NHTSA Delays Final Rulemaking On Backup Cameras

The National Highway Safety Administration has postponed its final rulemaking on whether to require backup cameras on all vehicles by Sept. 2014.

The final ruling was expected to be released Feb. 28. NHTSA proposed the rule in December and gave the public two months to comment.

"The public comment period on this safety proposal only recently closed, and NHTSA will be asking Congress for additional time to analyze public comments, complete the rulemaking process and issue a final rule," the agency said in an emailed statement, reported Automotive News.

It did not say how long the delay would last.

NHTSA estimates about 18,000 people a year are hurt in back-over accidents, with about 3,000 suffering "incapacitating" injuries. The agency said 44 percent of the incidents involve children under age 5.

If enacted, the ruling could generate as much as $2.7 billion in revenue to suppliers of backup-camera components, the administration said in its initial report.

One such supplier is Gentex Corp., which provides rear- camera display mirrors to 59 vehicles sold by Ford, General Motors, Toyota and other automakers.

R.W. Baird analyst David Leiker has said the Zeeland, Mich., supplier has "nearly 100 percent" of the market for rear-camera display mirrors. He said in-mirror monitor displays could spread to lower-priced vehicles that don't have video displays already installed, because "the consumer prefers it in the mirror."

In response to the delayed ruling, Brett Hoselton, a senior automotive analyst with KeyBanc Capital Markets, issued a hold notice on Gentex stock. A hold indicates the stock is expected to remain steady for the next 6 to 12 months.

Following NHTSA's original proposal, Gentex stock jumped 17 percent to $26.89 on the Nasdaq Stock Market and it has continued to rise. The shares closed Friday at $30.65, up 23 cents from where they opened.

"The reason for the delay is the large number of comments (approximately 200) that made it not feasible to work through in the original timeline," Hoselton said in a statement.

He said he expects the rule to be tweaked to include testing for illumination at night and the time it takes the picture to appear on the display. Overall, though, he said there shouldn't be any major changes that would cause the ruling to be enacted later than September.

NHTSA did not specify the position of the camera display. Most current systems connect to either a console display, such as those used for navigation systems, or a small screen embedded in the rearview mirror, such as Gentex's products.

The agency says the cheapest option is to connect the camera to a vehicle's existing video screen at a cost of $58 to $88. Equipping a vehicle that doesn't already have a screen would cost $159 to $203, NHTSA said.

To meet the requirements of the proposed rule, NHTSA said, 10 percent of new vehicles must comply by Sept. 2012, 40 percent by Sept. 2013 and 100 percent by Sept. 2014.