Via Nascar and champ Busch, Toyota targeted red, white and blue fans and reaped loyalty green

Bloomberg

One year into its Nascar Sprint Cup experiment, Toyota took new driver Kyle Busch on a tour of its offices and plants. Not in Honshu or Hokkaido, but rather California, Texas and Kentucky.

“They showed us just how American the company is,” said Busch, who last week drove his No. 18 Camry to the Sprint Cup Series championship — the biggest victory for Busch in his 11- year racing career and the biggest Nascar achievement for Toyota Motor Corp., too.

For nine years the Japanese auto company has been delivering that same message to a much tougher audience, and Nascar fans are growing more receptive. Two out of three now say they’d consider buying a Toyota, roughly on par with the sport’s domestic sponsors like Ford Motor Co. and General Motors Co.’s Chevrolet — and double the number who said they would when the carmaker joined the cup series in 2007. From 2011 to 2014, the company also saw its biggest market-share gains in Nascar’s traditional strongholds, according to research firm IHS Automotive.

“Nascar fans may still be more likely to buy a Chevrolet or Ford just based on the domestic, Americana nature of things,” said Peter Laatz, executive vice president of the Americas for research firm Repucom. “So they’ve got work to do in that crowd. But they know that crowd is open to the message they’re putting out, because they are supporting Nascar, Kyle Busch, and their other drivers.”

This was not always the case. In the early 2000s, Toyota was known in racing circles for high spending and poor performance in Formula One, and some Nascar faithful warned that the foreign auto giant would blindly throw money into the sport to purchase drivers, and eventually titles. There was other resistance, too.

“I’ve enjoyed the fact that Nascar has been a place where the red-white-and-blue Americans could show preference over the products produced by their peers,” longtime car owner Jack Roush told ESPN in 2006. “Even though these Japanese companies, Toyota in particular, may have factories in the United States that use American workers, it’s Japanese capital.”

Nascar fans are also terrifically loyal. Seventy percent say they buy from companies that support the sport, 20 percentage points higher than the average sports fan, according to a 2015 study released by Repucom. Edward Laukes, Toyota’s vice president of Marketing Communications and Motorsports, saw the evidence for himself in the parking lot at races. “There wasn’t a Toyota to be found anywhere,” he recalled.

The goal, then, was for Toyota to become one of the brands Nascar fans could be loyal to. Part of that meant delivering the message — as it did during Busch’s 2008 facility tour — about its U.S. presence. The company has 14 plants in the U.S., and says it has created 365,000 American jobs. The Camry that Americans buy was built in Kentucky, the Tundra in Texas.

Toyota entered the league’s truck circuit in 2004. Three years later, looking to promote its dedication to the U.S. market, the company jumped up to the Cup series, Nascar’s premier circuit. This year it supplied cars and engines for six cup-series drivers, including all four on Busch’s Joe Gibbs Racing team.

Busch has become Toyota’s greatest racing asset. In 2008 he won Toyota’s first cup-series race, then drove his Camry to a second-tier Nascar title the following year. Of Toyota’s 79 top-level victories, Busch is responsible for 30, more than any other driver. At home, he drives a Lexus, Toyota’s luxury brand.

However, much all of this has cost Toyota — Laukes declined to say — the success has certainly gotten it in front of Nascar fans. In the 2015 Sprint Cup series, Toyota earned more than $50 million in media value and 30 hours of time-on-screen during races, according to Repucom. That ranks third among all sponsors, behind Sprint ($120 million, 100 hours) and Chevrolet ($60 million, 35 hours), and ahead of Ford ($32 million, 15 hours).

Sales growth has been more modest. Like most carmakers, Toyota has not fully recovered from the recession. It sold 8 percent fewer cars in the U.S. in 2014 than it did in 2007. Toyota’s 1.2 percentage-point market share gains in the Southeast and the Southwest from 2011 to 2014, while greater than the gains seen in other parts of the country, are still small.

Toyota is sticking with it. It pulled out of Formula One in 2009, and company President Akio Toyoda said last year that the carmaker wouldn’t rejoin the circuit as long as he is in charge. Instead Toyota will focus on competitions where engineering more directly benefits product development. Next year, it will start a strategic partnership with Nascar’s Furniture Row Racing, which features driver Martin Truex Jr., and the company’s logo will be omnipresent when the new, $400 million Daytona speedway opens in January.

Whatever the sales number might show, Laukes says he can measure the progress in the parking lots.

“Now you look around and there’s a Tundra, or a Camry, or a Corolla, alongside a Chevy or a Ford,” he said. “We’re a part of the landscape.”

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