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(Updates share performance from 15th paragraph.)
Aug. 5 (Bloomberg) -- Chinese solar companies including Suntech Power Holdings Co. are reaching into the homes of German soccer fans for the first time, ramping up advertising to oust local suppliers from Europe’s biggest electricity market.
Suntech, the world’s largest solar-panel maker, is putting its name on jerseys of 1899 Hoffenheim’s players who will be seen on German television tomorrow for their opening game in the Bundesliga, the most profitable soccer league. Yingli Green Energy Holding Co. this year began backing Germany’s most successful club, Bayern Munich, which aims to unseat champion Borussia Dortmund, sponsored by domestic panel maker Q-Cells SE.
“It’s an unprecedented marketing push,” Pascal Schulte, senior consultant at Sport+Markt, a sports marketing research firm in Cologne, said in an interview.
The Chinese are chasing business in the world’s biggest solar market, where German homes spent about $6.7 billion on panels in 2010 and officials face a power shortfall after Chancellor Angela Merkel pledged to shut atomic reactors by 2022.
“I can’t remember so many companies from a single industry, some of which many people hadn’t even heard of, entering the Bundesliga with such force in such a short period of time,” Schulte said.
The Bundesliga has the highest attendance in European soccer, according to Deloitte LLP, with an average of 42,700 fans at each game, compared with 35,363 in England’s Premier League. The German league says its games are watched on TV by about 14 million people.
The rush to build brand awareness increases pressure on German solar manufacturers Solarworld AG and Q-Cells. Together they burned through 343 million euros ($485 million) of cash in the first quarter, almost a third of their total, battling greater competition from cheaper Chinese photovoltaic devices.
German solar companies with 130,000 workers are defending their territory via their own sponsorships, which vie with the Chinese and global brands such as Coca-Cola Co. and Adidas AG.
While Q-Cells, the biggest German solar cell maker, sponsors the reigning champion, Bonn-based Solarworld has been backing the Cologne team since 2009 and runs advertisements featuring its star striker Lukas Podolski, who has scored 42 times for the German national team.
“We have a well-known brand and a two-year head start in Bundesliga sponsoring, so the pressure to catch up is with our competitors,” Solarworld Chief Executive Officer Frank Asbeck said in e-mailed comments.
“It’s an open race,” said Philipp Hasenbein, managing director of consulting firm Sportfive Germany, who advises 10 out of 18 Bundesliga clubs that now earn more ad money from solar companies than power utilities, such as EON AG and RWE AG. “I expect more companies from the solar sector to enter soccer sponsoring over the coming months.”
Today, San Jose, California-based SunPower Corp. signed a three-year jersey sponsorship deal with Bayer Leverkusen, the German soccer club said in a statement.
Yingli-backed Bayern Munich is the 8-15 favorite to oust Dortmund from the top position this year, according to Irish bookmaker Paddy Power. That means a successful $8 bet on the team would return $15 plus the original stake. Dortmund, the second favorite, is a 9-2 bet.
Getting their names in front of panel installers and millions of property owners who are their most important customers may help the strongest manufacturers differentiate themselves from rivals as demand slows, Lars Dannenberg, a solar analyst at the German bank Joh. Berenberg, Gossler & Co. in London, said in an interview.
The Germans are maintaining ad spending even as cheaper rivals erode their sales. Q-Cells shares have fallen 79 percent in the past 12 months, and analysts expect the company to post a loss of 43 million euros this year. Its cash dropped 41 percent in the first quarter, according to data compiled by Bloomberg.
“The pressure is on to find a good marketing solution and this is a good one,” Dannenberg said. “The attraction the Bundesliga has in Germany is enormous.”
Chinese equipment makers that added factories just before the market slowed this year also face a tougher times. Annual panel installations globally may rise as little as 19 percent in 2011, compared with a 135 percent gain in 2010, Bloomberg New Energy Finance analyst Martin Simonek said.
German developers installed 1 gigawatt of panels through May, compared with 7.4 gigawatts across 2010.
Suntech, having almost tripled net income last year, slumped about 42 percent since many solar stocks peaked on Feb. 18, while Yingli is down about 57 percent in that period.
Suntech likely will pay about 13.5 million euros over the course of the three-year jersey deal with Hoffenheim, according to marketing research company Sponsors Verlag GmbH.
“You will see our logo on TV every matchday,” Suntech spokesman Bjoern Emde said in a phone interview from Munich. Soccer teams in Europe generally sign one exclusive sponsor featured on team uniforms. Other clothing sponsors in the Bundesliga include Volkswagen AG, Deutsche Telekom AG and Russia’s OAO Gazprom, the world’s biggest natural gas provider, which pays Schalke about 18 million euros a year.
“Suntech is paying a considerably higher sum” to Hoffenheim than the previous jersey sponsor TV Digital, Schulte said. “The clubs are benefiting enormously from solar companies’ rush for sponsorship.”
JinkoSolar Holding Co., based in Shangrao, China, in July announced a three-year deal to place ads next to the playing field at Bayer Leverkusen’s stadium. Shanghai Chaori Solar Energy Science & Technology Co. in June agreed with Schalke, which stars record Champions League goalscorer Raul Gonzalez, to advertise at games and have players endorse their products.
The image push may help them increase sales even as the market slows by driving out smaller competitors, Dannenberg said.
“No one wants to be left behind,” Schulte said.
--Editors: Todd White, Peter-Joseph Hegarty
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