GM cuts back on NASCAR and it's about time

Posted by: David Welch on July 17, 2008

Here’s something that’s long overdue. The Associated Press today reports that General Motors is cutting back spending on NASCAR. It’s about time. Here’s a company in crisis that can’t afford enough advertising for its bloated family of eight brands, and they have been blowing more than $100 million a year on NASCAR.

Before I explain why I think GM has put too much into NASCAR, let me admit my bias. I hate NASCAR. While I can get into watching everything from Rugby Union and the NFL to golf and women’s tennis, I just can’t get into NASCAR. (As an aside, I can get into Le Mans series races) But as motor sports go, NASCAR races are the snooziest. The cars are slow and bumbling. The circuit strictly legislates body dimensions, chassis engineering and engine size so you don’t get new technology on the track. The cars still have carburetors and only recently got rid of leaded fuel! It’s yesteryear’s race cars running around in circles. A Luddite’s paradise. For more on the limits of NASCAR as a marketing tool, go to www.autoextremist.com and read Peter DeLorenzo’s Fumes column.

But my sports preferences aren’t the ones that matter here. For the Big Three, NASCAR speaks to the working class white guys who already love their trucks and suvs. It preaches to the choir. To the people on the coasts who drive Japanese and European cars, it affirms the red neck, Midwestern and unsophisticated image that most American brands carry. This will enrage some people. But it’s a commonly-held view among the cadre of consumers that don’t like American cars. I get their email and letters all the time. Foreign car owners trick out their Civics, fawn over cars like the BMW M3 and Audi S4 and watch Formula 1 and Le Mans series races. They think NASCAR is about as hip as Conway Twitty’s Greatest Hits.

Add in the fact that the coolest cars Detroit can come up with (save the new Cadillac CTS) are a retro-styled Mustang, a Dodge Challenger that’s a dead knock off of the car from the ‘60s and a Chevy Camaro that again reaches back to its muscle car roots, and the old school image is complete. To the sophisticated, technology-savvy buyer who left American brands years ago, NASCAR sponsorships and nouveau muscle cars affirm what they have long thought. These companies are stuck in the past.

GM is making the right move to pull back on NASCAR. The problem is that they’re doing it too late. GM needs to save money. It would have been better if they scaled back their stock car efforts year ago and put the money toward something that reached a different kind of buyer. Now it’s just a survival move.

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Reader Comments

garry mccabe

July 17, 2008 05:23 PM

i think this guy writes for a living so not sure that he is a money guru but he would have u s believe reading his babbel tells me he is talking to some one in his office that gave him the idea to write this article. i do agree the got to cut the waste and all the other silly things gm and the other two water the money on but not so sure he in his ivory tower makes him think us red necks dont know whom is paying him and i always knew paper accepts ink from any pen maybe he thinks it is the off shore people buying his garbage

Don Runkle

July 17, 2008 07:42 PM

Wow for someone that has a job as a writer for the AP you sure are the dumbest smart person I have ever read. So people are really suppose to care about what you wrote here when you don't even like NASCAR to begin with? UMM OK?

How in the hell can this really be taken seriously? So you don't like NASCAR and you are happy that GM is cutting back from NASCAR, wow that all you could come up with? The higher ups at the AP must be the dumbest people in the world.

Don Runkle

July 17, 2008 07:47 PM

Oh I am sorry to the AP I see that this is what AP reported and you dont write for them, SORRY AP it Business Week that was the dumb ones

Pete

July 17, 2008 09:12 PM

Well I can see you are anta Amercan.Sounds about right for all the takeing you have just done about BMW M3 and Audi S4 and watch Formula 1 and Le Mans series races. An watch a rattle snake In going no were . That Is why they pull in 150 fans a week, Man that Is realy good car sports compered to Nascar 125.000 In any given week , Yes my friend you are very Biss, stay with the E U. an go no were waite till Ford An Chevy an Dodge come homme to roat

Craig

July 17, 2008 09:28 PM

David,
I agree the times call for a cutback but on NASCAR and maybe should've been done years ago. But if it's so backwards why is Toyota pouring millions into it? (Likely due to the estimated 75 million NASCAR fans.)

You think 180-200mph slow? Apparently you are a NHRA top fuel dragster fan.

steve moore

July 18, 2008 01:15 AM

Nascar by far has to be the biggest source of advertisement for GM. Nascar is the second biggest sport in the U.S. and runs for almost 40 weeks. The other reason for GM's cutbacks from Nascar is because of Nascar's new Car of Tomorrow program. It limits Costly developement, saving teams money. GM also reorganized its teams into one that shares its resourses just like Toyota. GM isn't stopping its funding of Nascar, just reducing it. But in $10 Billion dollar cutbacks, Nascar doesn't seem like much.

James

July 18, 2008 02:16 AM

Go David go! I agree with you 100% I had not thought of the mental link re: retro muscle cars, but the only thing the incredible shrinking Big 3 can do is offset that image with hot small cars like the new Fiesta.

I just got a chance to look at the Mini Clubman and while some of the details are over the top, even clownish, it's exactly what Detroit needs to do: make a small car that's hip and cool and compelling enough to make people spend $$$$.

Schmeltz

July 18, 2008 08:22 AM

Admitting my bias, I personally like NASCAR. Therefore, I guess we have a difference of opinion to begin with, but that's ok. Too each their own. One thing you neglected to mention however is the fact that Chevrolet is the nameplate with the most wins under its belt in NASCAR history. To spend money advertising in a forum that their brand is easily recognized in, and they have dominated so long seems to be a no-brainer. If it is a shameful endeavor to invest time and money in NASCAR as the domestic brands have faithfully done for decades, and something the import brands would turn their noses up at as you seem to indicate, then how does one reconcile Toyota's push to break-in to NASCAR over the last few years? Has Toyota gone hickish too?

Bottom line, there is money in NASCAR. The sport is the second most popular only behind American football. The audience who follows NASCAR is huge and varied. I agree that money strapped GM should consider every option to stay afloat financially. If that means cutting back on advertising during NASCAR, so be it. But I sincerely hope they don't shun or neglect the segment entirily since their vehicles are seen and enjoyed weekly at these races by a huge audience of people. Just my 2 cents.

Darkstar

July 18, 2008 08:32 AM

You may THINK you know business... but, you obviously know very little about people... or cars.
Those you refer to as, "the sophisticated, technology-savvy buyer", are actually mostly elitist snobs who know nothing about cars, but, need something to show off to others of their ilk. With people like you and them constantly bashing American cars and other products over non-sense (Sorry... "interior materials feel" - I drive them, I don't run my hands along a dashboard carressing it. And, I don't want an uninspired and uninspiring appliance with which to go from point A to point B, either...), those shallow types with no idea of what makes a CAR great, will never accept any vehicle, which those they seek to impress may laugh or joke at; even if it was the BEST car in the world.
These types will never buy American.
However, you had one good point, it's about time GM cut some spending on NASCAR. If we could just get RID of NASCAR, we might be able to get back to some real, interesting, and exciting racing, instead of the "everyone is equal" racing of old-tech vehicles, that hardly even qualify as cars, anymore.

Matt M.

July 18, 2008 08:38 AM

Brilliant article! 200mph is slow and $100 mil will save GM! Why didn't everyone else think of that?

stevee0506

July 18, 2008 09:36 AM

Better GM to stop concentrating on NASCAR and could poke its nose on designing a fuel efficeint and environment friendly car....http://www.buyingadvice.com/auto-reviews.html

David Welch

July 18, 2008 09:57 AM

Good morning, folks. David Welch here. I'm the writer of the blog item. Let's make one thing clear. I didn't say GM should leave NASCAR, nor is the company planning to do so. I only submit that GM is smart to take a good look at its spending and consider promotions that reach more import buyers. That's part of what GM is doing.

Next, I'm not stereotyping NASCAR fans. But the sport does have a low-tech image even among some racing fans and a red neck image among consumers who don't like racing. See "Talladega Nights" with Will Farrell. Toyota got into NASCAR to help flog the Tundra pickup truck. It makes sense. But you don't see Honda, Nissan or the Europeans there. That contributes to the disconnect between import buyers and NASCAR brands. This isn't a treatise on NASCAR itself, but the marketing issues surrounding the sport.

David Welch

July 18, 2008 10:11 AM

PS - Toyota may be in NASCAR, but the company is also a big player in F1. They seek to reach a variety of motor sports fans and consumers.

pes

July 18, 2008 12:13 PM

I know NASCAR is BIG fan-wise. One reason I think GM maybe made the right move is that most NASCAR fans are loyal Detroit iron owners already, and likely will always be. But GM shouldn't forsake NASCAR advertisement completely. They should continue to devote some resources but not $100 mil a year. Target younger folks with some advertising and maybe a little guerilla marketing.

Bobby Montgomery

July 18, 2008 08:36 PM

David Welch is a jack ass with no clue. If you want to write an openion artical,then call it what it is. Nascar is the #1 raceing seris in the WORLD,not just the US,and is growing every year,where as CART and INDY had to merge just to TRY to compeat!! NASCAR keeps its "Old School" rules for good reason. To keep under funded teams able to compeat,and to limit the amount
of cheating that would be hard to catch with electronic feul delivery. Mr. Welch needs some education,before takin on us "DUMB REDNECKS" Toyota saw the light,he should do the same

Alt

July 18, 2008 09:55 PM

Maybe GM should target younger folks with some decent products, instead of spending nine figures a year to preach to the choir.

Mary

July 21, 2008 03:39 PM

Here are some car buying demographics. Instead of NASCAR, how about addressing GM's biggest target market - women.
Vehicle Type: 5-passenger SUV-type vehicle (EPA classification:
station wagon)
Buyer Demographics: Young married couples (30-35), median family
income $60,000, over 50% female buyers and/or decision makers.

Vehicle Type: 4-passenger, front-wheel drive, 2-door coupe
Buyer Demographics: The coupe is targeted for the unmarried buyer and
young couples without children. The median age is 32, with an annual
income of $42,000. Sixty percent of the buyers are expected to be
female, and 38 percent will be college graduates.

Coupe and Sedan Buyer Demographics
Median age: 18–24 Years
Median household income: $50,000
Purchaser (male/female): 35%/65%
Married: 25%
College graduates: 40%

Sedan:
Buyer Demographics:
Median age: 30—40 Years
Median household income: $35,000—$50,000
Purchaser (male/female): 35%/65%
Married: 55%
Children in household: 40%—60%
College graduates: 35%—50%

GS

July 22, 2008 02:43 PM

Could somebody teach you rubes how to spell? It would make your counter arguments seem a little more valid. It irritates me to no end when you self professed rednecks reply to these articles in a manner befitting of your stereotype. No wonder our education system is a far cry from being the best.

Doug in NJ

July 22, 2008 07:23 PM

NASCAR legislates body dimensions, chassis engineering and engine output as to keep as level a playing field as possible and to leave it the competitions in the hands of the drivers and crews. Who wants to watch a bunch of robots race? Seen an F1 race lately?

Speaking of slow and bumbling. Has anyone watched MLB lately? Playing as a kid was fun. Watching a stick and ball sport with the financial inequities amongst all but 5 of its teams seems idiotic to me. It’s the worst money one can spend on their sports entertainment dollar. And, the players overall are less than appreciative of the fan.

Which brings me to another NASCAR point…I started watching NASCAR 13 years ago simply because I realized this sport cares about their fans unlike all the others. I learned to appreciate all its other good point thereafter.

Michael

July 22, 2008 09:18 PM

I have never met a serious, knowledgeable car guy or girl that gives a rat's behind about NASCAR.

NSCAR is a circus people got to and root for their favorite drivers.

In real racing, people go to root for their favorite manufacturer.

Ashley

July 23, 2008 09:39 AM

I find it fascinating that all the posters who deride Welsh's intelligence and are offended at the NASCAR stereotypes SPELL LIKE SECOND GRADERS.

Andrew Odom Jr.

July 23, 2008 10:55 AM

There's some elements of truth in what David Welch, but he should have toned down his elitist tone. I say that as a guy from the "East Coast" who has enjoyed the humble Volkswagen (air and water-cooled) since my father got into them in the early 60s. At the same time, I grew up also in and Fords and dislike this black and white attitude about cars, which all have such great heritages and personalities.

I'm not much for NASCAR but appreciate that many like it. It's as American as apple pie. Why bash it? GM is wise to trim costs, of course, but the idea of Toyota making in-roads should make any American a bit concerned for this bit of Americana.

I'll take baseball anyday over NASCAR, but it's a source of joy to many fellow Americans and car lovers and is a part of the spectrum.

pes

July 23, 2008 12:05 PM

GS has a point here. NASCAR fans need to do a little spellcheck before sending their tirades or else they have proven the stereotype as fact.

Fuyuki

July 23, 2008 12:12 PM

NASCAR is not considered to be technologically advanced as David Welch points out.
However, it does llustrates a lot of American enthusiasms to the extent I believe NASCAR is a part of American culture.

I understand the past management of GM lead to the current financial situation, but I wish GM continuing the support for NASCAR for the sake of American image with some extras.
As I believe that U.S. is still the world leader, I would like to see NASCAR to take initiative with environmental friendliness to the motor-sport world. I don't want to see Prius on the course, but can't they try to develop 200mph cars with eco-frienliness while keeping wild American craziness in a good way!

Tyler Hurst

August 3, 2008 07:08 PM

Bobby Montgomery-

You lack an understanding of marketing and advertising. Most of the people who watch NASCAR are going to buy american-made, GM cars, if they don't already. If they don't already own a GM car, no amount of advertising is going to change their mind.

And yes, NASCAR is boring and full of rednecks, but that doesn't mean it's not wildly popular and entertaining for fans.

Bobby, how about you spend more time working on your car and farming than on the internet. It really doesn't suit you.

Meh?

August 3, 2008 07:27 PM

Look there are reasons to hate NASCAR, but the ones Mr. Welch pointed out are pointless.

PXLated

August 3, 2008 09:17 PM

I agree with the article in that the car companies haven't introduced anything new or innovative styling wise. I'm not living in the past and craving the styling of my youth. On the other hand, nothing says nose in the air, opera/ballet/classical music lover than a Toyota Prius. Love the concept and economy but wouldn't be caught dead in one "-)

A Nascar Only Sports Fan

August 3, 2008 10:58 PM

Too funny! Beyond the apparent, 'geek doesn't get racing,' the author states the many typical cliches of non-Nascar types. Boring, yawn, low-tech, but here it's even worse. Simply no understanding of the technology that is Nascar, nor the skill required just to keep these cars, that drive on the edge, lap after lap, on the track. A real race fan can detect all the nuances of a Nascar race, even when the action is on the periphery of the screen, and not being covered by commentators. No counter needs to be made here, because what is Nascar, is all that really needs to be stated. Follow the money... (Ticket sales, fan base, sponsorship, marketing, TV deals, $$$$$$$). Maybe as a face saving gesture, maybe the author would like to compare the success of Nascar with any other non-city non-franchised sport? ;D Or, maybe he'd like to explain the huge success of Nascar instead? ;D

David Welch

August 4, 2008 03:21 PM

David Welch here again. I wrote the blog post in question. It really has struck a few nerves. First, I'll reiterate that I never said GM should dump NASCAR. It clearly reaches a large group of car buyers. I simply said that the company should cut back on sponsorships and try marketing methods that reach another demographic, namely those who shop imported brands. But to the readers who post comments about NASCAR's overwhelming popularity, I'd point out that, according to USA Today, NASCAR's ratings were off significantly last season and the year before. The sport is a useful marketing tool, but it has its limits.

billso

August 5, 2008 02:37 PM

NASCAR isn't as much a sport as it is a spectacle. If GM management can't afford to sponsor the NASCAR circus, then the fans will just have to deal with the loss.

Terence Fischer

August 6, 2008 09:54 AM

GM and the other manufacturers would be better off spreading their advertising dollars into other racing series. NASCAR provides no new information in car or engine design. Sports car and open wheel racing which allow the manufacturers to use the latest technology provides the tools to improve thier product and image. as Tony Stewart said NASCAR is the World Wide Wrestling of racing. It's all show.

JackMaxwell

August 6, 2008 10:57 AM

So a 100 million dollar program that reaches millions of people should be cut back because the author doesn't like NASCAR?

How do you feel about the Corvette program in the American LeMans Series?
That is about 20 million a year spent on racing no one in front of almost nobody.

For the casual racing fan who hasn't heard of the ALMS you need to know that for two years now GM has raced there against virtually no one as there are no other cars racing in their class. (OK, there is a lone Aston Martin entered in the GT1 class this coming weekend)

Talk about a snoozefest! Four classes of cars and just two Corvettes "racing" one another.

The author admits he likes the ALMS. Should the 20m Corvette program be cut from GM's budget as well?

I love sportscar road racing, but the NASCAR race at the Watkins Glen road course is what I'll be watching this Sunday, not the tape delayed ALMS and its four hours of boredom from Road America, featuring the Corvette parade.

Ron

August 6, 2008 05:45 PM

Kudos to Mr. Welch. Can anyone give me a good reason why GM should invest so much on marketing a platform (NASCAR) that bears absolutely NO resemblance to the products that it sells in its showrooms? I'll wait for an answer.

That's what I thought...

The CoT signifies all that is wrong with NASCAR (along with its refusal to embrace 20th century technology). The only visible difference between stock cars are the manufacturer decals. Spec car, spec tires, spec fuel, etc? ZZZZZ...

Say what you will about GT1 in the American Le Mans Series but you can't deny the level of true manufacturer interest - Audi, Porsche, Acura, Aston Martin, Mazda, Ferrari, Panoz, Ford, Dodge and GM among others. And they are racing in a place where (imagine this!) there is an actual tie-in to the road cars. How revolutionary! Look at Audi's R10 diesel prototype. It's a marketing platform on wheels for the type of clean diesel technology that it will introduce in the winter for its road-going cars. There even are differing types of fuels and an emphasis on alternative energy. Ask anyone who works for a manufacturer how critical that is to that company's future strategy. Diesel, ethanol, hybrid and (potentially) hydrogen? It's allowed under ALMS rules.

To me there is no contest. That's why I'll be watching the real cars of tomorrow at Road America this weekend.

JackMaxwell

August 13, 2008 01:12 AM

The taped delayed "real cars of tomorrow" were pretty exciting to watch. We'll, at least the GT2 class.

Anyway,an M3 coupe is 60-70K.
The RS4 is 65-70K.

Would GM be more successful if they were to have Chevrolet and Pontiac produce cars such as these at the same price points?

It seems like the Camaro SS and Pontiac G8 GT are both pretty good cars and cost only about half of what the German V8 cars do.

FrankDeZappa

September 21, 2008 04:06 PM

This had to be one of the worst articles in terms of bias I have ever read. Mr. Welch shows he has no class, or editorial skills in righting such a piece of junk such as this. I am sorry, but it is terrible.

American's should be loyal to Dodge, Ford and Chevy, but pulling out of NASCAR will nto help at all.

Mike Emmerich

September 25, 2008 10:04 AM

David Welch is an absolute idiot and obviously has no clue what he is talking about. Like all "good" journalists, he has an excellent way of enraging readers just because he can. His message in his Aug 4 reply was what the message should have been, not a slam on a sport he knows nothing about. Would we give up our Bristol tickets because we would miss a women's tennis game? I do not think so. Well, he saved me some money by not buying Business Week or coming back to this website.

kyle

April 1, 2009 01:11 AM

This guy is a huge douche bag who knows nothing about racing and this article is nothing but his crappy opinion

2003m3

July 1, 2009 05:15 AM

David,

I absolutely agree with everything you say: about GM, about the American auto industry, and about NASCAR.

I also think it is very funny to read some of the redneck responses, full of vitriol, not to mention the hilarious misspellings! Ha-ha-ha! Your article really stirred the pot with the stupids, didn't it? :)

2003m3

July 1, 2009 06:18 AM

JackMaxwell: a lisght correction to two of your statements.

1.- The Pontiac G8: very good car, performance sports sedan, but it is not an an American car. It is an Australian-designed and built Holder Commodore. Perhaps because it is not designed and built in Detroit it is a good car.

2.- LeMans racing. I cannot follow the American LeMans series nowadays, simply because it does not come on the satellite where I live at the moment. At the 24 Hours of LeMans, this year there were 2 Corvette teams (one French, one American), plus an Aston Martin and a Lamborghini. One of the Corvettes won this year. Last year they were beaten by the Aston Martin team.

LeMans is REAL racing. Nascar is a circus.

2003m3

July 1, 2009 06:38 AM

Bubbas, ya'll need to learn how to spell and then perhaps your arguments will have some weight. There are some real gems here.

David, "you are anta Amercan" because you are "takeing ... about BMW M3 and Audi S4 and watch Formula 1 and Le Mans series races." ... "that is realy good car sports compered to Nascar" ...and... "you are very Biss, stay with the E U. an go no were waite till Ford An Chevy an Dodge come homme to roat". Can another redneck please translate the last piece, so that us the normal people can understand what this particular redneck had in mind?

Or this one: David Welch's "openion artical" is all wrong because "Nascar is the #1 raceing seris in the WORLD" (didn't you know?), "where as ... NASCAR keeps its Old School rules ... to keep under funded teams able to compeat". And darn it, no "electronic feul delivery"! See? There!

NoJobBob

July 11, 2009 10:41 PM

The real joke is GM's NASCAR sponsorship contracts blew through the bankruptcy court no problem. Yes they made some cutbacks but will still sponser the Big Boys.GM had a $2,538,750 payment due to RCR Enterprises but Childress would not discuss the payment.“That’s kind of personal, I didn’t ask you if you got your paycheck this week,” he said.
But he was confident the GM restructuring won’t hurt his organization.
The same bankruptcy court also blew away 50,000 retirees health care plans.
NASCAR or Health Care ??? Good choice
kill off the Health Care so we can keep
JR's crew on the track.

Kevin

August 26, 2009 10:31 PM

Just goes to show how the 'elitist mentality' of the out of touch media is with the middle part of America. Big surprise there. I guess that is why Toyota has got involved in NASCAR and Nissan is going to in the near future. Idiot!

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Want the straight scoop on the auto industry? Detroit bureau chief David Welch , Dexter Roberts and Ian Rowley bring daily scoop, keen observations and provocative perspective on the auto business from around the globe. Read their take on such weighty issues as Detroit’s attempt at a comeback, Toyota’s quest for dominance and the search for an efficient car.

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