Friday, September 25, 2009

Renault: Counting the brand cost

More bad news for team Renault ahead of this weekend’s Singapore F1 night race as two of its biggest sponsors quit because of the much publicised FIA ruling.

In case you’ve been living under a rock for the last few weeks, Renault have been handed a suspended disqualification from F1 after team principal Flavio Briatore, executive director of engineering Pat Symonds and driver Nelson Piquet Jnr were found guilty of a plot to deliberately crash in last year's Singapore Grand Prix.

Renault’s principal sponsor, ING has cut short its sponsorship (which ends after the 2009 season wraps) to immediate effect. And left no room for speculation as to the reason why it has ended the association with Renault four races early.

An ING statement read:
“In light of the verdict of the World Motor Sport Council of 21 September 2009 concerning the events that occurred at the 2008 Singapore Grand Prix, ING will terminate the contract with Renault Formula 1 with immediate effect.”

“ING is deeply disappointed at this turn of events, especially in the context of an otherwise successful sponsorship.”

On top of this bad news, Spanish insurance firm Mutua Madrilena also announced it would end its backing calling the incident “something that can affect the image, reputation and good name of the team's sponsors.”

And added that: “The behaviour of the relevant people in the team was extraordinarily serious and compromised not only the integrity of the sport, but also the lives of spectators, drivers and circuit personnel.”

Strong but justified words from the sponsors given that the incident has been declared as the worst single piece of cheating in the history of sport by Simon Barnes of The Times (Have a read of his article he makes a solid argument for his case).

But aside from the financial cost the incident will have on Renault, the car maker stands to take a hit in another crucially important area – brand value.

Seven years ago when Renault made the investment into the incredibly expensive sport of F1, one of the goals would undoubtedly have been to grow brand value and be associated with success.

And since then it would be fair to say they have done just that through Fernando Alonso’s driving and winning.

It’s a whole different ball game now.

F1, as expensive as it is, is also a very high profile sport and the “crashgate” incident only lives to associate Renault with arrogance, cheating, and even worse still, a nonchalant view of humanity.

And it’s also a violation of the brand’s CSR policy which, like many companies, advocates transparency.

Who wants to be seen in a Renault car after this?

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