Once the Formula One Grand Prix was dominated by brands such as Lotus and Maserati, now the starting grid is more reminiscent of a car park for company directors.
Car manufacturers with deep pockets, frustrated by increased competition to win over consumers, are taking over the sport because it offers access to a global audience.
Last year, BMW made its entry into Formula One, as did Ford’s Jaguar. Toyota is the latest mass-market car manufacturer to join the starting grid and come under the spotlight of the world’s media. As the 12th team on the grid (12 is the maximum allowed in Formula One), it is the last entrant into next year’s competition.
Toyota has made no secret of its aim to change consumers’ perceptions about its marque, particularly in Europe, in an effort to lure younger customers into its showrooms.
Last year, Toyota overtook Nissan as the top-selling Japanese car in Europe, on the strength of its small car, the Yaris. But while the car company continues to grow, it is far from satisfied.
As well as wanting to capture a share of a market traditionally associated with cars such as Mazda’s sporty MX5, Toyota has indicated through a development partnership with PSA Peugeot CitroÃÂ«- the French-owned car manufacturer – that it wants a sizeable chunk of the small car market.
Although details of the “joint understanding” with PSA are unclear, it is known that the two companies are to share the costs of developing a small car platform for their own models. Insiders suggest that an official briefing by the companies, to be held on July 12, will reveal that, as a consequence of the joint enterprise, they aim to be producing 300,000 small cars a year in Europe by 2005.
Toyota’s timing is convenient. Not only will the car manufacturer be building more cars by 2005, but it will have started to establish itself on the Formula One grid. According to industry experts even if it hasn’t won a race by 2005, it will have reaped the benefits of its investment.
M&C Saatchi sponsorship chief Matthew Patten says: “The issue is about being competitive. So long as Toyota’s car is not coming last every time, which would mean bad publicity, its participation will change the perception of the brand.”
Patten says that Toyota has the challenge of finding its own territory in an already crowded Formula One market. He claims that Toyota is a family brand and that its F1 entrance will “butch up the brand’s image”.
Being a family brand is not something Toyota is keen to admit. A spokesman for the company says: “Toyota is famous for its broad range [of models]. It has clearly defined models in all segments.”
A Formula One team, with estimated running costs of $250m (£177.8m) a year, is an expensive hobby for Toyota. However, according to most industry experts, the money invested is generally recouped from sponsors, and the media exposure gained from the worldwide coverage could not be bought at any price. The global TV audience for each Grand Prix is estimated to be anything from 300 million to 500 million viewers.
Patten says:”It’s actually relatively cheap media. Not only will Toyota have sponsorship money, but there is no way you could ever buy that kind of media package.”
Toyota has appointed Sportsworld Media Group to attract sponsors to the team (MW July 5). These second-tier deals will be in addition to the deal signed last week between Toyota and the Matsushita Electrical Industrial Company, to make its Panasonic brand the team’s title sponsor.
Sponsorship experts claim that while Toyota has signed its largest deal with a fellow Japanese company, US or European global brands will be keen to establish tie-ups with the Panasonic-Toyota Racing team.
Patten says: “Formula One has become one of the most sought after sponsorship properties. Even companies like Coca-Cola are talking about getting involved.”
However, what may be more of an issue for Toyota is that it is a company which operates in a secretive and discreet manner. The motor racing world is known for its out-spoken characters who allow their emotions to surface – making the sport a global soap-opera.
Patten says:”Personalities like Eddie Jordan and Frank Williams take the sport a bit further. These large car corporations could make the sport boring by being too cautious.”
Toyota will also need to create some form of competitive edge and personality to set it apart from the other 11 teams – including Ferrari, which has the largest following.
However, any technological advances Toyota makes in motor sport are likely to be incorporated into its range of cars and even its marketing and advertising strategy. The ABS breaking system, for example, was originally developed in Formula One racing.
Toyota European sales and marketing director Takis Athanasopoulos has been quoted in the press as saying that it will take ten years before he is completely satisfied with Toyota’s brand image in Europe. Toyota is entering Formula One several years behind the Grand Prix leaders, but within ten years it may have begun to win races and have elevated its marque through its association with world-class motor sport.