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Tough contest cutting sports sponsorship

Updated: Aug 5, 2024 By Cao Yingying China Daily Print
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The BYD Yuan Plus Champion Edition is designated as the Chinese skateboarding team's official vehicle. [PHOTO/CHINA DAILY]

Automakers, traditionally enthusiastic participants of Olympic-related promotions, have adopted a more reserved approach at the ongoing Paris event. This change is due to heightened market competition, leading automakers to reallocate resources, industry experts said.

Only a limited number of automakers, such as Chery and BYD, have maintained promotional activities during the Paris Olympics.

In April, Chery signed a partnership with the Chinese women's volleyball team, making the Fulwin and Tiggo models the team's official vehicles. Chery said this collaboration, aiming to bolster the image of its cars, aligns the brand with the resilient spirit of the national team.

BYD's sub-brand Fang Cheng Bao reached an agreement with the Chinese weightlifting team to provide support for the preparation of the Paris Olympics.

BYD has also been a partner of the Chinese skateboarding team since November with its Yuan Plus Champion Edition designated as the team's official vehicle.

The two sides said the cooperation aims to promote the development of skateboarding in China, enhance the team's international competitiveness and further expand BYD's influence and market share.

In a similar move, FAW Hongqi announced that each time the national flag is hoisted during the Paris Olympics, a Hongqi EH7 Glory Edition sedan will be awarded to the victor.

This year's limited participation is in stark contrast with previous events, such as the 2020 Tokyo Olympics and the 2022 Beijing Winter Olympics, where automakers launched extensive marketing campaigns. These included new vehicle sales policies, aftermarket service benefits and custom product offerings.

Wang Peng, a researcher at the Beijing Academy of Social Sciences, said automakers align their marketing strategies with the brand's identity and long-term goals when engaging with global events like the Olympics. The current publicity suggests a more cautious allocation of resources.

Wang added that as market and consumer behaviors evolve, traditional sports event-marketing may lose its appeal among target consumers.

Other experts believe that heightened market competition is a factor behind the subdued involvement of major automakers in this year's Olympic Games.

The highly competitive auto market has resulted in many mainstream brands facing challenges, such as factory closures and layoffs. Only about 20 percent of domestic dealers met their sales targets in the first half of this year, according to data from the China Automobile Dealers Association.

Given this environment, automakers are focusing their resources on core business operations and competitive strategies, rather than marketing, said industry analysts.

Nevertheless, the analysts claim that sponsoring major international events like the Olympics can enhance the recognition and influence of Chinese vehicle brands globally.

Zhang Yi, chief analyst at iiMedia Research, said that sponsorships and marketing initiatives tied to major sports events can boost brand awareness and pave the way for exploring international markets.

"Sports events create cultural resonance and emotional connections, leading to successful consumer engagement and brand image enhancement. South Korean and Japanese automakers have extensively leveraged sports marketing in their global expansion strategies," Zhang added.

BYD was an official partner of the European Football Championship that concluded in mid-July. Advertisements on the sidelines proclaiming BYD the World Champion of New Energy Vehicles were eye-catching. This was the first time in the tournament's history that the organizer has partnered with an NEV brand or a Chinese automaker.

BYD's NEVs are sold in 88 countries and regions worldwide, spanning more than 400 cities. In the first half of this year, its overseas passenger NEV sales totaled 203,400 units, jumping 173.8 percent year-on-year.

Chinese electric vehicle battery giant CATL signed an agreement with China Mobile's Migu to become its premier partner for broadcasting top European football matches and other top domestic and international sports events, including the Olympics in 2024.

Seven former world champions, including Lang Ping, Xu Xin and Fu Yuanhui, have been featured in a promotional video, highlighting CATL's innovative spirit and pursuit of breakthroughs.

CATL has been the world's largest EV battery provider for seven consecutive years. In the first five months of this year, its global market share reached 37.5 percent, according to South Korean market consultancy SNE Research.

Zhang said that continual innovation in technology and product development, coupled with the establishment of international service networks, particularly in aftersales service, is crucial. These multifaceted marketing and product strategies are expected to pave the way for Chinese auto brands' global expansion.

China surpassed Japan to become the world's largest vehicle exporter in 2023. According to data from the China Association of Automobile Manufacturers, in the first half of this year, automobile exports reached 2.79 million units, up 30.5 percent year-on-year.

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