Prafull Koli
05-23-2003, 03:00 PM
Toyota, Honda Bump General Motors From Front Slots at Indy 500
Indianapolis, May 23 (Bloomberg) --
Toyota Motor Corp. and Honda Motor Co., Japan's largest carmakers, will power cars occupying the first 17 positions in Sunday's Indianapolis 500. Starting no higher than 18th: General Motors Corp., whose engines had dominated the car race for the last six years.
Japan's automakers, having increased U.S. market share to a combined 29 percent, are taking their challenge onto the most storied American racetrack. This year marks Toyota's debut at Indy and Honda's return after eight years away. Toyota also lured Indy team owner Roger Penske away from General Motors.
``Indy is still a big deal,'' said Lee White, group vice president of Toyota's U.S. racing development unit. ``There's still value to be made in marketing.''
The rivalry at Indianapolis mirrors General Motors' broader business challenges, said Dan Poole, a vice president of equity research at National City Corp. General Motors' share of the U.S. market has dropped to 28 percent from more than 50 percent four decades ago.
``The Asian manufacturers have been very consistent for 25 years in market-share gains and technology gains,'' said Poole, whose company manages $23 billion, including General Motors shares. ``That's showing no signs of letting up and is intensifying.''
The Indy 500, with about 300,000 track spectators and more than 5 million U.S. television viewers, provides participants with about $65 million worth of free publicity, according to Joyce Julius & Associates. The Ann Arbor, Michigan, sports-marketing company estimates the TV time devoted to each carmaker and multiplies it by prevailing advertising rates.
500 Titles
The Indy Racing League, which sponsors a series of U.S. races, had been a bright spot for General Motors. The world's biggest carmaker recorded 63 wins at the 500 and other league races from 1997 through last year. That was part of a broader motor sports program that includes Chevrolet stock cars for Nascar drivers Jeff Gordon and Dale Earnhardt Jr.
At the Indy 500, where low, single-seat cars without fenders challenge the oval track at more than 200 miles (322 kilometers) per hour, General Motors engines proved less powerful in qualifying rounds than Toyota's and Honda's.
And it lost the Penske team. Penske drivers have won 12 Indy 500 titles, including the 2001 and 2002 races. Penske has long- time business ties with Toyota, including owning the largest U.S. Toyota dealership in Southern California.
`We're Not Happy'
``We're not happy with where we are'' in the race's starting lineup, said Steve Shannon, General Motors' executive director for marketing services, who is trying to figure out why General Motors engines underperformed Toyota and Honda. ``If we knew, we'd fix it immediately.''
General Motors shares have fallen 49 percent in the last 12 months, while Honda is down 24 percent and Toyota 20 percent.
On the Indy circuit, General Motors designs engines and builds parts. Independent companies contract with the automaker to build the engines and sell them to race teams. Other companies produce and sell the chassis and body.
Toyota produces all of its racing engines internally. Honda is working with engine designer and builder Ilmor Engineering Inc. of Plymouth, Michigan, which is 25 percent owned by DaimlerChrysler AG. Honda joined with Ilmor after a late decision to race at Indy, said Robert Clarke, vice president of Honda Performance Development.
``If you don't fight to win, you only harm your image and your brand,'' Clarke said.
Andretti
Until 1995, the bulk of Indy 500 racing teams were competing in a series of races organized by Championship Auto Racing Teams Inc., known as CART. Tony George, whose family has owned the Indy track since 1945, had disagreements with CART management and formed his own Indy Racing League for the 1996 season.
Indianapolis, May 23 (Bloomberg) --
Toyota Motor Corp. and Honda Motor Co., Japan's largest carmakers, will power cars occupying the first 17 positions in Sunday's Indianapolis 500. Starting no higher than 18th: General Motors Corp., whose engines had dominated the car race for the last six years.
Japan's automakers, having increased U.S. market share to a combined 29 percent, are taking their challenge onto the most storied American racetrack. This year marks Toyota's debut at Indy and Honda's return after eight years away. Toyota also lured Indy team owner Roger Penske away from General Motors.
``Indy is still a big deal,'' said Lee White, group vice president of Toyota's U.S. racing development unit. ``There's still value to be made in marketing.''
The rivalry at Indianapolis mirrors General Motors' broader business challenges, said Dan Poole, a vice president of equity research at National City Corp. General Motors' share of the U.S. market has dropped to 28 percent from more than 50 percent four decades ago.
``The Asian manufacturers have been very consistent for 25 years in market-share gains and technology gains,'' said Poole, whose company manages $23 billion, including General Motors shares. ``That's showing no signs of letting up and is intensifying.''
The Indy 500, with about 300,000 track spectators and more than 5 million U.S. television viewers, provides participants with about $65 million worth of free publicity, according to Joyce Julius & Associates. The Ann Arbor, Michigan, sports-marketing company estimates the TV time devoted to each carmaker and multiplies it by prevailing advertising rates.
500 Titles
The Indy Racing League, which sponsors a series of U.S. races, had been a bright spot for General Motors. The world's biggest carmaker recorded 63 wins at the 500 and other league races from 1997 through last year. That was part of a broader motor sports program that includes Chevrolet stock cars for Nascar drivers Jeff Gordon and Dale Earnhardt Jr.
At the Indy 500, where low, single-seat cars without fenders challenge the oval track at more than 200 miles (322 kilometers) per hour, General Motors engines proved less powerful in qualifying rounds than Toyota's and Honda's.
And it lost the Penske team. Penske drivers have won 12 Indy 500 titles, including the 2001 and 2002 races. Penske has long- time business ties with Toyota, including owning the largest U.S. Toyota dealership in Southern California.
`We're Not Happy'
``We're not happy with where we are'' in the race's starting lineup, said Steve Shannon, General Motors' executive director for marketing services, who is trying to figure out why General Motors engines underperformed Toyota and Honda. ``If we knew, we'd fix it immediately.''
General Motors shares have fallen 49 percent in the last 12 months, while Honda is down 24 percent and Toyota 20 percent.
On the Indy circuit, General Motors designs engines and builds parts. Independent companies contract with the automaker to build the engines and sell them to race teams. Other companies produce and sell the chassis and body.
Toyota produces all of its racing engines internally. Honda is working with engine designer and builder Ilmor Engineering Inc. of Plymouth, Michigan, which is 25 percent owned by DaimlerChrysler AG. Honda joined with Ilmor after a late decision to race at Indy, said Robert Clarke, vice president of Honda Performance Development.
``If you don't fight to win, you only harm your image and your brand,'' Clarke said.
Andretti
Until 1995, the bulk of Indy 500 racing teams were competing in a series of races organized by Championship Auto Racing Teams Inc., known as CART. Tony George, whose family has owned the Indy track since 1945, had disagreements with CART management and formed his own Indy Racing League for the 1996 season.