October 11, 2016
Volume 7 Issue 4
Petronas Defends Racing Sponsorship
Fuel and lubricant marketers spend millions of dollars sponsoring competitive racing teams. Observers sometimes question whether the benefits are worth the time and money invested in such deals, but the number of companies engaged in them implies that they believe the return is good.
Petronas was explicit recently in stating that its sponsorship of Mercedes’ Formula 1 racing team has been a wise investment. Officials at the Malaysian oil major said the company has received more than U.S. $900 million in media exposure since it began sponsoring Formula 1 in 1995.
“Petronas’ efforts in Formula 1 has … significantly strengthened its brand and helped catapult business growth,” a spokesman told Lube Report Asia last week. Last month Petronas CEO Datuk Wan Zulkiflee Wan Ariffin told Malaysian news organizations that the sponsorship enhanced the company’s reputation.
The company declined to quantify the amount of time and money is has spent on its sponsorships. Formula 1 is the world’s preeminent auto racing circuit. Since 2010 Petronas has sponsored Mercedes AMG Petronas, a German team with two cars on the Formula 1 circuit. In addition to the cash that it pays, Petronas works with the team to develop fuels and lubricants for their vehicles. The Petronas spokesman said the oil company has developed 200 fuels that have been tested and evaluated by the Mercedes team, 20 of which have been used on tracks. Petronas has also developed more than 50 engine oils, transmission fluids and hydraulic fluids for the partnership.
Petronas said it benefits from the technical experience it gains working with the racing teams and that the cooperation has opened doors for lubricant sales. It currently supplies Syntium brand engine oils as factory fill for all 4- and 8-cylinder Mercedes AMG cars.
But media exposure, Petronas contends, is the biggest benefit from its sponsorship. The company is the world’s 10th-largest lubricant supplier and believes that the visibility it receives – from its logo on Mercedes AMG Petronas race cars, from its name being part of the team’s name – have boosted the recognition and reputation of its lubricant brands. It noted that Petronas was one of just four brands from Southeast Asia to make Brand Finance’s list of the top 500 global brands for all products.
Cover: Lewis Hamilton at the 2016 Monaco Grand Prix. Photo: Andrew Locking/Flickr