Daniel Ricciardo has revealed how he stayed up late on the eve of the Italian Grand Prix to watch British teenager Emma Raducanu’s US Open triumph – and how her success proved inspirational before his comeback triumph.
In quiet moments late at night, Supercars CEO Sean Seamer must surely ask himself the question: “What else can happen?”
In the greater scheme of things, the February 17 announcement of the closure of Holden by the end of the year can’t have come as a great surprise to many in the local automotive retail and motorsport space. The writing had been on the wall for quite a while, the rumblings in the Australian automotive and motorsport media had been growing louder and some fairly rudimentary research on the global trajectory of Holden parent GM all pointed to one outcome, which I had last month called out as inevitable in two Roar articles, here and here.
I have to admit (it’s in print – I can’t deny it!) that I expected the timing of the closure to coincide with the end of 2021 rather than the end of 2020, but with significant external-to-Australia pressures building on the financial, product development and supply chain side of the equation it’s easy to see why the decision has been taken sooner rather than later.
In the immediate short term, the closure shouldn’t have any meaningful impact on the conduct of Supercars competition. As I have written previously, for the most part the 2020 competition is already locked away – the competition calendar has been published, teams have sponsors, drivers and suppliers contracted and committed and, as I write this, teams have converged on the Bend Motorsport Park in SA for pre-season testing ahead of this weekend’s Superloop Adelaide 500 – the traditional opening event of the Supercars calendar, conducted on the streets of Adelaide.
On January 30, I wrote this about the primary challenge for Supercars in 2020: “The big challenges that Supercars face this year are all about the financial model for 2021, 2022 and beyond. What will the revenue streams look like? How will the cost base be managed? Who will be the manufacturers that have cars on the grid?”
Right now the situation can best be described as fluid, with the future unclear on GM’s ongoing automotive marketplace and motorsport presence in Australia. So it’s time for some crystal-balling on the future of GM in Australia and what that means to Supercars.
First up, GM in Australia. What we do know is that Holden is leaving by the end of 2020, and that outside of Holden, GM already have an existing presence in the Australian market through a formal partnership between GM and HSV (i.e. Walkinshaw), who import the Silverado and Camaro range in LHD form, convert them locally and market them through the HSV sub-set of the existing Holden dealer network.
Swirling around in the eddies of information and speculation, one nugget keeps bobbing to the surface: the concept of GM retaining a presence in the Australian market via a GM Special Vehicles entity, with existing partners doing the RHD conversion locally and distributing through a small specialised dealer network.
Based on what is already in place, this makes sense. The majority of Holden/HSV dealers are multi-franchise outlets and many of them have reduced their floor space commitment to Holden in favour of their other franchises as Holden has slipped down the sales totem pole over the last few years. Many will choose to close out their Holden commitment.
For GM and the HSV sub-set there would appear to be a mutually beneficial opportunity for them to continue their relationship.
GM gets some ongoing incremental sales that are all profitable. They retain a physical presence that can support the warranty, parts and service commitments they have to the Holden owner base, all while being able to leverage the latent (although small) Australian market enthusiasm for GM brands (including Corvette, soon to be available in Australia for the first time in ex-factory RHD form), which may or may not include a presence in top-tier Australian motorsport.
The dealers retain a small-but-profitable new vehicle niche market where the unique selling point is the product, not the price, along with an ongoing pipeline of parts and service business that helps keep their workshops busy and brings with it the chance to make good margin on accessories and merchandise, as well as being a great platform (lots of hero and niche product) for dealer-level promotion and community engagement activities.
In summary, work out which of the existing HSV dealers is in or out, rebrand them as GMSV or whatever nomenclature the marketing gurus decide will resonate with the target audience and move forward. Additional vehicles from the GM portfolio can be added down the track, and there might need to be some incentive given to certain dealers to stay or go depending on the geographic coverage the network needs to meet the statutory warranty, parts and service commitment, but it’s all entirely do-able.
Now to the not so easy bit, Supercars. I have written before on the choices and challenges that Supercars are facing in 2020, which is quite simply summarised as how do Supercars come out of 2020 with a viable commercial and sporting model?
The closure of Holden has merely served to crystallise that challenge into something that has a defined timeline and now must be treated with a sense of urgency. The challenge is amplified by the concurrent need to negotiate a new media rights deal for 2021 and beyond, as well as the possibility of having to renegotiate the naming rights deal currently in place with Virgin Australia. Conducting negotiations of this nature isn’t made easier when the product you are bringing to the negotiating table has some fairly major known unknowns in it.
Is there a quick fix for the short term? The response from some pundits to reading the above piece about the future of GM in Australia will be to frame the impending Gen 3 regulations to allow the Camaro to compete – problem solved!
At face value this is the easiest and most straightforward solution. The Camaro is already here, it is being converted to RHD in Australia by an organisation that has a team in Supercars (WAU – the ex-official Holden Racing Team) and has previous experience with homologating models for Supercars competition. WAU have previously stated a desire to bring the Camaro to Supercars competition and have gone so far as doing preliminary design work, calling a halt to the process when it became apparent that the current Gen 2 chassis wouldn’t allow the Camaro body to be utilised without unacceptable compromises to the visual integrity of the parent car.
This looks like the easiest of the available options, and while it would deliver two current-model cars to the 2021 grid in a variation of the historical underlying Supercars theme of Ford versus Holden – now Ford versus GM or Chev – that would resonate with a core of Supercars fans, it’s a model that has some questions around its long-term commercial viability.
Ford is Ford. It’s a global brand with a long history in Australia and a wide portfolio of vehicles available in the Australian marketplace. The Mustang sits at the top of the Ford pile as the hero sports car that has serious street cred but is still quite attainable and, from a brand positioning and marketing perspective can be related back to the wider Ford portfolio. Having the Mustang on the grid makes some sense from a broader marketing perspective.
The Camaro, not so much. It certainly ticks the boxes of being a hero car with serious street cred, but is significantly more expensive and less attainable than the Mustang. Regardless of focusing on its branding as a Camaro, a Chev or a GM product, the ability to reference it to other products in the Australian marketplace is limited compared to the Ford equation, even if by no other factor than the current volumes of non-Holden GM product in the Australian marketplace are small, niche-market volumes and will always likely be that way.
Having said that, if the commercials can work for the homologation process and the teams, then getting the Camaro on the grid ASAP might just be the immediate short-term answer to the immediate short-term challenge.
It’s worth noting that while there was a lot of fanfare early last year about Holden’s expanded commitment to all the Holden teams competing in Supercars (primarily a parts support arrangement), the reality is that the majority of them were operating as commercial entities independent of any direct factory support. Entrenching this as policy could be part of the way forward for the Supercars commercial model, ensuring a degree of independence for the category and the teams.
The longer term challenge is really where Supercars appears challenged, and they seem to be somewhat bereft of direction.
Over 12 months ago, Supercars released a statement as to the work they had done and were doing on the development of the regulations and commercial business model beyond Gen 2.
On February 4 this year, they released another statement that included such gems as “likely shift towards a two-door sportscar platform”, “Supercars “haven’t arrived” at a final look for the cars”, but “a GT-inspired rule set “is a possibility”’ with a “focus on ‘fast, loud and good looking’ cars”, all while “maintaining and ensuring that we’ve got market relevance” in a manufacturer context.
So, they haven’t made any decisions, “GT-inspired” is a possibility and whatever they come up with will be “fast, loud and good looking”.
That doesn’t sound like a lot of progress in 12 months. And they don’t have the luxury of another 12 months.
One of the big questions and challenges has to be around that market relevance piece. Relevant to what market? When Supercars as we know it kicked off in 1993 it was market relevant. The cars on the track reflected the Australian automotive market at the time. Holden and Ford dominated, large sedans and their wagon and ute derivatives dominated the market and the cars on the track had quite a bit of commonality with their road-going brethren.
The market today is entirely different. The variety of vehicles available has grown exponentially in both brand availability and form-factor, resulting in a much more splintered market, and the one single category that can lay claim to being dominant is dual-cab utes, closely followed by SUVs. There aren’t a lot of options to go racing with market relevance there – as two underwhelming years of SuperUtes competition has just demonstrated.
If Supercars seeks to go in the sports cars direction (as stated) they very soon find themselves bumping up against the existing GT3 category (and lower-level GT4) that operates in Australia at a domestic level and locally as a part of wider international competitions, the highest profile example being the recent Bathurst 12 Hour.
This can rapidly become a very crowded market space if Supercars seeks to go in this direction. GT3 doesn’t have a huge profile in Australia, but creating a bespoke, Australian-specific category that seeks to attract models that are already able to compete in an internationally recognised category within Australia will invariably lead to a turf war of some kind.
GT3 has over 20 different models from 15-plus manufacturers already approved for competition. They are market relevant in that they are direct derivatives of road cars, many of which are available and will continue to be available in the Australian marketplace long after the ripples Holden’s departure have dissipated.
From a competitors perspective it’s easier to get a car onto a GT3 grid than a Supercars grid and, more importantly from a spectators perspective the GT3, being a direct derivative of the parent road car addresses one of the criticisms frequently levelled at Supercars, that being that there isn’t or wasn’t any relationship between the road car and the Supercar.
The only place that front-engined, rear-wheel-driven, V8-powered ZB Commodores, Nissan Altimas or Volvo S40s ever existed was on a Supercars grid as an outcome of regulations that were launched to attract new manufacturers to the series. That didn’t work. Holden’s departure aside, Volvo, Nissan and Mercedes (in an unofficial capacity) have all come and gone – but they are still active participants in the Australian automotive marketplace. Unlike Holden.
Supercars stated desire to define a “market relevant, GT-inspired” space in the Australian motorsport landscape (that isn’t so close to GT3 and GT4 that makes no difference) would seem to be a big ask. The Mustang versus Camaro model noted above is entirely do-able and probably viable for the short term, but the ongoing and thus far unsuccessful quest to expand the participant base needs to bear fruit if the category is to survive and prosper in the long term.
There are plenty of sports cars on the Australian market, many from manufacturers with a storied history in motorsport (e.g. Audi, BMW, Nissan, Toyota), but to expect them to come and play by Supercars’ rules in order to participate in a unique category in a tiny market place with limited opportunity for growth is probably somewhat delusional. Particularly when they can take an already homologated version of one of their existing products off the shelf and enter in Australian GT3 or TCR competition with a minimum of drama.
The bottom line here is that the incredibly bespoke, unique-to-Australia Supercars rule book needs to be questioned as to its market relevance. As of today, it hasn’t delivered what it set out to do when it was introduced for 2013 (Gen1/Car of the Future), and some hard questions need to be asked as to the appropriateness of continuing that model or trying something different.
Becoming the official Australian arm of an existing global category needs to be considered as an option. It has some advantages, particularly the elimination of two key pieces that Supercars hasn’t historically been that good at: the framing of technical regulations and the management of the homologation process for new entrants into the category. Perhaps that category is GT3/4. Perhaps it’s TCR or NGTC (BTCC). Perhaps it’s NASCAR (could include the trucks!) or Super GT or DTM.
Whatever the answer is, another wash, rinse, repeat cycle won’t deliver in the long term, and blind adherence to iterating a model that has served well in the past – an increasingly distant past – won’t ensure future success in the changed and rapidly changing Australian automotive, motorsport and sports marketing landscape.