NASCAR manufacturer support may take a hit

Given the choppy financial outlook for the Big Three automakers, some NASCAR team executives are beginning to wonder whether the cascade of financial and technical support they receive from Detroit will begin to run dry. Does it really make sense for General Motors, which lost $1.1 billion in the first quarter of this year, and Ford and DaimlerChrysler, which saw profits slip 30% or more, to maintain estimated nine-figure NASCAR budgets? "It's a legitimate question that a shareholder would ask," says Jim Andrews, editorial director of the IEG Sponsorship Report. "But there's also a danger in saying, 'The company's doing badly, let's just start dumping stuff.' " Executives representing automakers' racing programs say sales slumps make NASCAR more important than ever. While manufacturers are beginning to find ways to spend money more efficiently in racing, executives rule out wholesale cutbacks that would jeopardize their teams' ability to compete. Andrews notes that GM actually is expanding its sports marketing budget, having signed a deal with Major League Baseball earlier this year. "I doubt very much that these companies are looking at NASCAR racing and saying, 'We should be getting out,' " Andrews says. Andrews believes automakers' support of NASCAR is more "defensive" than anything else; they're racing because their competitors are racing. "If they weren't there, other companies would say, 'Why aren't you there?' "

Automotive industry consultant Peter DeLorenzo, publisher of the Web site, estimates each manufacturer spends at least $125 million a year on NASCAR and doesn't get its money's worth. While automakers still use racing to train young engineers, it has been decades since advances made in NASCAR — which limits technology to control the cost of racing — applied to passenger cars. Beyond that, drivers' personalities and connections to other corporate sponsors have been marketed so aggressively that DeLorenzo says the kind of car they drive is an afterthought. Most important, DeLorenzo says, being in NASCAR does nothing to help domestic automakers overcome what he calls their biggest challenge: winning over foreign car buyers. NASCAR fans already buy domestic cars and trucks. "Detroit is spending a lot of money to preach to the choir," DeLorenzo says.

Manufacturers' executives tell a different story, one of positive media exposure and fan demographics. "We absolutely believe that it's a great return on our investment, from the standpoint of getting exposure," says Bob Wildberger, senior manager of NASCAR operations for Dodge Motorsports. Mark Kent, director of GM Racing, says GM is in NASCAR for the "long haul." But Kent says they have cut back on travel expenses and are working with Chevy teams to consolidate research and development projects. "Obviously, like anything else in our business, we're looking to do more with less," Kent says. USA Today

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