Backup camera mandate boosts suppliers

Edmunds.com says 299 car and truck models on sale in the United States have standard or optional rearview cameras, up sharply from 141 in 2009.
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DETROIT -- The biggest beneficiary of the new federal mandate for rearview cameras is likely to be Magna International Inc., which claims 40 percent of the North American market for the equipment.

Other suppliers such as Delphi Automotive, Gentex Corp., Panasonic Corp. and Valeo S.A. also are poised to profit.

Suppliers also see the mandate driving more business on the horizon. The cameras are another step toward sophisticated safety aids, which the suppliers would produce, that give drivers a 360-degree view around their vehicles.

Automakers are well on their way to meeting this week's mandate for rearview cameras, which calls for the safety device in every new vehicle starting with mid-2018 production.

According to Edmunds.com, 299 car and truck models on sale in the United States have standard or optional rearview cameras, up sharply from 2009, when 141 models were available with cameras.

Declining cost

Cameras now available on the market can easily meet the National Highway Traffic Safety Administration’s performance standards, says Joel Gibson, Magna’s director of image vision systems.

“There is nothing [in the mandate] that isn’t achievable,” Gibson said. “NHTSA has done a lot of research” on camera technology.

Magna began selling rearview cameras in 2004, when GM installed them in the Hummer H2. This year, Magna says it will produce more than 5 million cameras globally, with production expected to top 8 million units in 2018.

The company did not divulge its camera revenue, but NHTSA estimates that rearview cameras will cost $43 to $45 apiece by 2018, excluding the center-stack viewing screens.

The cost of rear cameras has declined rapidly since the 1990s, when automakers began using them. Those first cameras cost $130 to $150 apiece, also excluding the screens.

While the current generation of cameras can meet NHTSA’s performance standards, Gibson predicts they will get rapid upgrades anyway.

That’s because motorists have grown accustomed to high-resolution screens on their smartphones and tablets. “The average person spends five hours a day staring at digital devices,” Gibson noted. “They have expectations of higher color fidelity and resolution.”

Profitable horizon

While the market for rearview cameras is profitable -- and growing -- suppliers expect bigger profits when automakers upgrade their collision-avoidance technology.

Gibson says the cameras would be nice addition to a vehicle’s 360-degree surveillance of potential obstacles. Automakers will want to add features such as pedestrian detection, automated parking, cross-traffic alerts and blind-spot detection.

“Once you have a camera, there is more that you can do with it,” Gibson said. “This is not a new thought for us at all.”

The U.S. Department of Transportation on March 31 finalized the new visibility rules, which apply to all new vehicles under 10,000 pounds. Congress called for the rules in 2008 after a spate of fatal accidents in which parents backed their cars over young children.

Automakers will be required to have compliant rearview systems in 10 percent of the vehicles they build from May 1, 2016, to May 1, 2017. That share rises to 40 percent for the next year and 100 percent starting on May 1, 2018.

You can reach David Sedgwick at dsedgwick@crain.com.


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