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Scale economies in Nascar

The days of the "one-car team" in Nascar - i.e. an owner & driver operating out of their garage - are over. And the two-car team may soon be a thing of the past.

The old days:

"For a while there weren't people who could make a two-car team work," [Owner Ray] Evernham said. "Junior Johnson tried it and then when Rick Hendrick went to two and three, everybody told him he was crazy."

The present and future:

"Right now you've got to look at your competition," Evernham said at Daytona International Speedway on the eve of today's Pepsi 400. "Even though there are eight owners (who own the majority of cars), there's (five owners) who have won races. It's really hard to say where it's going to stop. ...If we don't get a handle on it, it could be 10 (cars per team) next year, who knows?

Where does that leave the eight one-car teams, not to mention the four two-car teams? In fact, do one-car teams still have a chance?

"Sure they've got a chance," said Evernham. "But they don't have as much chance as a guy that's got five. And the handwriting's on the wall. The one-car teams are kinda going by the wayside and soon it will be the two-car teams because if you look at it, the majority of them are having three (teams).

What conditions create scale economies from running a multi-car team? My guess: increased financial incentives to win, coupled with the gains from pooling information obtained by campaigning multiple cars. Do a little R&D with a couple of cars, find what works, then give that formula to your best mechanic and driver. Just a hunch, though.

Update: John Palmer emails: "Not to mention strategic driving..." He's right, of course; like it or not, "helping" other drivers has long been part and parcel of motor racing.

Deals for help were once (and can still be) made on the spot, taking advantage of momentary circumstances. But "teams" enforce contracts better, which affects pre-race planning and strategy. How much of a factor is this in the move towards multi-car teams? I'm not sure, but ponder this, from one of Danica Patrick's teammates in the KC race on Sunday (they start 1-2-3, with Patrick in pole position):

The three Rahal Letterman Racing teammates say they will be patient with one another throughout today’s race.

"We have to take care of each other in the race," said Meira, the 2004 race runner-up. "Buddy and I did that last year, and we’ll have to do it again. We know we have good cars, and let’s make a train at the front and go for it."

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