seems that June was the last delay in the system implementation,” says a wary Antonio Calmon, who wrote the system’s technological specifications. “The Denatran [National Traffic Agency] system is up and running, and all players have agreed to participate in the assisted operation and are committed to start in January.”
Calmon is also CEO of Kaitech Consulting, which currently advises six Brazilian and three foreign auto manufacturers on implementing the system’s technological specifications. In addition, Calmon has been advising Russian authorities on deploying the long-delayed state-mandated ERA-GLONASS accident emergency response system.
He prefers to use the acronym Denatran for the project, explaining that Contran, the National Transport Council, is the Brazilian government body that takes strategic decisions on traffic management while Denatran, the National Transport Agency, is responsible for implementing them.
At the end of June, the Brazilian government announced a new deadline for the implementation of the much-delayed Contran 245.
Come the start of 2014, 20% of all new cars, vans, trucks and utility vehicles produced for the Brazilian market must be equipped with the Contran 245-specified tracking device. On Aug. 30, 2014, that number jumps to 50%, and to total implementation as of Dec. 31 of next year. The schedule varies for tractor-trucks, semi-trailers, mopeds and motorcycles.
However, the announcement also hedges its bets somewhat by declaring that an “additional period of six months may be required to start production of vehicles pursuant to the provisions of this Resolution, after which production will cover 100% of the vehicles.”
(For a regional telematics perspective, see Telematics and the connected car in LATAM.)
Hurry up and wait
The many delays in implementing the project — at least 10 of them — have provoked more than just hand-wringing and head-scratching among manufacturers eager to participate in the project.
According to Roger Lanctot, associate director for automotive multimedia & communications service at Strategy Analytics, car manufacturers will be keen to avoid being too hasty in implementing the mandate for fear of having to go back to square one yet again.
“It’s taken so long that a lot of the boxes have been rendered obsolete,” he says. “Because of the delays, OEMs have to go back to the drawing board. This creates supply chain disruptions.”
“Everybody is in idle now,” says Christiano Blume, LAM host manager,strategy & portfolio management, forVolvo Group Telematics. “We are waiting to see if it will be enforced.”
Volvo Cars has been the only manufacturer to implement the Contran 245 device as part of its OnCall telematics service, starting in 2011.
According to Calmon, the delays were caused by two powerful institutions — ANFAVEA, the National Association of Vehicle Manufacturers, and Anatel, the Federal Telecommunications Agency.
“The complexity of getting the project off the ground came from the justice system because ANFAVEA repeatedly raised complaints,” he explains. “They were 100% against it because they did not want to add any costs to the price of a car. Every other week, the Justice Department asked us to stop the implementation because we were doing something wrong.”
Anatel also threw up significant roadblocks because, Calmon says, the project “goes against the principle of Anatel that the end user selects the service provider.”
Calmon says he responded to that complaint by creating a “generic SIM card, SIM 245, which has 30 different slots which can be programmed by 30 different carriers ‘over the air’. So now the end user selects the service provider when purchasing the car.”
However, in order to make that feasible, he says, Denatran had to create its own telecom infrastructure, similar to that of real service providers, with the exception of a billing service.“Denatran acts as a telecom provider until a real provider is selected,” Calmon says.
Lanctot of Strategy Analytics fears that because of the many delays many car manufacturers will probably ignore the first, or 20%, threshold of the Contran 245 production fitment rollout schedule and will wait for the next threshold, where 50% of new cars must carry the device.
Proceed with caution
Cyril Zeller, senior sales director, telematics, at Telit says that the regulation is severely flawed in that it mandates installing the Contran device, but does not make it mandatory to activate it. “According to a survey I’ve seen, only 4% or 5% of people intend to activate the device,” Zeller says.
One reason for the low number is that there are already stolen vehicle recovery (SVR) services being sold in Brazil. “They are not sure they want to be bothered with Contran,” Zeller notes.
Calmon explains that the reason the law does not enforce activation is that it is “forbidden, by law, to create any kind of [mandatory] charge to a customer.” And while he does not dispute that the low number is accurate for what he calls “independent drivers,” he maintains that the real number of those activating the Contran service will be significantly higher.
“Almost 100% of low-entry vehicles sold in Brazil are financed,” he says. “And the finance companies are going to activate the module because they want to know where the car is in case of non-payment.”
In addition, some 22% of these low-entry cars are insured, “and the insurance companies are going to activate it,” Calmon says. “Insurance companies already buy the equipment and have it installed. That will happen with the Contran module as well.”
He puts the number of new cars that will have an activated Contran 245 device at about 20% after full Contran implementation has been reached. “Since our production rate is about 5.1 million to 5.3 million new vehicles a year, about 1 million vehicles will have activated modules every year,” he predicts.
Currently, he estimates the number of cars on Brazil’s roads at about 56 million, and the number of vehicles already equipped with a tracking device at about 2.3 million.
(For more on telematics in Brazil, see Telematics in Brazil: Security for cars and cargo, part I and Telematics in Brazil: Security for cars and cargo, part II.)
Siegfried Mortkowitz is a regular contributor to TU.
For all the latest telematics trends, check out Insurance Telematics USA 2013 on Sept. 4-5 in Chicago, Telematics Brazil & LATAM 2013 on Sept. 11-12 in Sao Paulo, Brazil, Telematics Japan 2013 on Oct. 8-10 in Tokyo, Telematics Munich 2013 on Nov. 11-12 in Munich, Germany, Telematics for Fleet Management USA 2013 on Nov. 20-21 in Atlanta, Georgia, and Content and Apps for Automotive USA 2013 on Dec. 11-12 in San Francisco.
For exclusive telematics business analysis and insight, check out TU’s reports: Telematics Connectivity Strategies Report 2013, The Automotive HMI Report 2013, Insurance Telematics Report 2013 and Fleet & Asset Management Report 2012.
September 2013, Sao Paulo, Brazil
Telematics LATAM 2013