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South Korean-based global electronics company LG bucked the credit crunch by announcing a five-year partnership with Formula One on Wednesday.

"History shows that if you want to build a brand, you have to invest in that brand," the company's chief marketing officer Dermot Boden told a news conference with Formula One supremo Bernie Ecclestone.

"And if you want to be successful, investing when there's a downturn is probably one of the best times to really build your brand," he added.

Ecclestone said LG would become an official sponsor of Formula One, a glamour sport with an increasing presence in Asia and the Middle East, with the company's branding to be visible on the international broadcast feed, timekeeping systems and graphics.

LG, with 82,000 employees worldwide and 2007 global sales of $44 billion, will also acquire marketing rights as the sport's official consumer electronics, mobile phone and data processor.

No financial details were given, although Boden told Reuters the sum would amount to tens of millions of dollars over the period.

"It is not a cheap arrangement," he said.

The company also sponsor Fulham football club in the English Premier League and Boden said that commitment would not be affected by the new F1 deal.

"We are not pulling back in other arrangements to make this investment," he said. "We have some very important partnerships around the world...and we will definitely be honouring those arrangements right through.

"LG is committed to supporting our marketing programmes and in fact will probably increase our expenditure next year even though there are these economic situations," he added.

CONSTANT PRESENCE

Boden said LG had considered the option of sponsoring a Formula One team but the deal with Ecclestone gave them a consistent presence for the duration of each race. The sport would also always be there, while teams might not be.

"We are making a statement, we want to build our brand," he said. "We will be supporting our marketing activities even though things will be tough next year, even though the business environment will continue to be challenging.

"One of the great things about Formula One is that there is only one Formula One...There is nothing else really to challenge it. And their choice of race locations is proving interesting now, the expansion into Asia and more into the Middle East.

"This is one of the first truly global alliances we have sought and I think it offers us a great opportunity to build our brand around something."

Ecclestone played down the impact of the credit crunch on the sport, despite the major car manufacturers who own most of the teams suffering from a worldwide slump in sales, plunging share prices and factory layoffs.

Canada and France have fallen off the 2009 calendar for financial reasons but oil-rich Abu Dhabi is due to make its debut as a venue while Singapore hosted the first night race this season.

South Korea is also scheduled to host a race in 2010 along with India.

"Maybe the (race) promoters will be affected by the crowd being smaller, I suppose, although from what we can see at the moment most of these circuits say their tickets have more or less been sold out," said Ecclestone.

"So perhaps I'm wrong in that area. We'll have to wait and see. I don't think anyone can say what will happen in six months."

(Source: Reuters)