FUMES #451

June 25, 2008

NASCAR is about to feel Detroit's chill.

By Peter M. De Lorenzo

Detroit. It's no secret that the worst automobile market in 20 years has the Detroit auto companies reeling. It's in the national news and in newspapers across the country, and it's often the lead story on network newscasts and prime time business programming. And, of course, it's prominent on the Internet too. This isn't just a mild "adjustment" to Detroit's fortunes, either; rather, it's a dramatic, fundamental shift in how the business will be played out from here on in. And Detroit finds itself under the gun like never before.

At this very moment key players of the "Detroit Three" are evaluating every facet of their businesses, right down to the last dollar. That means every product program and every promotional/marketing/advertising program - and everything and anything between - is being placed under the microscope and being scrutinized for ways to shrink expenditures. And for the first time in a long time, Detroit's substantial NASCAR budgets are being included in the process.

In the past, Detroit's NASCAR programs usually escaped scrutiny at cost-cutting time, simply because the sport was on an upward trajectory and participation was not only a given, it was never even questioned. Well, the climate has changed dramatically, and all of NASCAR's negatives - declining attendance, declining TV ratings, the dreaded "Car of Tomorrow," which has destroyed brand recognition and differentiation, the never-ending schedule, and the spike in costs due to the influx of Toyota spending - have the powers that be at the Detroit automakers seriously questioning their NASCAR programs.

How will it shake out? The peripheral programs that NASCAR fans never think about - the track sponsorships, the promotional support programs and other components that go into the Detroit car companies' NASCAR programs - will be the first to go. Programs that are coming up for renewal now - mid- to late summer being prime sponsorship program renewal/extension/evaluation season - will be the first to be cut.

Then, the national advertising and high-visibility NASCAR-based promotions that have become so ubiquitous on networks such as SPEED will be cut back.

And finally, the actual contacts with the teams will be closely analyzed for value, and this is where it will get very interesting, because these manufacturers could easily just "cherry pick" one of the three NASCAR series (Sprint Cup, Nationwide & Craftsman) to compete in, rather than continue blanket participation, or, there is a very real possibility that at least one of the Detroit manufacturers will pull out altogether - which I've been predicting for two years now - even if it means NASCAR becoming a one-make series (Toyota).

At the very least, I can assure you that some of NASCAR's sacred cow teams - the ones that heretofore would never be considered to be on the block - will be left by the side of the road by the Detroit manufacturers in the interest of saving money.

Suffice to say that the marketing mavens in Daytona Beach will be in for a shock when these Detroit car companies begin to pull back on their NASCAR spending, because they will be ill-prepared for the depth and breadth of the reductions that are coming.

The days of Detroit's "automatic" involvement in NASCAR are coming swiftly to a close.

And NASCAR is about to feel Detroit's chill.

Publisher's Note: In our continuing series celebrating the "Golden Era" of American racing history, here is another image from the Ford Racing Archives. - PMD

(Ford Racing Archives)
Mickey Thompson sits in one of his Ford-powered drag racing creations, circa 1963.