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With Jeff Gordon's Paint Job, Nascar Meets A New Brand

Bloomberg Business Week, June 11, 2013

By Keenon Mayo

Of all the stock cars zooming around Nascar ovals for the past two decades, few were as recognizable as Jeff Gordon’s candy-colored Chevrolet (GM), sponsored by DuPont Performance Coatings. It was a splashy partnership: Gordon, a young, California-born driver in a heartland-based sport, piloting a multicolored set of wheels bearing the name of an old-money American dynasty. Only two drivers in the sport’s history have ever accumulated more wins. His team owner, Rick Hendrick, recently said that the DuPont car was “one of the most effective and iconic relationships in sports marketing.”

Well, until this week.The chemicals giant sold its painting and coating division to the private equity firm Carlyle Group for $4.9 billion in February, and the new owner has since rechristened the company as Axalta Coating Systems. Gordon’s car hood followed suit and launched its new look on Sunday at the Party in the Poconos 400 in Pennsylvania.

For non-diehards, it’s difficult to appreciate the emotional attachment Nascar fans have with the sponsors and designs of their favorite drivers’ cars. Given Gordon’s relatively long career and overall success, a swapping of logos midseason is kind of like an aging Yankees squad having their pinstripes tossed out before the All-Star break. For some of Gordon’s fans, it was a somber occasion. “It will be really hard to get used to,” wrote one fan on the driver’s Facebook (FB) page.

The forces that culminated in the makeover of Gordon’s car were driven by considerations larger than Nascar sponsorship. As of last year, DuPont Performance Coatings accounted for only 12 percent of DuPont’s (DD) overall revenue of $31.5 billion. As Mark Gulley, a New York-based analyst at Ticonderoga Securities, told Bloomberg News in December, “The margins are about half the corporate average, so selling it would improve the portfolio.”

Still, the question remains: After years of stability, how will Gordon’s new association with the less-then-household name Axalta affect his own brand? “It’s an interesting situation, and it’s true that nobody likes change,” says Jim Andrews, senior vice president of content strategy at the sponsorship consultancy IEG. “But Nascar fans are loyal. And you usually have two sets of fans—[some] hold dear to the old stuff and the nostalgia, but there will also be a segment of his fan base that wants anything associated with him. Now he has a new uniform and a new look, and it will prompt some merchandise sales.”

The biggest winner in all of this is likely to be Axalta. “Educating folks about a new brand is a difficult thing to do,” Andrews says. “They can use Jeff and the team for explaining who they are. For many companies, they have to spend a massive amount on advertising and TV ads and likely Axalta will still have to do some of that. But having the Gordon sponsorship gives them an automatic platform for getting the name out there. It’s an built-in promotional vehicle.”

Gordon and his new paint job finished 12th in Sunday’s race. While a large swath of his fans wondered about the provenance of the giant “A” logo adorning the car’s hood, they could still take comfort in the fact that the paint scheme, while not identical, is close enough: bright yellows and reds and the tendrils of fire running along the doors. “The tough thing is that when you’re coming in cold as a fan, you wouldn’t know what ‘Axalta’ is—there’s no mention of ‘paint’ or ‘coating,’” says Andrews. “But there is explaining to do now” about the brand, which can only be good for the company.

This year, however, Gordon hasn’t looked like the No. 24 of old. He’s currently ranked 11th in the Sprint Cup standings, with no checkered flags. He’s turning 42 in August, and his long-term future remains in question. “I pretty much look at one year at a time at this stage,” he told reporters. Regardless, Axalta and Hendrick Motorsports agreed on a three-year extension of their partnership. The newly rebranded company said in a statement: “Jeff Gordon is the best spokesman any company could ask for.”