Backup Camera Rule With $2.7 Billion Cost Delayed Again by U.S.

The Center for Auto Safety is the nation’s premier independent, member driven, non-profit consumer advocacy organization dedicated to improving vehicle safety, quality, and fuel economy on behalf of all drivers, passengers, and pedestrians.

By Angela Greiling Keane – Feb 29, 2012
A U.S. rule that may require all cars and light trucks sold in the country to have rear-view cameras won’t be issued by today’s deadline and may be delayed until after November’s presidential election, regulators said.

A 2008 auto-safety law signed by President George W. Bush mandated the Transportation Department to issue the requirement by the end of 2011. It’s now being pushed back a second time by Transportation Secretary Ray LaHood and will be issued by Dec. 31, the department said in an e-mailed statement yesterday.

“If we have a strong safety agenda, then we have to deal with the issue of people injuring or killing children as a result of backover accidents,” LaHood said yesterday in an interview. “We want to make sure we have a good rule.”

The proposed rule, estimated to cost $2.7 billion, was listed as one of the five most expensive pending U.S. regulations in an Aug. 30 letter President Barack Obama sent to House Republican leaders. Requiring backup cameras would add $58 to $203 to the cost of a vehicle, depending on the model and whether it already has a video screen, the U.S. National Highway Traffic Safety Administration has said.

“While the department has made progress toward a final rule to improve rearward visibility, it has decided that further study and data analysis — including of a wider range of vehicles and drivers — is important to ensure the most protective and efficient rule possible,” the agency said in its statement.

Gentex Benefit

The rule may save about 146 lives a year by improving rear visibility of vehicles, NHTSA estimated in 2010 when it issued a proposed rule. While the law doesn’t explicitly require a rearview camera, no other technology currently meets the standard.

Back-over accidents cause 292 U.S. deaths annually, most frequently killing children and the elderly. At a cost of $2.7 billion a year for an annual fleet of 16.6 million, the regulator’s highest estimate, each life saved would cost $18.5 million.

The rule will benefit Gentex Corp. (GNTX), a maker of rearview mirrors that include camera displays, David Leiker, a Robert W. Baird & Co. analyst, said in a Dec. 28 report. Gentex, based in Zeeland, Michigan, may have revenue growth of as much as 20 percent on shipment growth of as much as 14 percent spanning three to four years, Leiker said in the report. He recommends buying Gentex shares.

The company, which reported $1.02 billion in revenue in the year that ended Sept. 30, competes against Magna International Inc. (MG) as well as makers of systems that display images from backup cameras in navigation systems.

Gentex rose 4.5 percent to $27.64 at yesterday’s close in New York. The shares have slid 6.6 percent this year.

Two Deaths

Fifty children are backed over each week on average, and two are killed, according to, a Leawood, Kansas- based group that advocates a camera requirement. Seventy percent are backed over by a parent or other close relative, with 1- year-olds being the predominant age, according to the group’s data.

Automakers through the Alliance of Automobile Manufacturers, whose members include General Motors Co. (GM) and Toyota Motor Corp. (7203), criticized the proposal issued in December 2010, saying a single standard doesn’t make sense because bigger models have larger blind spots.

Backup cameras are standard on 45 percent of 2012-model vehicles sold in the U.S., according to data compiled by, a Santa Monica, California-based website that tracks automotive sales.