Ford gets mileage from racing

By Mark Hansel

Friday, Feb. 27, 2009 | 2 a.m.

What a difference a year makes.

When the NASCAR Sprint Cup Series hit town last year, the race was called the UAW Daimler-Chrysler 400, and fans packed the Las Vegas Motor Speedway.

This year the race, called the Shelby 427, is sponsored by Shelby Automobiles. Attendance is expected to be way down, and Chrysler, along with General Motors and to a lesser extent Ford, is fighting just to stay in business.

This has caused some to wonder why Detroit’s “Big Three” continue to pour money into the race car industry.

Tim Duerr, marketing manager for Ford Racing, said if domestic car manufacturers did not support racing, the situation in Detroit might be even more dire than it is.

Put simply, research shows that a large number of NASCAR fans buy the consumer models of the cars and trucks they see on the racetrack.

More than 275 million fans watch NASCAR every year on television, Duerr said.

“Our objective is to try to use marketing dollars to speak to people who are market-active, and 31 percent of all NASCAR fans are in the market for a new vehicle.”

Duerr said that when those people buy, they are overwhelmingly loyal to NASCAR brands.

Specific to Ford, 56 percent of its vehicle owners are race fans and 60 percent of those who own the Ford F-150 pickup truck, the No. 1-selling pickup truck in the country, are NASCAR fans, Duerr said.

It all comes down to what is referred to in the business world as ROI, or return on investment, and Ford is still convinced that it gets a great bang for its buck from racing.

“Our budgets continue to shrink, so we have to be much more efficient to assure that Ford is getting a return on its investment,” Duerr said. “Everything we do in NASCAR allows us to measure the return on our investment, and it’s very positive. That’s why we are here to stay in the sport.”

Expenditures include everything from decals on cars to contests that increase brand awareness.

This year, for example, Ford will sponsor a “We Race You Win” contest, in which one fan and a guest will win a trip to Homestead-Miami Speedway in Florida for the Ford 400 race each time a Ford Racing driver wins a Sprint Cup points event. At the end of the year, one of those fans will also win a 2010 Ford Fusion.

Such contests, Duerr says, give fans an added incentive to root for Ford drivers and generate increased interest in Ford products, such as the Fusion, which will include a hybrid model in 2010.

It’s easy to play a numbers game with statistics to justify such expenditures, but Duerr says car manufacturers go to great lengths to determine that the numbers they quote accurately reflect purchases from key demographic groups.

Ford commissions a brand sourcing research project each year with a global marketing company, the RDA Group, to help determine the effectiveness of its marketing.

Ford and the other manufacturers also rely on information supplied by other researchers, such as J.D. Power and Associates and NASCAR, to gauge the effect of their marketing strategies.

It’s not just about the dollars with Ford Racing, Duerr admits. Racing has been associated with Ford even longer than there has been a Ford Motor Co.

“It’s part of our DNA,” Duerr said. “Way back in 1901, Henry Ford raced and won his first and only race, which gave him enough credibility within the financial community back in Detroit to start Ford Motor Co. two years later in 1903.”

There are no doubt plenty of people in Detroit who wish Henry could put on a similar exhibition for the guys who hold the purse strings today.

Despite the continued commitment to racing, which includes long-term agreements with the Ford Racing teams, the company has had to make budget cuts. The future of NASCAR is especially important to Las Vegas because the Sprint Cup race is the only regular season major league sporting event that takes place in Las Vegas. The Las Vegas Convention and Visitors Authority estimates that NASCAR weekend attracted 116,775 out-of-town visitors and generated more than $189 million in revenue for the local economy.

Although the NASCAR Sprint Cup series, the sport’s major league, still gets plenty of support from the manufacturers, the other series are not as fortunate.

“We have increased our financial investment in the NASCAR Sprint Cup Series, but we have reduced our outlays in the Nationwide series and in the Camping World Truck Series,” Duerr said. “We are still offering engineering, (research and development), and aero support in those series, we just are not providing cash outlays in those series.”

Contingency payments, which are moneys contributed to the top finishers in each series who have the proper logos on the vehicles, continue to be paid in all three series.

Ford continues to sponsor the Ford 400 Sprint Cup race at Homestead-Miami Speedway and the Built Ford Tough 225 Camping World truck race at the Kentucky Speedway, but Duerr said the company is not looking to increase its sponsorship.

“That’s certainly because of the economy, but we will continue to support both Homestead and the truck race,” Duerr said.

Although the automobile industry has always been extremely competitive both in the racing world and in sales to the public, Duerr said Ford Racing is rooting for the other domestic automakers to remain in business. There has been much talk about the nationwide effect the failure of a domestic automaker would have, and NASCAR would feel it as much as any industry.

“We’re not prepared to come in and fill the void,” Duerr said. “If there is a dramatic turn that includes bankruptcy from any one of the manufacturers, that will affect us all greatly. It is our hope that Chrysler and General Motors are very successful and can get their operations turned around.”

The effect of a bankruptcy on the parts suppliers would be disastrous and the ripple would be felt by domestic carmakers as well as foreign companies such as Toyota, the newest manufacturer to join NASCAR.

Despite the uncertainty facing the industry, Duerr said NASCAR and its manufacturers continue to look to the future optimistically.

NASCAR is developing a version of the Car of Tomorrow used in the Sprint Cup Series for the Nationwide series. Ford is revamping some of its models, and there is buzz that the redesigned Taurus could replace the Fusion as the Car of Tomorrow in the Nationwide series.

Duerr would not confirm this, but did say that NASCAR has told Ford which car it wants for the Nationwide series and it’s not the Fusion.

One criticism among NASCAR fans is that race cars no longer look like the cars they see in showrooms.

With the advent of the Car of Tomorrow in the Sprint Cup series, the different models have become almost indistinguishable from each other, especially at high speeds. There was a time when fans could identify with race cars because they could buy a car from a dealer that looked similar, which is why they were known as stock cars.

The Nationwide series Car of Tomorrow models are reportedly markedly different from their Sprint Cup series counterparts, which could create another marketing tool for Duerr and his counterparts — a race car that once again resembles the showroom model.

Mark Hansel covers retail and real estate for In Business Las Vegas and its sister publication, the Las Vegas Sun. He can be reached at 259-4069 or at [email protected].