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Old 12-09-2002, 10:27 AM   #1
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Default Rally Over F1

Automakers choose rallying over F1

By Wim Oude Weernink
Automotive News / December 09, 2002

A growing number of automakers see rallying as a popular and more cost-effective way to race than the more glamorous Formula One.

Automakers traditionally view motorsports as a prime way to build brand image and sell cars to race fans. Formula One's colorful spectacle of 1,000-hp racers hurtling around tight tracks in exotic locations long has made it racing's top attraction.

But Formula One is in a slump. Skyrocketing costs are bankrupting smaller teams. Ferrari is so dominant that bored viewers aren't watching as much as they used to.

Annual team costs $20 million-$80 million $75 million-$300 million
Annual TV viewers 500 million 3 billion
Competitors Peugeot, Mitsubishi, Skoda, Ford, Hyundai, Subaru, Citroen Ferrari, Honda, Toyota, Mercedes-Benz, BMW, Jaguar, Renault

Meanwhile, the number of rally fans is growing rapidly. They watch TV coverage and also show up along cross-country routes to watch what resemble production cars race against the clock.

The production look-alikes are high-tech prototypes, with more than 300 hp and four-wheel drive.

Said Corrado Provera, sports director of Peugeot: "It has been cheaper for us to become world rally champion, and with a lower budget, than to earn only a few points in Grand Prix racing when we were only suppliers of F1 engines. We just did not get enough return on investment in F1."

Peugeot left Formula One to re-enter rallying in 1999. It since has won the world title twice with its 206 model.

Budget advantage: Rally

Automotive racing teams rarely reveal actual budgets. International Sportsworld Communicators, which runs the World Rally Championship, estimates that rally teams can spend more than $50 million annually.

During the 2002 rally season, Ford Motor Co., Citroen, Hyundai, Skoda, Mitsubishi, Subaru and Peugeot all entered official teams with three cars each. Peugeot won the world title.

"That (world championship title) cost Peugeot between $70 million and $80 million," a rival team manager said. "We know what we have spent ourselves."

At the end of each season, Peugeot sells team cars to private buyers at $500,000 each to reduce team expenses.

Meanwhile, insiders say 2002 Formula One budgets ranged from $115 million for Mercedes-Benz to $275 million for Ferrari and Renault.

Though not officially confirmed, Toyota's three-year budget to enter Formula One with a car completely designed in-house is about $400 million.

Even carmakers that only supply engines to Formula One teams have budgets in excess of $100 million.

But, despite the cost, Toyota is committed to Formula One.

"We will communicate the spirit of challenge in this sport," Shuhei Toyoda, president of Toyota Motor Europe, said this year.

Toyota expects to achieve some serious results by 2003, its second full year of actual Formula One racing.

Improved brand awareness

Formula One participants say the circuit improves both brand awareness and image.

"But most carmakers are already well known, so they only seek an improved image, and it is extremely expensive as well," said John Jullens, principal of BBDO consulting in Munich.

"F1 engagement makes sense for Ferrari and also BMW and Mercedes-Benz because these brands are linked with fast cars and performance," he said. "But for Toyota, F1 may help to improve their image, but then they have to be successful."

This year, about 3 billion TV viewers worldwide watched at least one of the 16 Grand Prix races. But the big exposure creates its own potential for negative publicity. Jaguar's three-season Formula One involvement is an example.

Jaguar finished seventh of 10 teams this season with only eight championship points. The most commonly televised shots of its distinctive green racers were mechanical failures - drivers climbing from stalled, smoking cars.

More viewer-friendly

Rally supporters say the sport generates more enthusiasm among fans than Formula One.

According to International Sportsworld Communicators, more than 500 million people watched 14 international championship rallies on TV this year. During the first four rallies this year, TV viewing rose 12 percent and the minutes broadcast increased by 43 percent.

"We expect total TV viewing to increase by 50 percent within five years," said Marc de Jong, director of sports affairs for the Sportsworld Communicators. "But this year we have seen an increase of 500 percent in the U.S.A. alone."

In addition to TV viewers, de Jong said, "10 million people actually lined up along the rally stages to watch rallying live."

Sportsworld Communicators said 59 percent of adults in major media markets are aware of rallying as a sport. In several major markets, awareness is even higher: for example, 82 percent in Spain and 70 percent in the United Kingdom.

Younger fans

Some automakers say rallying is better marketing because fans see race cars that look more like production vehicles but are modified under the skin.

"But you have to be successful in competition and offer a good product," said Peugeot's Provera. "With our championship cars we have proven why the Peugeot 206 is Europe's best-selling car. In turn, our performance also made it clear that the 206 appeals to young customers because sports success means fun to drive."

Since Peugeot joined rallying with the 206 three years ago, the average age of the 206 buyer has come down from 43 to 37, he said.

Skoda also says it has benefited from rallying.

"It has offered us enormous marketing and promotional opportunities in new markets like Argentina," said Pavel Hortek, marketing manager of Skoda Motorsport.

Skoda has limited its annual rallying budget to $20 million, the lowest in the sport. Its Octavia model is larger and heavier than most entries and has not made a big impact. But that could change next season, when Skoda is expected to switch to the newer and more agile Fabia supermini.

"It looks as if automakers will focus on promoting their compact models via rallying," said one rally insider. "Ford will do that with the Fiesta in 2004."

Mitsubishi expanding

Mitsubishi, already a several-time world champion in rallying, will take a dual strategy in rally events: It will compete in World Rally Championship events with the Lancer and in long-distance cross-country events with the Pajero sport-utility.

"With Lancer we will focus on improving our image as a performance brand, while with Pajero the aim is to strengthen our quality and durability image," said Ulrich Walker, executive vice president of Mitsubishi Motors Corp. "And we will also use competition to promote new design developments of performance models. Motorsports and its related activities will contribute to our turnaround efforts."
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Old 12-09-2002, 12:01 PM   #2
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So, maybe creating more passing opportunity isn't the answer or F1? Last time I watched WRC, there weren't a lot of passing! And more reliable cars isn't the answer either, as so many top WRC drivers don't finish a rally!

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Old 12-09-2002, 12:30 PM   #3
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Let's not forget that rally also has team orders, and had a dominant team (Peugeot), to boot.


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Old 12-09-2002, 12:42 PM   #4
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I think the gist of the article is that manufacturers get more bang for their buck with rally over F1 and that it's getting even better.
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Old 12-09-2002, 01:06 PM   #5
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Originally posted by gtguy
Let's not forget that rally also has team orders, and had a dominant team (Peugeot), to boot.
That's a good one, Kevin. Peugeot is killing the sport! Let's ban Peugeot from the sport!!!

BTW, I keep hearing Ralph Shaheen says that the WRC drivers are "holding back", and is now "going to attack mode", etc... Geez, the fans are so cheated that the drivers are not going 100% all the time!

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Old 12-09-2002, 06:43 PM   #6
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uhhhh Peuguot doesnt exactly have the dominance Ferrari has. It just a good car with good drivers. There are other good drivers and other good cars. Part of it is luck, but not all. They are the best. But things will change. Soon.
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Old 12-09-2002, 09:18 PM   #7
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The best description I ever heard of a rally driver:

"Someone with the ability to take a car at impossible speeds over impossible roads and actually have fun doing so"
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Old 12-10-2002, 06:00 PM   #8
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Well aparently Hyundai America doesn't see US rallying as cost effective for advertising. But even with younger viewers and lower budgets it all translates into buying power.

How many F1 fans by Ferraris?

How many rally fans buy evos and wrxs?

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Old 12-10-2002, 06:31 PM   #9
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I personally see f1 boring when compared to wrc or even scca pro-rally.
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Old 12-11-2002, 11:38 AM   #10
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Default It might change...

Rally does give more bang for the buck, F1 knows its boring. Shumey wins every race, or waits for Ruben to move over to let him win.(mike did hook him up though) I think you have to see the following of F1 in Europe, they go nuts for it. I like to watch both when I can, I would like to see them switch for a promo race. Could the F1 drivers handle Rally cars? Or can Rally drivers handle F1 cars? That would be neat to see...
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Old 12-11-2002, 11:53 AM   #11
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I would imagine Hyundai is probably right about Rallying in America.

Needless to say, SCCA Pro Rally doesn't give them the visibility that WRC does. I'm not surprised they pulled out.
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