NASCAR's real challenge

Posted by: David Welch on October 24, 2008

Detroit’s dark days cast a long shadow. And NASCAR is starting to shiver in that shade. An Oct. 23 story in the Washington Post revealed that the Big Three are pulling back on sponsorships at NASCAR races. General Motors said that would happen back in July when the company announced sweeping cost cuts.

That means NASCAR will have a make-or-break year coming up. The typical NASCAR team gets 80% of its funding from corporate sponsors, the Post said. A lot of those sponsorships deals are three-year contracts that were forged two to three years ago when NASCAR’s popularity was soaring, says Peter DeLorenzo, publisher of Autoextremist.com. That means that next year and in 2010, when companies are either struggling through a recession or limping out of one, NASCAR and its teams will be trying to get companies to re-up their sponsorship. Marketing budgets will still be thin.

There’s one more challenge to America’s favorite motor sport. As the Big Three pull back on NASCAR (assuming the U.S. carmakers emerge from the credit and economic mess) they will have lived a few years with a smaller presence at stock car races. They may finally realize that they didn’t sell as much on Monday after winning on Sunday as they thought. So the carmakers could redeploy marketing cash elsewhere just as they have shifted away from traditional media. Or, as DeLorenzo says, “NASCAR hit its peak a couple of year ago.” If the sport can’t find other sponsors or revenue sources, it could keep slipping from that peak. And I was just gettin’ a hankerin’ to watch cars go ‘round in circles.

Reader Comments

Dearborn Observer

October 24, 2008 1:08 PM

Arguably too, NASCAR's rise in the early '00s happened concurrently with peak of the Bush Administration and the Republican party in general. Now that the country is swinging toward the Dems and a new blue-state political/economic environment, NASCAR's deep Red-state roots are NOT going to serve it well, Detroit 3 travails aside. And don't get me started on the whole Car of Tomorrow debacle! Maybe NASCAR will use this time to get back to what it used to be about - racing actual stock cars!

Snoz

October 25, 2008 5:58 AM

Once again, the Big3 is surrendering battlefield to Toyota, Honda, and Nissan. Except this time, it's the NASCAR, the heartland of America. At this rate, Toyota will be moving into Detroit's Renaissance Center as landlord with GM and Ford as section 8 renters. What was once thought as a strategy to regroup, reinforce, and retrench, we now know the weakling Wagoner was planning a full retreat running like a coward from the advancing Samurai Watanabe. Perhaps the 3 stooges of GM, Wagoner, Lutz, and Wellburn, know that the public would not look too kindly upon them when Ninja Watanabe with sword in hand chase them down in NASCAR circles. As Ninja Watanabe sharpening his samurai sword for the final bonzai charge, we can almost hear the 3 little pigs' oinking, squealing, and belching in the farmland of America. At this rate, it will require a new form of farm subsidies combined with the approved $25billion auto bailout give-away to save their bacon.

James

October 26, 2008 3:48 PM

Once NASCAR went to the "Car of Tomorrow" every automaker should have automatically reassessed its involvement --and decided against continuing. A spec design helps no one "win on Sunday, sell on Monday".

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Want the straight scoop on the auto industry? Our man in Detroit David Welch, brings keen observations and provocative perspective on the auto business.

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