The Economy Hits Racing

Big Changes in Racing

It’s going to be a tough year for motorsports.  Honda has pulled out of Formula 1 and NASCAR had cancelled all testing for the off season.  It looks like multi-car teams may become a thing of the past, at least temporarily.  Indy car chassis supplier Dallara has reduced prices on parts in an effort to help out IRL team next year.

Audi is backing out of racing as well, trimming their involvement to the LeMans 24 hour race only.  This is the company that showed just what turbo-diesel technology could do and dominated the series – until now.

Noel informed me that Subaru has announced that it is pulling out of WRC and so has Susuki.  Mitsubishi, who dominated WRC at one point, has no plans for the newest Evolutions to represent the company in WRC.

Will Toyota continue to be able to pour money into motorsports?  Will IRL and NASCAR be able to find enough sponsorship money to carry on as they have in the past few years?  What about GT and American LeMans series?  Will Honda pull out of IRL? 

What will all this do to grassroots racing?

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3 Responses to The Economy Hits Racing

  1. Noel says:

    Call me cynical, but I think the present age of huge corporate sponsorships in racing is all but over. I know auto racing is one of the most widely watched sports, but in a world of incredibly fickle consumers and reduced brand loyalty, the caché racing once gave to a brand just doesn’t seem all that strong (NASCAR Nation notwithstanding). Whether it is the overall malaise of the global economy, companies simply looking more pragmatically at the ROI of racing, concerns about how auto racing “fits” in a age where environmental issues and climate change live large in the media, or some of each, auto racing will change, perhaps dramatically over the next couple of years. And maybe for a long time. Top of mind for all of manufacturers looking at lower sales comes down to this: What do we actually get out of racing? Does it REALLY make us money? Or is it just image and PR? Is the engineering value truly worthwhile? And, perhaps more importantly, can those financial and technical resources be used more effectively to develop and build the kind of cars the world will need in 2, 5, 10 or even 20 years? For some this can be a “bet the company” move.

    In terms of rallying (WRC) I’d think it has to be difficult for any of the companies to justify the expense against what it gives them at the everyday engineering level and how winning translates into vehicle sales–which is really the bottom line. Even normal cars are so good now that I think there is diminishing value in the trickle-down from racers to road cars. The old “win on Sunday, sell on Monday” thinking that prevailed in the ’60s and ’70s, and carried over to a lesser extent in the ’80s and ’90s is far less important today–and thus has less value to the auto maker. The guys driving EVOs and WRXs, Corvettes and Porsches know the heritage and the technology and the performance, and they will still buy those cars if the companies that make them aren’t on the rally or racing circuits. Similarly, everyone knows the cars turning left in a Nextel Cup race have zilch in common with the models one can buy at their local Ford or Chevy (or Toyota) store. And the automakers have figured out that the affinity marketing with racing only has value to a fraction of car buyers.

    Toyota just announced it will have its first loss in 70 years. The Japanese always take the long view, so they may stay in racing at some level, but my guess is they will dial it back a tad. OR, in a practical sense, what does IRL really do for Honda? I suspect the average Honda buyer hasn’t even heard of IRL.

    As for grassroots racing, I’m not sure there’s a big connection. The economy will almost certainly cause the guys with SCCA club racers, dirt track guys, and the like to race less unless they have the depth of pocket to continue. The passion to race dies hard and will still be there, but I think there’ll be fewer cars on the tracks on race weekends. More folks who like to race may turn to doing more track days and less racing for their speed fix.

  2. jimsgarage says:

    Interesting Noel.

    Now that I think about it – what has HUGE corporate sponsorship given us?

    Spec series at what should be the pinnacle of US (North American) racing. NASCAR used to be called Stock Car and since bags of too much corporate money hit the series it has become a spec series of cars where stickers are the only clue as to what brand car they are supposed to represent. Gee, what dealership should I go to and drive off in a new car with a carburetor????

    Indy/CART marriage where now everyone uses the same engine, chassis, tires, and fuel??? Cripee! I must be ancient because I remember when Indy cars were innovative. Four wheel drive, turbine engines, sometimes even three axles, cars shaped like triangular prisms, some like door wedges, wings in all sorts of orientations. Now that was innovation.

    The last year Speed gave coverage to the WRC was 2005 and now it will be amazing if there are two factory teams left to spend too much money.

    F1 is moving to narrow rear wings and wide front ones while it tries to figure out how to hold down engine costs.

    NASCAR looks like it is losing multi-car teams as well as some of the perennial stars like old number 43.

    Maybe racing will go back to the times when only the rich would participate. Back when cars and drivers weren’t covered in advertising. Wouldn’t that be a kick.

  3. Noel says:

    Right! As near as I can tell, megadollar sponsorships have done nothing for racing. They add some branding for the companies buying space on cars and driver suits, but the value of that is all but immeasurable. All the dollars seem to do is provide the funding for multi-car teams and over-paid drivers’ endorsements. But how many people REALLY go to Lowes because the name is on a race car?

    Spec racing, while perhaps intended to put a premium on driver skill rather than the car just doesn’t seem to work out that way. Look at the top dozen drivers in NASCAR and they basically swap positions each week, almost as if they take turns winning.

    As commercialization became rampant I found the quality of pro racing seemed to decline. Today I’d rather watch an SCCA national, or maybe a FFR spec race where the egos are a bit more in check, the drivers aren’t celebrities, the cars are real cars, not one-offs, and the racing is real, where there’s some passion on the track. Or go to a vintage car race. But that’s just me. Ya know, you can pick up grassroots racing on Speed or ESPN— dirt tracks, drag racing, “real” stock cars, etc. Why not club level road racing?

    The same has happened in lots of sports. It starts with the naming of stadiums with company names. The closest equivalent is big league yacht racing, Round the World races and America’s Cup, for instance. Now the boats are all company names, the sails covered with logos. Ski racers are trained to take off their skis at the end of a run and lean them against their shoulder so the logo on the skis is in full view of the camera. Makes sure the next pair of customized $2500 skis and $2000 boots finds its way to the racer’s gear locker. Has the racing improved? Not that I can tell.

    We’ll never go back to the age when cars wore national colors, but sure would be interesting to try something different than what we have today.

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