Tuesday, December 22, 2009

Why Petronas Chose Mercedes

Tuesday, December 22, 2009

The wild goose chase is over, as far as the Lotus F1 team are concerned – and the outcome isn’t good. The new Formula One outfit had been searching for a title sponsor to fund a sizeable portion of their new endeavour, and since BMW-Sauber pulled out altogether from Formula One, who better than Petronas to be their sponsor as they are, after all, a Malaysian company that would undoubtedly work hand-in-hand with the Malaysian outfit.

News that Petronas chose Mercedes over not only Lotus, but also a few other teams was greeted with pessimism from the bosses of Lotus. Says an infuriated Alex Yoong, “Words fail me. Mercedes is a good team, no doubt, but what Lotus is doing is completely ground-breaking and brave and Petronas not seeing that fills me with shame.”

Now, assessing this situation, it is a rather baffling fact that a Malaysian oil and gas company snubs their own local Formula One team to sponsor German carmaker Mercedes who bought over the championship winning Brawn GP team. The question that is certainly on every Malaysian’s lips, and probably on that of individuals from the established Formula One fraternity is a simple “Why?”.

Henceforth, Petronas must have a very viable and concrete reason to validate their choice. It isn’t as if they are new to the Formula One world. They have been on the Formula One landscape since the year 1995. They have come a long way to understanding the name of the game, much unlike the Lotus F1 Team who are classified as rookies awaiting for the start their first season. Therefore, you could sum up that Petronas know what they are doing.

Firstly, had Petronas chosen Lotus over Mercedes, the marketability of their product would be centred around Malaysia, and at most probably around the Asia Pacific region. It would have been hard to tap into the European markets as the team will be centred in Sepang.

By sealing a partnership with Mercedes, Petronas have now enabled their brand to be promoted in the European markets. In addition to that, being associated with a household brand like Mercedes further enhances their reputation.

Next, technologically speaking, Petronas would have little to gain had they signed with Lotus. As we know it, Lotus are themselves embracing a sudden leap in technological advancement. This leaves them way below-par as compared to teams such as Ferrari and Mercedes who have been in the trade for a long time. So, Petronas would experience a better advancement in their motor oil industry know-how by virtue of their tie-up with Mercedes.

The biggest, most decisive reason that I feel prompted Petronas to consolidate their deal with Mercedes is the impeding and imminent arrival of the greatest racer ever to grace the sport that is none other than the prolific Michael Schumacher. At 41, many would feel he has lost the touch, itch and durability to race in the ever competitive Formula One grid. But given the right machine, nothing is impossible.

Just imagine – Schumacher clad in Petronas overalls. The end-product will be immensely positive. Petronas will achieve the sort of cult-status that Shell had enjoyed over the years due to their dual-relationship with both Schumacher and Ferrari.

Add that to the fact that Petronas presently sponsor MotoGP championship winning team Fiat Yamaha and multiple time world champion Valentino Rossi and you would realise the sort of impact it would have on Petronas’ sales volume and brand power on a global scale.

The Petronas-Mercedes tie-up should be viewed as a major breakthrough for a Malaysian corporation. Lotus should not lick their wounds over this; they shouldn’t rue it, for it is for the betterment of the nation and that is of paramount importance. For Lotus, there would be other viable alternatives to pick as their title sponsor.


Che Li said...

Congrats to Petronas and good luck fo 1MF1team... nice article you got here...

~Live Life~ said...

Interesting insight here...=)

Lights 2 Flag said...

Hi Himmat - another well written post.

I agree that Petronas were probably swayed in their decision by the star name of Michael Schumacher.

I have a feeling that Lotus will fare better than some of the other new teams that are set to join the F1 grid in 2010 as they have a good technical management set up.


Anonymous said...

great insights! kudos

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