March 31 (Bloomberg) -- The U.S. Transportation Department issued a long-delayed rule that will require automakers to build rear-view cameras into new cars by May 2018.
Gentex Corp., the Zeeland, Michigan-based maker of rear-view visibility systems, rose as much as 3.5 percent, the biggest intraday rise since mid-December.
The U.S. was three years overdue in issuing one of the most expensive pending rules identified by President Barack Obama’s administration, with costs to automakers estimated at as much as $2.7 billion. The National Highway Traffic Safety Administration, part of the Transportation Department, issued a proposed rule in 2010 after Congress passed legislation requiring one.
The rule is a “modest positive” for Gentex, Matthew Stover, an analyst with Guggenheim Securities in Boston, wrote in a research note today. More automakers are integrating such cameras into the infotainment screen, rather than the rear-view mirror, Stover said. The new rule could add 10 cents to 20 cents per share to Gentex’s earnings in 2018, Stover estimates.
About 15,000 people are injured and 210 people are killed each year in backover crashes, David Friedman, acting NHTSA administrator, said in a statement. Children under 5 years old account for 31 percent of those fatalities, and people age 70 and older account for 26 percent, NHTSA said.
“Rear visibility requirements will save lives, and will save many families from the heartache suffered after these tragic incidents occur,” Friedman said in the statement.
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