Hendrick Automotive says Larson sponsorship has paid off
SINCE THE auto dealership empire run by Hendrick Motorsports founder Rick Hendrick stepped in to be the primary sponsor of Kyle Larson in 2021, following the driver’s off-track troubles, Hendrick’s race team has built its own case study of how to make such relationships in NASCAR pay off.
Hendrick Automotive Group said the deal to be the primary sponsor of Larson’s No. 5 Chevrolet for most races has pushed potential customers into the car buying pipeline, directing them to the company’s e-commerce HendrickCars.com website and network of 94 dealerships, and helped recruit employees.
The company says it continues to sponsor Larson because of the return on investment but is open to reducing its presence as Larson has again attracted interest from other brands.
“I have these conversations with [Rick Hendrick] in terms of results and I owe him an ROI summary just like any other summary with a CEO or owner,” said Brian Johnson, vice president of marketing for Hendrick Automotive. “He’s very engaged, but I would also be remiss if I didn’t say that he has never once told us to sponsor the No. 5 car. We want to sponsor the No. 5 car, our COO who runs our automotive group believes in this program, our operations VP believes in it, and we see the results coming in.”
Larson faced off-track troubles over a racial slur that left him without a sponsor in 2020. He was released from Chip Ganassi Racing and stepped away from racing the rest of the year to repair his reputation. He joined Hendrick Motorsports in 2021, racing to the NASCAR Cup Series championship that season, and remains one of the most popular race car drivers in America. He is represented by Prosport Management.
In racing, cynicism can follow when a team owner uses one of his other companies to sponsor a car, with the perception being that this is often a last resort. The move is not unusual, however. For example, Haas Automotive frequently appears on cars owned by Stewart-Haas Racing co-owner Gene Haas, and even Michael Jordan’s team has been running paint schemes around Jordan Brand sneakers.
HendrickCars.com uses the national footprint provided by NASCAR to highlight its improved e-commerce offerings. Industry experts say there’s reason to believe that Hendrick Automotive is seeing a proper lift. That’s why company executives say they intend to keep the deal “as long as we possibly can.”
“HendrickCars.com is national — a guy can shop on that website from anywhere, and that’s the primary reason why I believe the deal works, because an e-commerce retailer can truly sell the car on a national level,” said Jeremy Lange, a former NASCAR team president who now is a consultant in the sport. “If you’re going to choose between Carvana or HendrickCars.com, and you have [Rick Hendrick] and Jeff Gordon and all these different legacies, there’s a reputation and a prestige to buying a car from Hendrick. It’s like buying a car from Roger Penske.”
HendrickCars.com has been Larson’s primary sponsor for all but a couple of events, such as Valvoline taking three primaries annually out of 38 races. Valvoline is among the sponsors at Hendrick Motorsports that also does business with Hendrick’s dealerships. Hendrick Automotive handles its sponsorship activation in-house.
While the ultimate goal is to sell and service more cars, one of the foremost performance indicators is driving traffic to HendrickCars.com to get consumers started down the traditional sales funnel. Hendrick Automotive’s business is massive — the company said it posted $12 billion in revenue in 2022 through selling nearly 200,000 vehicles and servicing about 2.3 million more.
Johnson said HendrickCars.com’s largest traffic day of the year in 2022 was the day of the Daytona 500, while the largest day this year was the day the company unveiled its throwback paint scheme for a race at Darlington Raceway in May. The company also saw a spike after the recent announcement that Larson will compete in next year’s Indianapolis 500 in IndyCar and Coca-Cola 600 in NASCAR on the same day, a rare feat in racing known as “The Double.”
Johnson added: “We tend to see these big traffic spikes when we do something cool, and when I say spikes I mean two to three times of our normal website traffic, which is tremendous for us, and we definitely see it when he does really well [on the track].”
HendrickCars.com has filmed commercials with Larson and his crew chief Cliff Daniels. Larson wears white “home game” firesuits for races near a Hendrick dealership and blue “away game” firesuits for other races. This year the company has made special merchandise available for fans at “home races” and held giveaways on the website.
At Indy, Larson will compete for McLaren Racing, which is part of the McLaren Automotive company. A globally renowned carmaker allowing Larson to drive one of its cars is a testament to how he has been able to redeem his reputation and regain the interest of companies outside of Hendrick. Earlier this year, restaurant chain Jinya Ramen Bar became an associate-level sponsor, the first to join Larson at Hendrick Motorsports with no prior affiliations with him or the team.
Johnson said Hendrick Automotive would be open to reducing its presence on the No. 5 car if the right new sponsors wanted to buy primary positions.
“It’s something we want to do and intend to keep it as long as we possibly can — it’s a great platform for us,” Johnson said. “Like any organization would if there was a really key partnership that could benefit both sides, we’re always going to look at it whether that’s an associate or primary partner — we would do that not only for Kyle but any team. … If it makes sense, we certainly would look at it.”