GM hits brakes on motorsports budget

[johnjzjz]

http://money.aol.com/news/articles/_a/bbdp/gm-hits-brakes-on-motorsports-budget/91750?icid=200100397x1205982470x1200314637

[Knipps]

GM says it will cut back motorsports advertising, putting in jeopardy its sponsorships of teams, tracks and all the ancillary marketing that goes with racing.
Expected among the biggest losers is NASCAR-related spending of an estimated $120 million to $140 million a year.

Last week, GM announced a program of "self help" to save and raise cash needed to survive the current car market downturn. The $15 billion plan through 2009 includes cutting salaried jobs, slashing production, eliminating the dividend and trimming marketing budgets, which include race promotion.

"Like all areas of the business, these areas have not gone without a certain level of scrutiny, and there will be modifications and changes in our promotional footprint," Troy Clarke, president of GM North America, said in a conference call on the plan. "We're not going to talk about the details today, and specifically NASCAR, but all those areas have been reviewed and will continue to be as we work these action plans through."

One consideration may have been that NASCAR began a transition in 2007 to a so-called Car of Tomorrow. In place of body shapes loosely based on a carmaker's product, all race cars would have the same generic body, differentiated with stickers depicting headlights, taillights and grille, as well as the car number and source of the engine. The goals were safety, lower costs for race teams and an even playing field for drivers.

But it's also taken some of the pizazz out of racing, says Peter De Lorenzo, editor of AutoExtremist.com and a consultant to some automakers. And in severe financial times, promoting something so unrelated to actual products GM sells doesn't make sense, he says.
"NASCAR was more effective -- when there was some sort of product identification and connection to the manufacturers," De Lorenzo said. "There's been resistance to taking a hard look at what they're spending, but now they're really giving it intense scrutiny."

Racetrack owners now are scrambling to hammer out new contracts, hoping to replace some GM corporate money with ad support from local dealers.

NASCAR spokesman Ramsey Poston says he's confident GM will continue to see NASCAR as an important advertising investment.

"Obviously, they're hugely a part of our sport and our industry," he says. "Hopefully they'll continue to recognize that the power of our fan base is that they are direct customers of theirs."


Copyright 2008 USA TODAY, a division of Gannett Co. Inc. All Rights Reserved.

linkfree.

[sweetbmxrider]

sucks. hope the cars don't suffer

[SteveR]

daaaamn. I wonder if GM is thinking about doing the same for drag racing. I understand their reasoning though, and they have a point. NASCAR has turned into Indy, whereas the cars are all built by one company and they all look alike, with hardly any representation of the product that GM is trying to market. Still unbelievable though, I thought NASCAR would be the last sanctioning body to feel the market crunch, not the first. With all the money coming into NASCAR from the fans, I thought that they'd be the best out of all the sanctioning bodies.

[ins0mnia24]

Good for them Nascar has turned to a pile of crap anyways
I bet they start doing more stuff in the area's of SCCA, Drifting, autocross and other events that feature cars closer to the showroom cars..

According to the newspaper here they picked up a racer from Philadelphia that won one of the SCCA events held this past weekend here in Millvlille and he happens to use a 4th gen F-body..

[BigAls87Z28]

Shut down sponsorship of Nascar.
Keep ALMS Corvette program going, decide if you are gunna go to GT1 or GT2.

[79CamaroDiva]

daaaamn. I wonder if GM is thinking about doing the same for drag racing. I understand their reasoning though, and they have a point. NASCAR has turned into Indy, whereas the cars are all built by one company and they all look alike, with hardly any representation of the product that GM is trying to market. Still unbelievable though, I thought NASCAR would be the last sanctioning body to feel the market crunch, not the first. With all the money coming into NASCAR from the fans, I thought that they'd be the best out of all the sanctioning bodies.

Well, think about it. What do you picture when you think of a NASCAR fan? There's a stigma that goes with it (ie, middle aged, white, low income men and women) It doesn't surprise me at all that NASCAR is the first race they are pulling out of. Yes, there are a lot of nascar fans out there, but how many are actually DIRECT purchasers from GM? I'm willing to bet that a lot of them are in the used car market, if any car market at all.

In a marketing pamphlet I have from NHRA, Scarborough research did a complete survey of NHRA fans in general, and this is what they had to say about NHRA vs. NASCAR fans:


Cross over with NASCAR is relatively low:
- Only 11.8% of NASCAR fans are avid fans of NHRA

Key demographic differences:
NHRA fans are more likely to be
- Age 18 –24 + 32%
- Age 18 –34 + 20%
- Black / African American + 28%
- Hispanic + 34%
- Household size (+ 3) + 11%
- Household spent $100+ on groceries + 7%

Younger, more diverse, live in larger households and have greater purchasing power

[Featherburner]

Well, think about it. What do you picture when you think of a NASCAR fan? There's a stigma that goes with it (ie, middle aged, white, low income men and women) It doesn't surprise me at all that NASCAR is the first race they are pulling out of. Yes, there are a lot of nascar fans out there, but how many are actually DIRECT purchasers from GM? I'm willing to bet that a lot of them are in the used car market, if any car market at all.


Just because you have this impression doesn't make it so. There is more fan based buying power in NASCAR than any other motorsport. More brand loyality too. Here are a few demographics of NASCAR. http://www.gommi.com/rftc_media/race_demographics.htm I honestly don't know how many NHRA fans there are in the US but I willing to bet there are more NASCAR fans.

[79CamaroDiva]

Just because you have this impression doesn't make it so. There is more fan based buying power in NASCAR than any other motorsport. More brand loyality too. Here are a few demographics of NASCAR. http://www.gommi.com/rftc_media/race_demographics.htm I honestly don't know how many NHRA fans there are in the US but I willing to bet there are more NASCAR fans.

its funny they didn't mention NHRA in that..

Average US Sports Attendance per Event
NASCAR Sprint Cup Series 120,000+
NASCAR Nationwide Series 60,000+
National Football League 63,000
NASCAR Craftsman Truck Series 40,000+
Major League Baseball 31,000
National Basketball Association 21,000

because NHRA draws approx 125,000 fans per NHRA event, and they want NASCAR to look like the big wig.

The survey that I have, and the one that that website shows, was done by the same research institution. NHRA has a younger fan base, with more people in the $30k-100k income bracket, as well as more households with children. Children are very important because they represent the future of your product. Why do you think fast food places give away a toy with the meal? Because they are the future customers, and they have control of the current customers ("mom, can we go to mcdonalds?" :insert temper tantrum: )

As for purchasing power and sponsor affinity:

http://www.islanddragway.com/melissa/nhrasponsoraffinity.jpg

http://www.islanddragway.com/melissa/nhrapurchase.jpg

http://www.islanddragway.com/melissa/nhraincome.jpg