This weekend sees the first ever South Korean Formula 1 Grand Prix. This is a push into new markets for Formula 1. This is why they are trying to push into North America and the Middle East. But it seems that it’s receiving a cool reception from the very people whom they are trying to woo. Namely, the car business.
Reuters reports that despite the inaugural South Korean Grand Prix, South Korean car businesses are staying away. Particular, Hyundai. Since the recession, Toyota and Honda upped their sticks from F1. F1 is trying to bring other car makers into the fold. Hyundai was a name they wanted to win, but according to an F1 official, it just isn’t going to happen. “The Grand Prix could be a gateway to becoming a premium car brand, but Hyundai is simply not interested in Formula 1,” said the anonymous F1 industry official, “It also requires long-term investment of several years at least and it’s doubtful whether Hyundai has that patience.” Now that’s interesting. Is Hyundai impatient? Is Hyundai trying to expand faster than they should? I hope not. Or maybe they really are committed to becoming the next Toyota?
No. Their reason is more logical than that. “The utmost priority is to boost brand image in Europe,” said Chung Eui-Sun, Vice chairman of Hyundai Motors, at the Paris Motors Show. And Hyundai wants to focus on that problem more. The lack of brand recognition. So spending money on motor racing, when it’s bigger, richer rivals, Toyota and Honda, failed, doesn’t strike as an appealing prospect. It is estimated that Toyota spent $300 million on F1 and Honda, even more than that. That kind of money can buy you a lot of TV and Radio airtime in Europe.
Nope, Hyundai just wants to concentrate on their products and get the message across that their cars aren’t junk any more. Also, F1 is a risky investment: If you win, you get a lot of not really free PR. If you lose, your money is gone. If the car goes up in flame or your racers die, you feel it in sales. Seems like a sensible marketing strategy on Hyundai’s part: Say no to drugs. Don’t get Ecclestoned.