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Daytona 500

Date: Feb 21, 2005
Contributor: Lorrie Alkire

Automakers spend big to win race fans' attention

As 43 painted stock cars prepare to kick off another NASCAR racing season Sunday at the Daytona 500, Detroit automakers will again consider the millions they spend on the sport and ask: Is it worth it?

NASCAR, the fastest-growing spectator sport in the country, has become a hot marketing vehicle for companies pitching everything from laundry detergent to whiskey, but Detroit's Big Three may be getting less bang for their buck than they did in years past.

That's partly because drivers have become NASCAR's main attraction, a departure from the days when the cars were the stars. A swell of corporate sponsors is also pushing the Big Three out of the spotlight, as are safety and engineering restrictions that have made one automaker's race car nearly indistinguishable from another's.

Still, despite mounting costs, GM, Ford and Chrysler contend racing in NASCAR improves brand image and helps sell cars and trucks.

"Without any smoke and mirrors, fans have a tendency to believe if you can participate in a high speed dynamic event like motor sports, then it improves the quality, dependability and reliability of your cars," said Terry Dolan, marketing manager for General Motors Corp.'s Chevrolet Racing division.

As each of the Big Three struggle to cut costs and regain U.S. market share, however, multimillion-dollar racing programs may have to work harder to prove their worth.

GM, DaimlerChrysler AG's Chrysler Group and Ford Motor Co. are the only automakers that race in NASCAR's premier event -- the Nextel Cup series. They are eager to grow with the sport but could face some competition. Many analysts expect Japan's Toyota Motor Co.p., which already participates in NASCAR's truck division, to eventually join the Nextel Cup, although the automaker has not made a commitment.

The marketing appeal of NASCAR is exposure. It is the second-biggest spectator sport in the country behind professional football, claiming 75 million mostly male and increasingly affluent fans living in every region of the nation.

"It's not just a Southern thing anymore," said Jorge Villegas, a University of Florida professor who has done research on sports marketing.

Joyce Julius and Associates Inc., an Ann Arbor firm that evaluates corporate sponsorships, estimates the value of the exposure associated with NASCAR telecasts last year at $414 million for Chevrolet, $195 million for Ford and $166 million for Dodge.

The figures were calculated by counting the mentions and visual shots of the brands and estimating the cost of buying equivalent commercial time. The three auto brands were among the top five in the firm's 2004 study, and Chevy was No. 1.

NASCAR is working to further broaden its reach by breaking into unlikely markets such as New York City, Mexico and Canada and creating a celebrity culture around drivers.

Jeff Gordon, arguably NASCAR's biggest star, hosted TV's "Saturday Night Live" last season, for example. As NASCAR grows, however, the racing organization could do more to promote automakers' role in the sport, said John Fernandez, head of Chrysler's racing division. That could include allowing manufacturers to partner on more business relationships and by easing vehicle design restrictions so car companies can set their vehicles apart. "What we're trying to do is work with NASCAR to make sure our exposure with the sport is commensurate with what we're putting in," he said.

For more information relating to "Daytona 500", please visit our Daytona 500 page.

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