By on November 18, 2009

Tone-deaf marketing explained (courtesy:whybee.co.uk)

Yesterday Daimler announced that McLaren would be buying out Daimler’s interest in their joint venture Formula 1 team. Many, including board member Erich Klemm, thought this made all kinds of sense. “In the (car) factories, every cent is being turned over three times. The employees are feeling the financial crisis with shorter working hours and loss of income,” he continued. “In these economically difficult times, the company should invest in better marketing of its real cars.” My, what a novel idea!

But Klemm is on the board as a representative of the workers. As such, his view caries little weight with the blue blood leaders of the pack. With the McLaren venture out of the way, Daimler is now teaming up with the petro dollar rich Abu Dhabi investment fund to buy out champions Brawn GP. Matthew Curtin over at the Wall Street Journal thinks Daimler is pulling a brilliant maneuver:

Daimler might have got its timing just right. F1 suddenly has become cheap. A fight among manufacturers and the sport’s governing body, the FIA, on how to reduce F1 running costs has led to an agreement to cap spiraling budgets. One example: the limit of 16 engines per team of two drivers. In the past, teams would build as many as 100 a year. Those controls could reduce the cost for a stand-alone Mercedes team to €60 million ($89.8 million) in 2011 from the €240 million it would have spent two years ago. At that price, F1 becomes a competitive marketing strategy given an international television audience running into hundreds of millions a year.

Are people really going to be attracted to a Mercedes-Benz because they saw something with a three pointed star parading around the track on TV? Somehow I think this is more about perks for Daimler executives than it is about moving the metal. Matthew Curtin may already be salivating over his expected all access pass to the Daimler-Brawn hospitality tent.

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10 Comments on “Daimler Sells One F1 Team, Then Buys Another...”


  • avatar
    Boff

    Perks for executives as the reason for motorsports involvement? That’s a new one on me. (Although of course these perks exist in spades.) I still think it is genuinely about marketing road cars, say what you will about that.  Mercedes wanted to continue in F1 but had had a falling out with McLaren and was able to buy the brain of Ross Brawn for a comparative song. Too bad the likely drivers (Rosberg and Heidfeld) are both stiffs. The other downside is that there is no partner to blame should the season go pear-shaped (ask Honda, BMW, and Toyota how that feels).

  • avatar
    PeteMoran

    Formula One is just one giant wife swap sometimes. It can be hard to keep up.

  • avatar
    Spitfire

    I don’t expect Brawn to be at the forefront as they were this year. They got it right in the beginning of the and dominated with two past their prime drivers but very clearly were not fighting for wins in the latter half. In 2010 there are less changes and the consistant top finishers of years past are expected to play a much larger roll. McLaren, Ferrari and now RedBull have the best drivers and almost certainly will continue to provide them with above average equipment. I’d expect Brawn to be a consistent 7th and 8th place grid spot team assuming the new teams cannot create the fairy tail Brawn story again.
    Buying into the Brawn GP team after they win the title? Seems like a case of buying high and selling low down the road. Brawn had already planned to use Merc engines as they are regarded as the most powerful and reliable in the field. However this is F1 and Ross Brawn deserves it after what he was able to accomplish in 2009.
    As true marketing potential I still think F1 is valid, what does Chevy spend on all other advertising verses Nascar? I bet Nascar looks like a bargain in that light. Ferrari doesn’t advertise, they just race and it works. I know thats the extreme but its proof of the concept. Technological superiority is a perception that is highly valuable in the marketplace.
    Half way down the page is a really good representation of the F1 wife swap: http://en.wikipedia.org/wiki/Formula_One

    • 0 avatar
      Durishin

      Considering that the Brawn car was NOT designed for the Mercedes engine and that it was still fairly competitive at the end of the season, I’ll expect that when designed appropriately for the Benz lump – in 2010 – Brawn (nee) Mercedes GP will be at the top of the field – again!
       
      I think that – if you look over the last ten years of F1 – you’ll discover that it has been more of a Ross Brawn vs. Adrian Newey battle than a Ferrari vs. McLaren one.  I don’t expect that will change unless the Renault engine in the Red Bull (for whom Newey currently designs) is terribly underpowered relative to the Mercedes.

  • avatar
    Tosh

    And now that Button has signed with McLaren and Heidfeld expected to join Mercedes, I look forward to a proper ‘world’ drivers’ championship (in stereotyping) consisting of the cheery, valiant Brits at McLaren versus the Latin bickering prima donnas at Ferrari versus the kurt, efficient Teutons at Mercedes. Oh, the drama!

  • avatar
    blowfish

    Formula One is just one giant wife swap sometimes. It can be hard to keep up.
    What a brilliant keen observation,  Mosley could write a dissertation about it, or his version of Mein Kempf while grid locked in the SM position.

  • avatar
    Bimmer

    I’ve been watching F1 for over to fifteen years. But now with new regulations and with major car manufacturers (BMW, Toyota, Honda, Renault) leaving F1, I’m not so sure I’ll still be interested.

  • avatar
    Robstar

    I’m really hoping this cheapening of F1 will bring at least 1 race back to north america.  Right now you have to fly 7+ hours to get to a race.


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