88 replies to this topic

[jjcale]

So.is wolf going to use seb as a bargaining chip in lewis contract talks?

 

Once they decided to change the colour scheme and go all BLM, they have no more leverage over LH - he can demand $100m from them now if he wants .... they might as well change the name of the team to AMG Mercedes-Petronas-Hamilton .... at this point he could demand a seat on the board of Merc AG and they would have to give it to him. .... how can Merc explain not resigning LH if he cant agree terms - imagine the PR disaster that would be ... the dude now gets to write not only his own paycheck but also his own contract. ... their internal analyses must be showing that he is selling a hell of a lot of cars for them to justify getting themselves completely over a barrel like this.    

[milestone 11]

Once they decided to change the colour scheme and go all BLM, they have no more leverage over LH - he can demand $100m from them now if he wants .... they might as well change the name of the team to AMG Mercedes-Petronas-Hamilton .... at this point he could demand a seat on the board of Merc AG and they would have to give it to him. .... how can Merc explain not resigning LH if he cant agree terms - imagine the PR disaster that would be ... the dude now gets to write not only his own paycheck but also his own contract. ... their internal analyses must be showing that he is selling a hell of a lot of cars for them to justify getting themselves completely over a barrel like this.

In the interview that Martin did with Lewis and Toto, shown often recently, Toto says that in 2012 the advertising revenue value on the car was €80m, it's now €4.5bn.

[Risil]

In the interview that Martin did with Lewis and Toto, shown often recently, Toto says that in 2012 the advertising revenue value on the car was €80m, it's now €4.5bn.

 

That's an extraordinary figure. I'd like to know more about how they calculate that and how it compares to other teams.

[SonGoku]

Once they decided to change the colour scheme and go all BLM, they have no more leverage over LH - he can demand $100m from them now if he wants .... they might as well change the name of the team to AMG Mercedes-Petronas-Hamilton .... at this point he could demand a seat on the board of Merc AG and they would have to give it to him. .... how can Merc explain not resigning LH if he cant agree terms - imagine the PR disaster that would be ... the dude now gets to write not only his own paycheck but also his own contract. ... their internal analyses must be showing that he is selling a hell of a lot of cars for them to justify getting themselves completely over a barrel like this.    

 

Hamilton has made the brand cool and that value is cleary worth it for them.

[milestone 11]

That's an extraordinary figure. I'd like to know more about how they calculate that and how it compares to other teams.

It is an extraordinary figure. He doesn't elaborate. It's a great interview in two parts, well worth a watch.

[Risil]

Once they decided to change the colour scheme and go all BLM, they have no more leverage over LH - he can demand $100m from them now if he wants .... they might as well change the name of the team to AMG Mercedes-Petronas-Hamilton .... at this point he could demand a seat on the board of Merc AG and they would have to give it to him. .... how can Merc explain not resigning LH if he cant agree terms - imagine the PR disaster that would be ... the dude now gets to write not only his own paycheck but also his own contract. ... their internal analyses must be showing that he is selling a hell of a lot of cars for them to justify getting themselves completely over a barrel like this.

 

Rename all Mercedes road cars Lewis-Benz. Make Roscoe non-executive chairman of Daimler. Eliminate Croydon. Name your demands, Lewis!

[shure]

Once they decided to change the colour scheme and go all BLM, they have no more leverage over LH - he can demand $100m from them now if he wants .... they might as well change the name of the team to AMG Mercedes-Petronas-Hamilton .... at this point he could demand a seat on the board of Merc AG and they would have to give it to him. .... how can Merc explain not resigning LH if he cant agree terms - imagine the PR disaster that would be ... the dude now gets to write not only his own paycheck but also his own contract. ... their internal analyses must be showing that he is selling a hell of a lot of cars for them to justify getting themselves completely over a barrel like this.    

I'm highly sceptical that they can accurately pinpoint car sales down to Hamilton being a member of the team.

 

As to the rest, of course it would. be a blow for them if he left.  But: a) where would he go?  Alonso couldn't get a seat in a top team when he was looking.  Neither can Seb.  Similar rules would apply to Hamilton I think.  Which would effectively mean Hamilton retiring anyway; b) I think you overestimate the importance of F1 - they clearly think it's a benefit but like everything there's a cost curve and if Hamilton's demands are too high then they still have the best car by far so would probably reason that even if another driver has only 80% of Hamilton's skill they'd still be winning anyway; and c) they could easily explain not hiring him if his demands became absurd

[SophieB]

In the interview that Martin did with Lewis and Toto, shown often recently, Toto says that in 2012 the advertising revenue value on the car was €80m, it's now €4.5bn.

Because I am an idiot, what does this exactly even mean in the context of a constructor that mostly just has their own name on the car?

[SophieB]

I'm highly sceptical that they can accurately pinpoint car sales down to Hamilton being a member of the team.

 

As to the rest, of course it would. be a blow for them if he left.  But: a) where would he go?  Alonso couldn't get a seat in a top team when he was looking.  Neither can Seb.  Similar rules would apply to Hamilton I think.  Which would effectively mean Hamilton retiring anyway; b) I think you overestimate the importance of F1 - they clearly think it's a benefit but like everything there's a cost curve and if Hamilton's demands are too high then they still have the best car by far so would probably reason that even if another driver has only 80% of Hamilton's skill they'd still be winning anyway; and c) they could easily explain not hiring him if his demands became absurd

Mercedes, don’t listen - my A Class AMG is 100% on Lewis Hamilton.

[shure]

Mercedes, don’t listen - my A Class AMG is 100% on Lewis Hamilton.

yeah but you're a die-hard F1 (and Hamilton) fan, to be fair.  I'd suggest you're not the typical car buyer.  I mean, my last car purchase was a BMW and they're not even in F1.  I'm just very sceptical about how many people actually make their buying choices based on an F1 driver.

[milestone 11]

Because I am an idiot, what does this exactly even mean in the context of a constructor that mostly just has their own name on the car?

I can only assume it is what they perceive the potential value of the advertising space on the car to be worth. As I say, he didn't elaboroate, unfortunately.

[beachdrifter]

I mean, my last car purchase was a BMW and they're not even in F1. 

 

Yeah, but they were. And Schumacher drove for them. 

 

It's the only reason anyone buys a BMW.

 

[gillesfan76]

Mercedes, don’t listen - my A Class AMG is 100% on Lewis Hamilton.

 

 So is my wife’s AMG C63. Not that she’s a F1 or Lewis fan, but I am. Though I myself am a traitor and have a BMW M3, at least while I still think I can drive. The Merc’s interior is just out of this world.

[CountDooku]

Mercedes, don’t listen - my A Class AMG is 100% on Lewis Hamilton.

Please tell me you have the A45 S in Sun Yellow? 😍💛

[shure]

I can only assume it is what they perceive the potential value of the advertising space on the car to be worth. As I say, he didn't elaboroate, unfortunately.

it can't be that though, surely?  That would mean a sponsor would have to pay more than 100 million just to put their logo on the wing mirror. Which almost nobody ever sees...

[SophieB]

Please tell me you have the A45 S in Sun Yellow? 😍💛

Nah, it’s an A180 AMG in one of the variants of silver Mercedes push out, I forget the name.

[Risil]

Fwiw my Vauxhall Astra is on John Cleland but that ship left port long ago.

[milestone 11]

it can't be that though, surely?  That would mean a sponsor would have to pay more than 100 million just to put their logo on the wing mirror. Which almost nobody ever sees...

I'm only reporting what Toto said. You'll have to take up any elaboration directly with him.

[gillesfan76]

yeah but you're a die-hard F1 (and Hamilton) fan, to be fair.  I'd suggest you're not the typical car buyer.  I mean, my last car purchase was a BMW and they're not even in F1.  I'm just very sceptical about how many people actually make their buying choices based on an F1 driver.

 

It doesn’t have to be someone going out and buying a car just because they’re a fan of Lewis and he drives a Merc. It’s got to do with the exposure he brings, the championships, the performance, the headlines. You could say that in many cases, the car is so good that even without him they’d be on pole. Certainly that was the case last Saturday and many other weekends, but not today. It would have been a Red Bull pole.

 

Mercedes was seen as such an “old person who has made it” car. It wasn’t a car that the young exec aspired to. That was BMW or Audi. Mercedes has changed all that, no doubt by the car models themselves being a lot more hip and cool, but the backbone has been the brand presence and performance in F1 and the exposure that they got with Lewis not to mention his fights with Nico.

 

As amazing a driver that he is, he doesn’t just command that salary on performance alone. Especially not when the car was so dominant. It’s the exposure he brings, the sponsors and advertising. It’s hardly about those few people going out and dropping $70-100K on a car because their favourite driver drives one. Though no doubt it could swing the vote for some. I know when we bought my wife’s AMG, the first choice was actually Audi and second BMW. Previously I had always held a ‘old man’s car’ view of Mercs, but because the AMGs looked pretty cool, nice engine and well, exposure from F1 and helped by Lewis being my favourite driver, we took one for the weekend and fell in love with the interior quality and the syrupy engine.

[shure]

I'm only reporting what Toto said. You'll have to take up any elaboration directly with him.

I get that, obviously.  Just putting the question out there as for some reason Toto's not taking calls at the moment

[jjcale]

In the interview that Martin did with Lewis and Toto, shown often recently, Toto says that in 2012 the advertising revenue value on the car was €80m, it's now €4.5bn.

 

That sounds like a different calculation method rather than a straightforward increase in value ... but anyway ... they must really "love" this guy to change the colour scheme and go all in with a BLM type project ... and we know there is only one reason why any corporation "loves" anyone. 

 

So, yeah, what you said is worth bearing in mind.  

[smitten]

Because I am an idiot, what does this exactly even mean in the context of a constructor that mostly just has their own name on the car?

 

I read it as they would have had to spend 80m on advertising to get the F1 exposure they were getting, now they'd have to spend 4.5bn.  It must be an internal measurement of the value of F1 to the brand.

[jjcale]

Once they decided to change the colour scheme and go all BLM, they have no more leverage over LH - he can demand $100m from them now if he wants .... they might as well change the name of the team to AMG Mercedes-Petronas-Hamilton .... at this point he could demand a seat on the board of Merc AG and they would have to give it to him. .... how can Merc explain not resigning LH if he cant agree terms - imagine the PR disaster that would be ... the dude now gets to write not only his own paycheck but also his own contract. ... their internal analyses must be showing that he is selling a hell of a lot of cars for them to justify getting themselves completely over a barrel like this.    

 

 

Hamilton has made the brand cool and that value is cleary worth it for them.

 

Why use a whole paragraph, when a simple sentence will do....

[shure]

It doesn’t have to be someone going out and buying a car just because they’re a fan of Lewis and he drives a Merc. It’s got to do with the exposure he brings, the championships, the performance, the headlines. You could say that in many cases, the car is so good that even without him they’d be on pole. Certainly that was the case last Saturday and many other weekends, but not today. It would have been a Red Bull pole.

 

Mercedes was seen as such an “old person who has made it” car. It wasn’t a car that the young exec aspired to. That was BMW or Audi. Mercedes has changed all that, no doubt by the car models themselves being a lot more hip and cool, but the backbone has been the brand presence and performance in F1 and the exposure that they got with Lewis not to mention his fights with Nico.

 

As amazing a driver that he is, he doesn’t just command that salary on performance alone. Especially not when the car was so dominant. It’s the exposure he brings, the sponsors and advertising. It’s hardly about those few people going out and dropping $70-100K on a car because their favourite driver drives one. Though no doubt it could swing the vote for some. I know when we bought my wife’s AMG, the first choice was actually Audi and second BMW. Previously I had always held a ‘old man’s car’ view of Mercs, but because the AMGs looked pretty cool, nice engine and well, exposure from F1 and helped by Lewis being my favourite driver, we took one for the weekend and fell in love with the interior quality and the syrupy engine.

Tbh I still think of a Mercedes as an "old person who has made it" car (with some exceptions: the A Class for example).  Or a taxi.  And I think that's not uncommon.  I would question just how much that perception has changed because of F1 and I think most savvy car drivers know that there's only a tenuous link between the car they drive and the one that roars around a track every other Sunday.  I'm not saying that nobody will buy because of Hamilton, but I strongly question whether those sales figures are influenced in any way significant numbers.  

 

I guess I'm saying that I contest the idea that Mercedes' brand has been significantly affected by Hamilton in a way that it wouldn't have been with any other driver.  They'd still be winning, let's face it.  Possibly not on pole this weekend, who knows, but overall they'd still be getting exposure.  A that's no reflection on the driver but I feel that people on forums like this, the die hard fans, place far more importance on it than most, and people on forums like this aren't in large enough numbers to make a huge commercial impact

[jjcale]

I'm highly sceptical that they can accurately pinpoint car sales down to Hamilton being a member of the team.

 

As to the rest, of course it would. be a blow for them if he left.  But: a) where would he go?  Alonso couldn't get a seat in a top team when he was looking.  Neither can Seb.  Similar rules would apply to Hamilton I think.  Which would effectively mean Hamilton retiring anyway; b) I think you overestimate the importance of F1 - they clearly think it's a benefit but like everything there's a cost curve and if Hamilton's demands are too high then they still have the best car by far so would probably reason that even if another driver has only 80% of Hamilton's skill they'd still be winning anyway; and c) they could easily explain not hiring him if his demands became absurd

 

I was exaggerating to make a point ... I didnt mean it literally. 

 

That said, they have invested probably billions on F1 and hundreds of millions on LH alone ... so they must think its quite an important part of their overall marketing ... and now they have given him yet more leverage - so unless they are just irrational, there must be a good reason for this.... and even if they are irrational, using SV as a counterweight is surely much more difficult (and probably impossible) now that they have embarked on this campaign which is predicted on LH's continued presence in the team .... no? 

[SophieB]

yeah but you're a die-hard F1 (and Hamilton) fan, to be fair.  I'd suggest you're not the typical car buyer.  I mean, my last car purchase was a BMW and they're not even in F1.  I'm just very sceptical about how many people actually make their buying choices based on an F1 driver.

I was exaggerating, but I did seriously wonder about the F1 halo effect. About ten years ago I completely associated Mercs with conservative, but definitely rather dated luxury. Now I am conscious of seeing them as a cool brand. How much of that is down to a lot of work revamping the range and how much of it is down to a subconscious association with the race team and Hamilton, who can say? 

E. As John Wanamaker supposedly once said:

“Half the money I spend on advertising is wasted; the trouble is I don't know which half.”

[gillesfan76]

Tbh I still think of a Mercedes as an "old person who has made it" car (with some exceptions: the A Class for example).  Or a taxi.  And I think that's not uncommon.  I would question just how much that perception has changed because of F1 and I think most savvy car drivers know that there's only a tenuous link between the car they drive and the one that roars around a track every other Sunday.  I'm not saying that nobody will buy because of Hamilton, but I strongly question whether those sales figures are influenced in any way significant numbers.  

 

I guess I'm saying that I contest the idea that Mercedes' brand has been significantly affected by Hamilton in a way that it wouldn't have been with any other driver.  They'd still be winning, let's face it.  Possibly not on pole this weekend, who knows, but overall they'd still be getting exposure.  A that's no reflection on the driver but I feel that people on forums like this, the die hard fans, place far more importance on it than most, and people on forums like this aren't in large enough numbers to make a huge commercial impact

 

Have you been to China or for that matter anywhere in Sth East Asia? The rich kids and young & wealthy mostly drive Mercs now. Line up post-2015 Merc, Audi and BMW’s next to each other and the Merc looks the classiest, Audi close second and I’ve no idea what BMW is doing with their design these days, getting worse and worse. You can contest it all you want, and you may be right, but only Merc know the numbers and they of course do detailed surveys to measure these things.

[P123]

I was exaggerating, but I did seriously wonder about the F1 halo effect. About ten years ago I completely associated Mercs with conservative, but definitely rather dated luxury. Now I am conscious of seeing them as a cool brand. How much of that is down to a lot of work revamping the range and how much of it is down to a subconscious association with the race team and Hamilton, who can say? 
 

 

Colin McRae:  transformed Subaru from a farmer's car.... to a boy racers favourite.

[gillesfan76]

I hate you

 

Haha it’s all relative. One of my good friends has an Audi R8 and that thing is pure porn. The engine is ridiculous. The worst thing is he let me drive it a few times and now everything else feels a bit ****.

[FLB]

Colin McRae:  transformed Subaru from a farmer's car.... to a boy racers favourite.

And Audi got its current mojo at Le Mans.

[RekF1]

Haha it’s all relative. One of my good friends has an Audi R8 and that thing is pure porn. The engine is ridiculous. The worst thing is he let me drive it a few times and now everything else feels a bit ****.

I've got a Volvo

[shure]

I was exaggerating to make a point ... I didnt mean it literally. 

 

That said, they have invested probably billions on F1 and hundreds of millions on LH alone ... so they must think its quite an important part of their overall marketing ... and now they have given him yet more leverage - so unless they are just irrational, there must be a good reason for this.... and even if they are irrational, using SV as a counterweight is surely much more difficult (and probably impossible) now that they have embarked on this campaign which is predicted on LH's continued presence in the team .... no? 

the cynic in me suggests that they may have recognised the positive reputational benefits from making such a public show of support for Hamilton.  There's no real downside for them and if they can keep their star driver happy while generating significant column inches in publicity then why not?  They don't actually need him to continue that project, although it undoubtedly helps having him onboard.  And I stress that they would be mad to want to end their association with him, given the success of the partnership, but hyperbole aside I also think that is not quite the same as caving in to any demand he might make (not saying he would do that, but in the context of this discussion).  They still have the best car so it's not like everything would fall apart should he leave.  Drivers would be queuing up to break their contracts!

I 

[jjcale]

I read it as they would have had to spend 80m on advertising to get the F1 exposure they were getting, now they'd have to spend 4.5bn.  It must be an internal measurement of the value of F1 to the brand.

 

Even so, that cant possibly be a apples to apples comparison .... but then it was claimed trump got $2bn in free advertising in 2016 just by being in the news so much ... so maybe this is what they are suggesting for Merc... but even so seems high.

[PlayboyRacer]

Colin McRae: transformed Subaru from a farmer's car.... to a boy racers favourite.

Great example. Mercedes, through their AMG range, have long left their old reputation behind as "old mans luxury". I personally believe the C63, which first arrived in 2008 iirc, had much to do with that.

[THEWALL]

Have you been to China or for that matter anywhere in Sth East Asia? The rich kids and young & wealthy mostly drive Mercs now. Line up post-2015 Merc, Audi and BMW’s next to each other and the Merc looks the classiest, Audi close second and I’ve no idea what BMW is doing with their design these days, getting worse and worse. You can contest it all you want, and you may be right, but only Merc know the numbers and they of course do detailed surveys to measure these things.

Mercedes classiest? I don’t know exactly when they changed the star, so, basically, the whole brand’s image, from the solid, hollow one to the cheap one with the plastic, but that alone makes them look less classy. And yeah, kids and young and wealthy not really associated with classy...

[schubacca13]

Maybe it's different in middle east, asia or wherever but in Germany AMGs don't have the best image with their fake misfires, exhaust bangs...

[jjcale]

the cynic in me suggests that they may have recognised the positive reputational benefits from making such a public show of support for Hamilton.  There's no real downside for them and if they can keep their star driver happy while generating significant column inches in publicity then why not?  They don't actually need him to continue that project, although it undoubtedly helps having him onboard.  And I stress that they would be mad to want to end their association with him, given the success of the partnership, but hyperbole aside I also think that is not quite the same as caving in to any demand he might make (not saying he would do that, but in the context of this discussion).  They still have the best car so it's not like everything would fall apart should he leave.  Drivers would be queuing up to break their contracts!

I 

 

I think LH + merc is now to be considered in the realm of marketing and not in the realm of sport .... as a driver, they can replace him ... as the totem of their marketing strategy, no they cant - and they just made it worse.

 

But agree to disagree, if you dont see it my way.... it could make an interesting discussion in another thread.

[gillesfan76]

I've got a Volvo

 

Nothing wrong with that, they’re very safe! The current Volvos have sensational design, clever interior ergonomics.

 

Even old Volvos have some soul. I’d rather drive a 30 year old Volvo than some generic cheap plastic thing (I don’t want to mention any particular brands/models lest I offend someone).

[jjcale]

Maybe it's different in middle east, asia or wherever but in Germany AMGs don't have the best image with their fake misfires, exhaust bangs...

 

Somewhere in the Bible it says:  A prophet is without honour in his own country...

[schubacca13]

Somewhere in the Bible it says: A prophet is without honour in his own country...

You could add at least Austria, Swiss too if you like

Edited by schubacca13, 11 July 2020 - 17:25.

[Ivanhoe]

Maybe it's different in middle east, asia or wherever but in Germany AMGs don't have the best image with their fake misfires, exhaust bangs.

Same here, they are mostly considered as German rice cars, just like the Audi S and RS’s.

[shure]

Have you been to China or for that matter anywhere in Sth East Asia? The rich kids and young & wealthy mostly drive Mercs now. Line up post-2015 Merc, Audi and BMW’s next to each other and the Merc looks the classiest, Audi close second and I’ve no idea what BMW is doing with their design these days, getting worse and worse. You can contest it all you want, and you may be right, but only Merc know the numbers and they of course do detailed surveys to measure these things.

BMW still outsells Mercedes in China, though, according to latest (2019) published figures (724K vs 693K).  In fact BMW recorded the largest increase in market share, too.  Mercedes is #1 luxury car brand globally - but again BMW is pretty close behind (2.34 vs 2.17 million units).  Given that BMW isn't even in F1, I'd wonder how we can quantify the Merc F1 effort since it doesn't appear to be giving them that much of a competitive edge on the sales floor?  I think you're right that they have the figures, but I doubt whether it's as big an impact as some on here seem to think

[Counterbalance]

BMW still outsells Mercedes in China, though, according to latest (2019) published figures (724K vs 693K). In fact BMW recorded the largest increase in market share, too. Mercedes is #1 luxury car brand globally - but again BMW is pretty close behind (2.34 vs 2.17 million units). Given that BMW isn't even in F1, I'd wonder how we can quantify the Merc F1 effort since it doesn't appear to be giving them that much of a competitive edge on the sales floor? I think you're right that they have the figures, but I doubt whether it's as big an impact as some on here seem to think

Wolff was talking about their overall returns regarding marketability, not the Mercedes sales figures.

[SophieB]

Wolff was talking about their overall returns regarding marketability...

I don’t know what this means, could you put it another way?

[shure]

Wolff was talking about their overall returns regarding marketability, not the Mercedes sales figures.

I'm genuinely curious how that's quantified, though? Because ultimately doesn't it all translate down to sales impact (you can probably tell I'm not a marketing major...)?

[HeadFirst]

Racing first got me interested in purchasing a Subaru SUV. It was ski racing (they sponsored the US Ski Team) ... does that count? 

[Counterbalance]

I don’t know what this means, could you put it another way?

From what I could gather from Wolff's comments, (to me) it meant that the amount of extra sales revenue of all their sponsors hit a combined total of $4.6bn.

[Ivanhoe]

Racing first got me interested in purchasing a Subaru SUV. It was ski racing (they sponsored the US Ski Team) ... does that count? 

Sure does.I bought a Volvo because of their involvement in the Whitbread Round the World race.

[Counterbalance]

Sure does.I bought a Volvo because of their involvement in the Whitbread Round the World race.

I tend to use the train, what does that say about me?

[404KF2]

The Peugeot 404 winning the East African Safari 4 times (1963, 1966, 1967, 1968) has ensured that I've owned one since age 20 which by now is for a long time.  So yeah, for ancient rally cars at least.