Business Asia: Formula One's Race for Asia - WSJ.com
Formula One's Race for Asia
By Fraser Howie
Later this month the Formula One circus will roll into China's financial capital for the seventh annual Shanghai Grand Prix. It will be one of six races to be held in the Asian time zone this season. The world's most expensive sport is looking for growth outside its traditional center in Europe, and Asia is the key new market. Whether Asia will live up to the dreams of the F1 bosses is another matter.
F1 has a long history in some parts of Asia. Japan's Suzuka circuit dates to the early 1960s, and the Japanese fan base rivals that of many countries in Europe. Japanese drivers and constructors (F1-speak for carmakers) are well established. Malaysia lacks that tradition, but it still hosted the first F1 race in Asia outside of Japan in 1999. For years Malaysians have been race hosts and team sponsors and there was even a Malaysian driver for a season.
Lately, however, Asia has witnessed a new phenomenon: Hosting a Formula One race has become a status symbol to display growing economic clout. Many locations with no history of motorsport have spent hundreds of millions of dollars to build circuits and buy the rights to hold major races.
Consider Singapore, which in 2008 hosted its first F1 event. The city-state spent 150 million Singapore dollars ($107 million) for the right to host one of the 19 "grand prix" events of the racing year for five seasons, with the Singapore Tourist Board contributing 60% of the money and the rest coming from private enterprise. The result has been a popular night race under hundreds of floodlights through the city's business and historic district, bringing in tourist revenue for the city-state and Asian exposure to F1. Abu Dhabi topped that in 2009 with a race starting in daylight and ending in the moonlight.
But these successes haven't arisen from the growth of a local market for F1, so much as from Asia's ability to cater to fans back in Europe. The evening race times fit afternoon European television schedules for the established audience. Sparking greater Asian interest in F1 will be the key to transforming the region into a profit center for the sport rather than merely an exotic locale for the races Europeans watch on television.
In this regard, the race between China and India is the most interesting event. China has taken a "build it (with government money) and they will come" attitude. The state-of-the-art Shanghai circuit, which opened in 2004, cost $240 million and was built in only 18 months, probably a year faster than it would have taken in Europe. The first event there became the most anticipated race of the season. State support was instrumental: The Shanghai government paid all the bills for circuit construction, supporting infrastructure and the $50 million per year to host the race. The main sponsor was none other than the state-owned oil company, Sinopec.
Yet local interest has been limited. The racing circuit is an inconvenient 30-odd kilometers from the city center. The cheapest grandstand tickets cost more than $100 in a city where the average salary in 2008 was less than $500 per month. Race organizers had to bus in spectators from the ranks of employees at local state-owned companies to make sure the stands looked full on television—and what little initial excitement there was has only waned.
India's approach has predictably been more haphazard. The country has yet to host a race, although a Delhi event is expected in 2011. But that hasn't stopped Vijay Mallya, the Indian equivalent of Richard Branson, from jumping in. Mr. Mallya bought a 50% stake in the Spyker team for 88 million euros ($118 million) in late 2007 and immediately rebranded it as Force India. The team struggled in its first season but in August 2009 it took second place in Belgium and fourth place in Italy two weeks later. Force India has become a solid middle-tier team within two years and there's no reason to think it couldn't be a serious top-tier contender down the road.
F1 provides a global advertizing platform for the larger-than-life Mr. Mallya, chairman of the United Breweries Group and Kingfisher Airlines, and owner of the Bangalore Royal Challengers cricket team. His lavish lifestyle is a source of endless press fascination, which in turn reflects onto his F1 team. Although F1 interest in India is in its infancy, his involvement certainly has brought the sport more media attention. It hardly matters that he's probably losing money on the team (as, reportedly, do most owners, although the financial reports are always a closely guarded secret).
Mr. Mallya's F1 effort more closely resembles the successful formula in Europe—the collision of fast cars and big egos that gives fans excitement both on and off the track. China's mistake has been thinking a flashy track alone will do the trick. Because there are no Chinese personalities of Mr. Mallya's type in F1, the Shanghai race ends up being merely one weekend out of 19 in the racing calendar.
India is often thought to play runner-up to China when it comes to economic achievements. But at least in F1, China's trophy event may prove to be no match for India's podium finish.
Mr. Howie is co-author of "Privatizing China" (Wiley, 2003). News > F1 teams had input into India's GP circuit - Motorsport.com
F1 teams contributed to the design of India's new circuit.
Under construction since last November outside the capital Delhi, the layout was penned by the Formula One regular Hermann Tilke's German company.
But, Mark Hughes, vice president of promoter Jaypee who have signed a ten-year race contract with Bernie Ecclestone, said the teams have also been involved in the shape of the track that could be the fastest on the calendar after Monza.
"We sent the details to all the teams and they programmed the information into their simulators and gave us feedback on where we could make improvements and add overtaking opportunity points," he said in an interview with Reuters.
Hughes, formerly involved with the Bahrain race, said he expects the privately-funded $350 million venue to host its inaugural race next October.
Dug up the above two update articles, in the first one, interesting how China has approached the Gran Prix, and the second one, that the Noida track would be the second fastest
If all goes well, get ready to travel to New Delhi next October !!