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Death of car racing?
Toyota is out of Formula One -- one of a long line of car companies abandoning professional racing.
The three major car racing circuits -- Formula One, NASCAR, and Indy Car -- have built a multibillion dollar business. Formula One revenue, including sponsorships and broadcast fees, is estimated at $3.9 billion a year, which is more per event than either the NFL or The Premier League of soccer clubs.
Toyota (TM) has elected to pull out of Formula One because of cost considerations. The world’s largest car company has lost money for more than a year.
Reuters estimates that Toyota has spent $300 million per year on its Formula One campaign. Honda (HMC) pulled its cars from the circuit earlier this year.
The Toyota retreat can be added to news that the Obama Administration has pressured Chevy and Dodge to pull out of the NASCAR racing series to save $250 million a year. The two companies have been pillars of NASCAR and there are no other auto firms with large enough budgets to replace them.
Revenue at the International Speedway Corp., which operates a large number of race tracks that host major car races, fell to $179 million in the third quarter from $213 million in the prior year period. Operating income dropped from $61 million to $16 million. The company said its outlook for the balance of the year is poor.
The car industry’s global problems will almost certainly mean major cutbacks in professional auto racing. It remains to be seen whether any of the big car companies recommit to the sport in 2010 or 2001. One of more of the circuits could disappear if that does not happen.
Top Stocks writer Douglas A. McIntyre is an editor at 24/7 Wall St.
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Historically racing suffers during difficult times. Look at what transpired during WW2 and during major economic downturns. People simply don't have as much disc. income to play with and B2C companies aren't making enough money to pay to be competitive. During good times, it's an effective marketing tool but times are difficult.
Also it should be noted that NASCAR's decline started a bit before the economy turned. Why, mainly for two reasons. The first is most followers are patriotic in nature and love the "All American" sport. That was until Nascar allowed Toyota to come play in the American sandbox. Moreover credible sources have indicated Nascar gave Toyota some advantages to make them competitive in year one which was not done when Dodge came back into the fold years prior. To make things even worse, the "Car of the Future" is run in all camps so there is nothing "stock" about the vehicles any more. Wanna spawn some new interest Nascar? How about putting Dodge Challengers, Chevy Camaros and Ford Mustangs in a series on Saturdays before the "big Sunday race" and watch how many Americans get interested again. Isn't it "Business 101" to know what your customers want BEFORE you put the product out the door?
Charles... If NASCAR were to allow a race with 2010 Mustangs, Camaros and Chargers, they would have to start the race with a yellow flag. Debris on the track. Not only would NONE of these cars survive 500 miles of being driven at top speed, but with the almost certain malfunction of ABS and traction control systems they would wreck on thier own. Can you imagine all the warning beepers going off to let you know there is something 4 feet away from your rear bumper? The brakes couldn't hold up therefore we'd have deployed air bags in every car. The auto response to ON-Star would shut them down and dispatch 43 ambulances to the track.
My point is that cars being manufactured today are junk. They are over engineered to protect drivers that have no business having a drivers license from themselves and each other.
My daily driver for the last 20 years has been a Toyota truck. The same Toyota truck. Still doesn't have a rattle in it, and no, it's not for sale. I suggest that GM, Ford and Chrysler each try to aquire one and examine it closely. Perhaps someday they too can build a quality product.
Mabe Americans should buy American made cars. That would probably help save American manufacturing. There a many other jobs that rely on the auto industry, example I am laid off from a paper mill in Northern Michigan which main products went to the american auto industry. Keep buying forign and we will kill our economy. If the Big 3 ever left Nascar that will be the end of racing. I dont know of anyone that wants to watch riceburner stockcar racing. Way to go throwing America out of the window
Please lets end this argument of which's harder to drive once and for all. Please consider this:
Now, I saw an episode of American Chopper, where Mickey Tuttle drove a Waltrip stock car at speed, the day he arrived at the track.
There is absolutely no possible way, even if he could fit, that this would have happened in an F1 car. No. Possible. Way. Ever.
For the record:
-F1 cars run slick (treadles) tyres-in the rain.
-The Dodge/Chevy pull out rumor was an April fools joke. (Has nothing to do with politics-it was a bad joke that's become Obama bashing fodder)
-Most technologies developed for implementation on road (retail) vehicles occurs in F1--NOT stock cars: ABS, traction control, auto shift, hybrids...all Formula 1 developed tech.
-F1 is in relatively good financial shape--see the new Yas Marina circuit in Abu Dhabi. And there are a handful more countries clamoring to be the next to host a race. There will be more teams and races next year. The reality is the world economy is suffering-not just a specific series of racing vs another. Therefore the correct thing to do is to cut the cost of racing. The real problem in F1 is the political jockeying going on between the FIA, the corporate shareholders, and FOTA (the teams association) and the instability with regards to frequent rule changes. But hopefully this will clear itself up with the implementation of a new regime within the FIA.
-With regards to brilliant climactic finishes in races: I like to think that life's meaning lies within the journey-not the destination. That goes for all of racing too.
The key to making any series work is to pass on the majority of the cost to sponsors/investors. Nascar will have to cut back. F1 is fun to watch also, but racing is racing. I enjoy it all. With government bailouts in the bank accounts of these companies, how can they logically invest $250M into ANY sport?
For all the purists out there lambasting NASCAR, get a life. I am a fan of almost all types of racing except midget cars and those modified ones. I dont care for the trucks either. I was watching Indy Car in my early teens and then on to NASCAR and F1. I believe there are qualities for each type.
What I find most disturbing is that obama is pressuring Chevy and Dodge to pull out to save $250 million a year. He can blow me. With the advances made on stock cars that can be used in retail vehicles, it would be ridiculous for Chevy and Dodge to pull out because of the money and lives saved due to said advances. Also, it sounds to me like MOST of the people commenting here have no frikken clue as to what racing is about. For those that do, Boogity! Boogity! Boogity! Lets Go Racin' Boys! GREEN FLAG! That goes for F1 and Indy as well. Lets hear it for Danica.
StockScouter data provided by Gradient Analytics, Inc.
Quotes supplied by Interactive Data.
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