Manufacturers work to maximize value of NASCAR involvement

As NASCAR returns this weekend to Michigan International Speedway, considered to be the home race for the American auto industry that is located an hour down the road in Detroit, can the industry still rely on NASCAR to sell its cars?

In the early days of stock car racing, the sole premise for manufacturers was winning on Sunday and then selling on Monday. That was when the sport’s relationship with the Detroit auto manufacturers was a direct benefit to both parties and helped build the sport into the behemoth it is today. However, in the NASCAR of 2010, it’s an idea that is only a part of a wider business platform.

Winning still matters in the boardrooms of General Motors, Chrysler, Ford and Toyota. But more often than not, winning today also means success in the business-to-business deals made either in the garage or on the golf course or over a few cocktails in a hospitality suite. Those are the victories that keep the conversation going long after the heady winner’s circle photographs have been passed around and then hung on a vacant spot on an executive’s office wall.

NASCAR has been an ideal platform for image building as well as profit building. But that image has been increasingly difficult to maintain since the introduction of the safety-driven Car of Tomorrow, which homogenized the looks of the race car, making it harder and harder for fans to distinguish between a Chevrolet and a Toyota or a Dodge and a Ford. That’s forced auto industry brass to take a harder look at association with the sport.

“The old days of just blind association with NASCAR, because that’s what we always do in Detroit, I think those days are gone,” says Peter DeLorenzo, the publisher of autoextremeist.com and an industry consultant and analyst.

Tough economic times have taken a toll on the auto industry, leaving marketing executives from the four manufacturers racing in NASCAR faced with a tougher sell in justifying their involvement in a motorsport that features cars that barely resemble their showroom counterparts and utilize technology that is decades old and no longer a part of their current product.

NASCAR racing is a unique blend of sports and commerce. It’s where dollars are what make sense, offering extraordinary opportunities for a wide array of businesses to reach a fan base unlike any other in professional sports. NASCAR fans possess unparalleled loyalty and brand awareness, are outspoken and proactive — and NASCAR’s sponsors as well as its manufacturer partners count on those qualities in order to realize a successful return on their investment.

“We have three common goals,” said Terry Dolan, manager of racing for Chevrolet. “We race to win. We’re here because the fan base is relevant and sizable and we must receive a return on investment from our participation.”

To realize that return on investment, each manufacturer has increasingly turned its focus to cultivating business-to-business deals between companies currently involved in the sport.

“In a time when people say it’s so tough to fight for every marketing dollar, I’m asked why would we spend the money we’re spending in NASCAR?” said Tim Duerr, NASCAR marketing manager for Ford. “There’s no question that a lot of our money goes into the research and technology and performance on the track. But a lot of our focus and time and energy goes into networking with the NASCAR official partners group.”

Four times a year, NASCAR organizes the members of this group in what it calls the NASCAR Fuel for Business Council (NFFB). Members meet to discuss ways to buy and sell each other’s products and services. Additionally, these meetings provide a venue for partners to discuss ways they can work together on marketing/promotions and simply network with other key official partner decision makers in the sport.

Official partners of NASCAR are provided many benefits, ranging from discounted advertising, a private Web site to collaborate on the sport as well as participation in the NASCAR Fuel for Employees (a secure Web site for each official sponsor company offering them inside access and partner discounts); and NASCAR Fuel for Hospitality (which provides turnkey hospitality experiences).

For the four auto manufacturers, networking with other official partners as well as individual team sponsors means big business. Fleet sales to team sponsors and to official NASCAR partners bring in huge dollars to a company’s bottom line and help to bolster a return on investment critical to its continued participation in NASCAR.

While business-to-business activity has grown tenfold over the past decade, marketing executives still say the main focus is attracting the attention of race fans to their brand.

“We’re here to sell vehicles to a fan base that is three times more likely to buy our vehicles than non-fans,” said Duerr. “It allows us to showcase our great products and interact directly with the fans, either at the track with our displays or to tie in with partnership groups to sell to their employees, or retirees or to sell to their fan base.”

Even the most recent member to join the NASCAR manufacturer’s ranks, Toyota, has seen an impact from its participation in NASCAR. Since its debut in the NASCAR Camping World Truck Series in 2004, the Japanese manufacturer has made slow, but steady, inroads into the psyche of the admittedly pro-American manufacturer fan base.

“We’ve opened the door for NASCAR fans by saying its OK to look at a Toyota,” said Ed Laukes, Toyota’s corporate manager of motorsports operations. “NASCAR fans are still extremely brand loyal. It doesn’t necessarily finalize their decision, but it does open the door for them to look.”

All four manufacturers use traveling displays set up at racetrack midways, each one offering a hands-on experience with its vehicles, including a test drive, away from the pressure of the showroom floor.

For Toyota, these track displays have been extremely beneficial.

“We’ve had fans tell us that because they’ve had a family history with an American brand, they normally wouldn’t have gone into a Toyota dealership,” Laukes said.

Selling that new vehicle to a fan in the grandstands or at home watching a race on television would be a lot easier if the cars looked more like their showroom counterparts.

Since decals are the primary method used to differentiate between models in the Sprint Cup Series, manufacturers struggle to find a connection made between the car on the racetrack and the one they’re selling. Representatives acknowledge that the driving force on the new car was safety, but they struggle with the consequential disconnect with the fan base that has made their job more difficult.

“There is a realization by everyone of the importance that the product connect with the fan base,” said Chevy’s Dolan. “Part of the connection is ‘Does that car look like what I drive’ and ‘Can I put one of those in my garage?’

“The goal for both NASCAR and the manufacturers is to come up with a car that provides a marketable business case and offers the opportunity to connect well with a NASCAR race fan that makes you feel like you’re part of your hero. You’re extending that passion and support with the car you drive every day with your family.”

Dolan is quick to point out that NASCAR executives, especially those involved on the competition side, have been extremely cognizant of the need for the race cars to look more like their showroom counterparts.

Ford’s Duerr points to the new Nationwide Series Mustang as an example of the direction NASCAR and its manufacturer partners are headed.

“NASCAR believes that this (the new Mustang) is the way to go and all four of the manufacturers are working towards that effort,” said Duerr. “I think in the years to come, I don’t know when it will happen, but you’ll be able to see a vehicle in the Sprint Cup Series that’s going to look very similar to those that are parked out in the parking lot.”

Since founder Bill France Sr. first recognized the value of a relationship between NASCAR and the auto industry, this marriage of necessity has been at times both blissful and rocky. Each partner remains focused on its respective needs, while vying for the attention of the race fan, who supports both.

In no other time in the sport’s history has there been a greater need for both parties to come to the aid of each other.

“Cooperation has been nothing short of a collaborative business partnership with common goals and objectives and looking for mutual solutions that can drive each other’s business,” said Chevy’s Dolan. “That’s a good part of the evolution as we go forward. This will put butts in seats of the grandstands and butts in seats of our production vehicles.”