Automakers bank on NASCAR to keep driving sales
By Ben Klayman
CHICAGO (Reuters) - Racing fans will have many questions when the NASCAR season kicks off Sunday with the Daytona 500 race, but automakers only wonder whether the sport will retain its popularity and keep driving vehicle sales.
The millions in NASCAR nation are wondering whether fan favorite Dale Earnhardt Jr. can find happiness with his new deep-pocketed Hendrick Motorsports team, whether rival and teammate Jimmie Johnson can successfully defend his Sprint Cup Series title and what impact the bigger, boxier "Car of Tomorrow" design being used in every race this year will have.
For those financially linked to the National Association for Stock Car Auto Racing's success, however, last year's lower television ratings, and flat or declining attendance at many of the venues in the 36-race season has raised the question of whether the racing circuit's popularity has peaked.
For now, General Motors Corp <GM.N>, Ford Motor Co <F.N>, Chrysler LLC <CBS.UL> and Toyota Motor Corp <7203.T> still love the sport's potential, increasing or maintaining NASCAR-related budgets that top $100 million in some cases.
"I'm not really quite sure if NASCAR has peaked, or if this is just an adjustment period," said Mike Accavitti, director of Chrysler's Dodge brand and head of motorsports.
"In the meanwhile, even where it's at, there are still 75 (million) to 80 million NASCAR fans out there ... and being in the automobile business, this is exactly the types of folks we want to be talking to," he added.
While many major U.S. sports saw TV ratings slip, NASCAR was hurt more than other leagues last year by spiking gasoline prices, since a large number of fans drive long distances to attend the weekend-long events that include multiple car and truck races.
With a brand loyalty greater than other U.S. sports "by a factor of 10," according to Toyota national motorsports manager Les Unger, NASCAR is still enticing.
"In life, very few things, if any, continue in an unmitigated, uninterrupted upward slope," Unger said. "If the fans feel the racing is as good as, or better than, it has been, then Toyota as a manufacturer will be happy."
Studies by the various automakers show that fans are more likely to buy sponsor cars and pickup trucks -- and that, in the end, is what matters most.
"The old adage has always been: Win on Sunday, sell on Monday," said Terry Dolan, manager of racing for GM's Chevrolet brand.
"The No. 1 vehicle of choice of NASCAR fans is the full-size pickup and the highest volume vehicle at General Motors is the Chevrolet Silverado, so you can see a nice correlation between our bread-and-butter vehicle and the fan base of the sport," he added.
GM said its U.S. market share hovers in the mid-20 percent range, but jumps to more than 40 percent among NASCAR fans, while Ford found consideration for its products was more than 100 percent higher among race fans.
Chrysler research shows NASCAR fans buy Dodge vehicles at a rate 30 percent higher than the general population.
"NASCAR fans have a propensity to buy domestic automobiles," says Chrysler's Accavitti. "Is it because we're in racing that they buy us? I can only look at the facts."
Toyota, which joined the top car series last year, doesn't discuss NASCAR's impact on sales, but Mark Yost, author of "The 200 MPH Billboard: The Inside Story of How Big Money Changed NASCAR," said the Japanese automaker is involved not for its top-selling Camry sedan but to boost its Tundra pickup truck.
That's not to say that automakers don't have concerns. At an industry conference last month, GM Vice Chairman Bob Lutz gave voice to that frustration.
"Somewhere along the way, as racing become a televised spectacle, that thing about 'the best car and best driver wins' kind of got neutralized, and we introduced what I call socialism in racing," he said, describing the format as "the world wrestling federation of motorsports."
NASCAR is sensitive to the criticism.
"I'm sure there's some things the manufacturers would like from us a little bit more in terms of branding, but we think we've done a pretty good job of managing all the entities' interests," said NASCAR vice president of racing operations, Steve O'Donnell.
In the end, success on the track will leave a smile on the faces of automakers' executives.
"If you can win a 500-mile race at 200 miles per hour, you must be capable of building a vehicle with some pretty decent levels of (quality)," Chevy's Dolan said. "2008 will be telling for us."
(Reporting by Ben Klayman)
(Additional reporting by David Bailey in Detroit. editing by Gunna Dickson)