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 second of a two-part series, Siegfried Mortkowitz reports.
Drivers who do not activate the Contran 245 module will still benefit from a second service, which was added at the insistence of the Brazilian Justice Department: autonomous blocking. This means that a driver can report his car stolen, and the vehicle will be disabled, but not tracked. “This is stupid,” says Antonio Calmon, CEO of Kaitech Consulting. “The car will be left somewhere, but no one knows where.”
According to Christiano Blume, LAM host manager,strategy & portfolio management, for Volvo Group Telematics, the key to activation is the added value and bundling offered by OEMs. “If you make a good offer to the customer, you can promote the activation,” he says. “This is good for us, it’s good for the government, and it gives additional benefits to the customer. It’s a win-win situation.”
Telit’s Cyril Zeller also criticizes the Contran project as being too limited and inflexible in scope. “What’s the business model?” he asks, adding that Contran 245 is “a fantastic opportunity, on paper [because] this should be able to be leveraged with all sorts of telematics verticals; you can do traffic, connected navigation.”
(See also Contran 245 (finally) ready to go? Part I.)
Contran 245, simple and limited
But the project, Zeller says, is “all coming down to one specific need without being able to build telematics verticals. It’s a terrible limitation…. It doesn’t have flexibility.”
As an example of this limitation, Zeller posits a fleet owner concerned with vehicle theft. “In addition to the Contran tracking device, I’m going to need a second device for fleet management,” he says. “I’m much more likely to go after some service that will offer both.”
Calmon says the requirements of Brazilian law forced the designers of the project to devise something very simple. “So the specifications are very simple,” he says. “The law only says that we have to protect the vehicle. That’s the only mandate.”
However, the Contran module’s protocol, ACP 245, allows car makers to add their own protocols, opening up the device to proprietary add-ons and enabling them to use their own service providers.
“In regards to the technology, there was a big change in the car manufacturers’ understanding of this project,” Calmon says. “Almost 100% [of them] are working on the 2nd generation, and some on the 3rd generation and including 4G as part of the spec.”
He says that one European car manufacturer, whom he declined to name, is already planning to have its own protocol within the Denatran protocol.
“So, if you buy a car from [this OEM] and sign up with its protocol, it can give you 300 more features,” he says.
Adding value to make money
Some car manufacturers are already planning to offer several add-on services, such as remote diagnostics and warranty management, Calmon says. “Car manufacturers now realize they can make money on it.”
For example, several OEMs are tentatively planning to offer the Contran tracking service for free for the duration of the warranty period if the customer agrees to add remote diagnostics. The only cost to the car buyer of the Contran tracking service would then be the amount it added to the sticker price.
“This is something the car manufacturers are doing for themselves, not for the customer,” Calmon says. “It becomes revenue for them. If they can prevent critical damage to the car during the warranty period by repairing minor damage, it can save them a lot of money.”
In addition, he says, since warranty fraud is very common in Brazil, with many car owners manipulating odometers, warranty management can be very beneficial to OEMs.
The Volvo way
Blume says Volvo will be offering a three-year free subscription of the service with some additional services, such as remote diagnostics, tacked on. “We are totally in favor of [Contran] since it offers the possibility to have standard-fitted telematics device in all vehicles,” he says. “We’re anxious to have [Contran] enforced. We are waiting for the introduction to leverage our offer.”
Volvo is planning to launch its new, top-of-the-line FH trucks soon in Brazil (as well as other Latin American countries), with a number of added services leveraged, including its popular Dynafleet system, which includes fuel consumption and environmental impact data.
Although Blume was reluctant to discuss specifics ahead of the truck’s commercial launch, he says the package will also include “secured uptime from Volvo. And if the customer follows the rules, then Volvo assumes the costs and responsibilities of unscheduled stops.”
Blume has no doubts that the impact of Contran 245 implementation will be extremely positive.
“It will turn Brazilians into telematics fans,” he says. “Given the level of vehicle production, it will become the biggest telematics market in the world, volume-wise. It will be a revolution.”
(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/China 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.