SBJ/June 15 - 21, 1998/This Weeks Issue

Exide credits NASCAR power

Finally, El Nino has met its match.


Despite the mellow temperatures that were expected to cut into the automotive battery market nationwide this winter, Exide Corp. announced a sales increase of $26 million for the quarter ending March 31.

The company cited steady sales of its NASCAR Select line of batteries and accessories as one reason for the surge. The line was launched last year to take advantage of NASCAR's popularity — more specifically, the purchasing habits of its loyal fans.

Soon after announcing earnings for the fourth quarter and fiscal year on June 4, Exide revealed that it had extended its relationship with Roush Racing to sponsor Jeff Burton's No. 99 car through 2001. Exide also extended its title sponsorship of the September race in Richmond through 2000.

The company, which claimed sales of $75 million for its NASCAR Select products in its first year on the market, projected that sales will grow to more than $100 million this year.

"In our business, that's not the cheap seats," said Gordon Lane, vice president of marketing for Exide. "Our connection to NASCAR has been a real success story. We saw an impact on sales at a time when the battery business wasn't at its best."

Exide's financial news was not all good. For the year, net sales were flat, slipping to $2.27 billion from the $2.33 billion generated in 1997. Basic earnings dropped a penny a share to 91 cents.

Earnings per share were up 13 cents for the fourth quarter compared to the same period last year.

The NASCAR Select brand, launched in April 1997, is uncommon among batteries because it carries the name of the manufacturer — Exide — rather than of the sales outlet, such as Kmart, NAPA or Pep Boys. Thus it can be sold as a recognizable brand at various retail outlets, rather than just one.

It's that sort of brand recognition that Exide sought when it began sponsoring a NASCAR Winston Cup team in 1993. The company was going public and wanted to increase brand awareness.

"Nobody out in the public knew what an Exide was," said Paul Mecca, who handles NASCAR sponsorship for Exide. "We needed to let the public know who we were. This program has done that."

When it opted to attach the NASCAR name to its new premium product line last year, Exide furthered the link. Though the company did not use its Winston Cup presence to tap into new sales outlets, going only with existing ties in the brand's first year on the market, Exide believes that carrying the NASCAR mark helps it compete with other batteries on the same shelves.

"That [salesperson] can be very important," Lane said. "You're going to get the support of the trade people because it's got that NASCAR brand. I don't know that they push our battery over the others. But they sell it with conviction."

Exide's brand-recognition efforts within NASCAR reach well beyond its ties to the Select line. Not only does the company sponsor a race, it also has tied its name to a performance-based reward program that has spread its mark around the track.

Each week, Exide awards $2,000 to the driver who moves up the most spots from a race's start to its finish. The "All Charged Up" program also awards points each week, with the driver who accumulates the most collecting a $50,000 check at season's end.

To qualify for the program, a race team must use an Exide battery in its car and display the Exide sticker on its body. Last year, 22 cars entered the program. This year, the number is up to 35.

"It's another aspect of the sponsorship that has worked well," Mecca said. "It's all about finding ways to get the most out of your program. We're extremely happy with everything that's going on with it right now."

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