With Brazil’s automotive market in the midst of a deep swoon, the industry got one tiny bit of good news this week: the Contran 245 mandate was suspended effective Oct. 20. The news broke in the middle of the Telematics Brazil & LATAM event in Sao Paulo and appeared to have caught some attendees and presenters at the event by surprise.

The former head of Denetran, which is part of Brazil’s Federal Department of Transportation, spoke on the day before the announcement as if all was proceeding as planned toward a January 2016 implementation deadline.  This, in spite of the fact that the suspension was decided on Oct. 15th.

Brazil’s Contran 245 mandate was intended to require the fitment of a tracking and immobilization device on personal cars, trucks and motorcycles in Brazil for the purposes of mitigating a long-term vehicle theft crisis impacting vehicles of all kinds. Contran 245, passed by the Legislature in 2009 and delayed more than 10 times, cost the industry a collective $100M or more in hardware, software, and service development costs and was long held in dim regard by auto makers and their suppliers.

In a pre-event survey of industry executives, Strategy Analytics found that two-thirds of respondents felt that the legislation would “never” be implemented and 60% said they did not think it was a good idea. While several car companies laid plans for implementing the program and developed hardware and software and conducted testing, others more or less ignored the mandate never believing it would reach the market.

The mandate fell victim to changing wireless network protocols and requirements and the obsoleting of older modules during the multiple-year delay process. Of course, auto industry foot-dragging and lobbying efforts combined with the daunting technical challenges brought about the ultimate failure of the legislation.

The Contran 245 device, though universally loathed, did introduce, for the first time, the concept of customer selection of service provider. This concept would be the equivalent of a GM OnStar customer choosing AAA to receive his or her emergency calls, rather than OnStar.

This radical concept lives on in the eUICC reprovisionable modem standard which enables the switching of wireless carriers and also predates European efforts to enable service provider selection proposed under the aegis of Ertico’s Mobinet initiative. Ultimately, the concept of the government installing a tracking device and the implied privacy intrusion proved to be a sticking point that legislators could not stomach.

Contran 245 died amidst a flurry of proposed bills highlighting the privacy intrusion and other objections. But these privacy concerns were more likely a smokescreen for the influence of auto industry lobbyists.

A much greater concern for Brazil’s auto and commercial vehicle industry is the 32.5% decline in new vehicle registrations for Sept. 2015 (year-over-year) and 40.5% decline in sales of commercial vehicles for Sept. 2015 YOY only slightly mitigated by a 12.3% increase in passenger vehicle exports (to 293K), while commercial vehicle exports fell 26.2% (to 7.8K). Commercial vehicle production in Brazil is down 29.9% YOY and passenger vehicle production is down 42.1%. All figures care of ANFAVEA.

In the end, Contran 245 helped:

• Put Brazil on the connected car map
• Set off a competitive land grab for the potential module business which produced a precipitous halving (or better) of the cost of automotive telecom modules
• Elevated Brazil as a priority market for sales and business development in the automotive industry.

The elevated interest in Brazil coincided with the country’s emergence as one of the fast-growing BRIC’s markets.

Unfortunately, Brazil has since fallen back from its lofty growth trajectory (as has Russia, another BRIC’s component) and the heightened awareness of Brazil’s market drew attention to challenging highway infrastructure issues and the quality of vehicle design and fabrication in Brazil. Brazil may no longer be the fourth fastest growing automotive market, but it remains the third largest contributor globally to annual highway fatalities.

Perhaps the shift in focus from Contran 245 will enable a recalibration of priorities toward safety. The decline of Contran 245 has cleared the way to the onset of new embedded telematics programs, with OnStar most recently joining Volvo and BMW with connected car offerings in Brazil.

At the same time, smartphone connectivity is just beginning to take hold in Brazil with Hyundai’s CarLink system in the vanguard along with Renault’s new MediaNav Evolution joining Ford’s MyFord Touch and GM’s MyLink. With Contran 245 out of the way, car makers are free to focus on more customer-oriented solutions capable of producing profitable business opportunities.

A similar scenario is unfolding in Europe where the emergency call (eCall) mandate has passed the European Commission on its way to implementation. The eCall legislation, mandating an OnStar-like automatic crash notification system, also saw its share of delays and technical glitches, including the ultimate creation of a new “dormant SIM” standard to prevent the pinging of wireless networks by eCall-capable SIMs.

Battles continue to be fought in the EU over privacy and access to eCall-related data for independent repair shops, insurance companies and automobile clubs. As in the case of Contran 245, the EU is mandating dated technology which will be hopelessly backward in an IoT-enabled world. While the eCall implementation effort stimulated thinking with regard to permanently connected cars, the involvement of government authorities in mandating this technology has rendered it largely unpalatable, unfamiliar and largely uninteresting to consumers while slowing connected car development at auto makers.

Perhaps the U.S. Congress and Department of Transportation can take a lesson from these overseas efforts and keep their regulatory paws off of the auto industry when it comes to connectivity in the U.S. Regulatory bodies are poorly equipped to lead wireless technical developments and should be prevented from mandating wireless technology of any kind.