The Business of Formula Motorsports
Modified On Oct 20, 2015 01:37 PM By Parth Mahendra
Why the possible return of the formula 1 sports in 2016 very significant for India?
India has successfully hosted Formula 1 for three years on its world class racing circuit. The deep Indian connect to Motorsports and its impact on sectors like tourism, logistics and hospitality.
Introduction to Formula Motorsports
Formula motorsports is an open-wheeled single-seater motorsport governed by the Federation Internationale de l'Automobile based on regulations called formulae. It includes categories such as Formula 1, GP2, Indycar Series, Formula Renault and the newly launched Formula E Racing. The most popular among all the categories is Formula One which hosts grand prix spanned over 19 counties across five continents the newest addition to the family the Formula E Racing which promises to increase the use of Electric cars in the urban areas and contributing to the environment through constant innovation and investment in R&D
“Formula 1 is extremely good for the economy with the kind of tourists coming in for the event. It also provides a lot a visibility and mileage for the country. The recently organized Russian Grand Prix was the best example of a country to showcase its events on a global scale. Any kind of government support will be very beneficial as making money for any GP host is challenging. It was prestigious for us a country to host the Indian GP and I would be excited if it makes its way back on the formula 1 calendar soon. “– Mr.Gautam Singhania – Chairman Raymond Ltd and Founder Super Car Club India.
The Business Aspect of the Formula Motor Sports
“Who wouldn’t want F1 to be back in India? It’s not just because hotels have vested interest in it, but primarily because it is good for the country’s economy too. It has resulted in a boom in the Tourism Industry” Mr. Arun Arora - GM - Radisson Blu Hotel Greater Noida
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Motorsports businesses are epitome of a lean business model for example cars are monitored every second to track the performance and predict exactly the changes needed before the car actually arrives. The major contribution by a global racing event is to the Indian Tourism Industry, which is one of the largest services Industry with a contribution of 6.23% to our GDP. A global motorsports event aims to attract atleast 35,000 tourists along with 2500 team personnel who travel to the racing destination along with the drivers and team which primarily includes the racing engineers, Pit crew, and PR and marketing teams. Apart from Tourist and Team Members, Motorsports events attract wealthy enthusiasts who can spend a lot of money on F&B and Accommodation through which these industries can benefit greatly.
Speaking with Mr. Arun Arora, General Manager of Radisson Blue Hotel Greater Noida which hosted the Redbull Racing, Torro Rosso, and Williams Formula One Teams from 2010 to 2013 said that “Any global event is a perfect occasion for India to showcase the best in terms of Indian cuisine, culture, artifacts and traditions. The hotel saw a threefold increase in the revenues in pre and post formula 1 weekend primarily coming from Room Tariffs, F&B and minor operating business such as its sprawling SPA and Travel packages to places like Taj Mahal, Agra which has an excellent connectivity with the new expressway”. The resort also saw an overall increase in the foreign tourist from all corners of the world even after the formula 1 events, coming from the appreciations of the formula 1 fan community and media coverage from the after parties which saw the likes of Deepika Padukone and Anil Kapoor staying at the hotel.
The hotel turned the ambience of the hotel similar to F1 track with race cars, pit girls and also displayed checkered flags in the lobby, to create a visual impact and a memorable experience for all their guests. During events like F1, the guests who stay with us (barring the teams), are here on a leisure trip…because of which the spa and F&B gain the maximum. We do not need to design a separate package on these days, because we know the demand for both the spa and food will be high irrespective of the rates said Mr. Arora. All this generates a lot of revenue for the government in terms of various taxes levied at state and central level in addition to investment and development of real estate around barren land parcels. Perhaps India should also learn from Singapore which will be counting on its Formula One night race to help make up for a 30 percent drop in Chinese tourists this year.
The Indian Connect to Motorsports
"The addition of the Indian Grand Prix to the Formula One calendar was a big asset to the sport and the brand Formula One, because India represents a very important country and economy in the world, so we were very happy to include it into our sport as well. As for the track our drivers gave very positive feedback; it’s a very interesting track. The event itself was a very impressive one seeing that it was set up by a private consortium and the crowds we could attract particularly at the inaugural event. More over the promoters and the fans welcomed us in a warm, typically Indian way. It’s a pity that’s not on. The calendar anymore, and we as Sauber sincerely hope, not only for personal reasons, that the Grand Prix can come back into the calendar because it only enriches our sport" – Mrs. Monisha Kaltenborn Sauber F1 Team Principal
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The contribution of Indian Companies to Formula Motorsports has been substantial. Leading the pack is Tata Communications which is an Official Connectivity partner of Formula 1 along with being its official Web Hosting and Content Delivery Network Provider of Formula1.com through which the sport reaches out to its tens of millions of fans across the globe. Tata Communications has mastered the setting up of a trackside data center at each race location in two days and dismantling it in just three hours, a process that would traditionally take weeks. Formula One also saw the birth of the Sahara Force India Formula One Team the only Indian team in the history of formula 1 which debuted in the Australian Grand Prix of 2008 and in just 5 years the team is currently the top 5 formula 1 constructors team ahead then the formula one teams such as Lotus, McLaren and Caterham.
The FIA Formula E championship, the world's first fully-electric racing series saw Mahindra Racing Formula E Team entering the category. It is the eighth and the only Indian team to join the E racing series with India’s very own Karun Chandok and Brazil’s Bruno Senna being the Team Drivers. India’s leading tyre manufacturer JK Tyres has been associated with the world of motors sports for over three decades. The company has invested in multiple grassroots motorsport properties and programs and has made an important role in discovering racing talents like Karun Chandok, Narain Kartikeyan and Aditya Patel among others.
Motorsports in India cannot be discussed without mentioning the name of Mr.Gautam Singhania also known as India’s Drift King winning his first All-stars European Drifting Championship in Malta. From forming India’s first super car club (SCC) to being India’s first to secure podium at the world’s biggest Ferrari event – Finali Mondiali at Abu Dhabi’s Yas Marina Circuit and holding the fastest lap record at the Buddh International Circuit, his contribution to represent India on the Global Motor sporting Map has been immense. Winning both the races of the 2014 Pirelli Ferrari Open held at Brands Hatch, UK he is one of the most widely followed Petrol Head in the world. Mr. Singhania believes that formula motorsports can make a comeback if policies are favorable for hosting the GP by organizers. The Parx supercar show 2014 organized by the SCC India which was is in its 6th edition attracted around 50,000 automotive enthusiasts at the exhibition. Mr.Dilip Joshi, Chairman SCC India and Head FMSCI west believes that all the right infrastructure is in place and what we now need is support from the sports ministry towards this category.
What does the future hold for India in Formula Motor Sports?
“We have a saying in India called Atithi Devo Bhava,its time we take it seriously for this sport which is one the most hyped sports in the world which promotes brand India like no other”– Mr. Vicky Chandok – Former President FMSCI
“The government should support budding driver’s right from the start like go karting events. All this sport needs is awareness”– Mr. Aditya Patel - Audi India Racing Talent and GT Car Driver
With the assurance by the organizers on resolving the taxation and other issues with the Formula One Management, the return of formula one in 2016 will be very much possible which is also backed by the Formula 1 Supremo Mr. Bernie Ecclestone recent statement to the PTI.The future for India in Formula Motor Sports looks very promising. With Mahindra Racing entering in the Formula E Racing the boost to the Motorsport Fraternity in India is immense. The formula E races are planned in new venues like city centers instead of existing racetracks. Watching state of the art electric cars racing around cities would be different experience for a motor sports enthusiast in India altogether. The most innovative ways of this category is harnessing the power of social media and motor sport in a way that’s never been done before called Fan Boost which allows Fans to vote directly for their favorite driver and potentially influence the outcome of the race by giving three drivers with the most votes one five-second ‘power boost’, temporarily increasing their car’s power from 202.5bhp to 243bhp. Every time when a fan votes it can be onto their Facebook timeline or as a hashtag in their Twitter timeline making this activity very beneficial in a country with one of the largest social media audience.
Companies like Tata Motors with their Tata Prima Truck Racing and Volkswagen with their Polo R Cup have been already utilizing the Buddh International Circuit for their racing series generating keen interests from the Indian masses. India is also showcasing its R&D capabilities to the world with Mercedes Benz, BMW, and Honda investing heavily in its state of the art research centers in India. Former President of FMSCI Mr. Vicky Chandok is very confident that the Modi Government will make all efforts to bring this sport to India. “When you see the heads of the states visiting the GP you know the importance of this event and the kind of promotion it generates for the country is phenomenal” Said Chandok. According to him the government should provide ease of customs and import policy which requires a deposit of a massive 100crores apart from a sport development fund of 10crores every year. Commenting on the future of the formula motor sports in India Aditya Patel, Audi India’s racing talent said “Though India is already on the global map due to technological advancements hosting events such as Formula One it is very important for the country to make itself as a long term racing destination with the support of the Indian Government and by promoting the sports right from the start like Go karting events and creating facilities both for car and bikes thereby creating awareness towards the sport. Once we see more Indians in the sport it will grow for sure”