09/12/2009
NEWS STORY
Following his keynote address to the 2009 Motor Sport Business Forum in Monaco, Lotus F1 team principal Tony Fernandes was joined on stage by Cosworth General Manager Mark Gallagher, Mumtalakat Holdings CEO Talal Al Zain, CISCO Business Development Director Neville Wheeler and Mangrove Capital Partners partner Gerald Lopez, who is currently bidding to buy the Renault F1 team.
The recent manufacturer withdrawals from Formula One were a major talking point with most of the panel in agreement that the change represented an opportunity rather than a disadvantage for those coming into the sport.
"The situation is such right now that it provides an opportunity to come in at a time of change," said Lopez. Times of change usually provide a good entry point into a business. There is a chance to build on a platform that has to reinvent itself."
If Lopez is successful in buying the Renault team he will use it as a platform to promote other businesses. "The opportunities lie not in making money from the team but rather from using it as a business platform for other opportunities," he said. "Formula One is especially a great business-to-business platform. I've seen it turn even the most seasoned executive into a kid."
Talal al Zain agreed that the decision of Mumtalakat, the investment arm of the Kingdom of Bahrain, to buy a 30 per cent stake in the McLaren team was never about the linking with a manufacturer but rather about being part of the sport itself. "Our decision to invest in McLaren was about being part of a Formula One racing team not about linking up with a manufacturer," he said.
This is the same for most of the new teams coming into the sport. The business model for new teams has certainly benefited with the introduction of Cosworth as an independent engine manufacturer. This means teams can now buy engines for a fraction of the previous cost.
"Whilst the manufacturers were supportive of the new teams they couldn't commit to supply deals," said Mark Gallagher (pictured). "This is now understandable in the case of Toyota and BMW. Cosworth had to make a commitment to come into F1 and guarantee to make engines as cheap as possible. We are now supplying engines for 10 per cent of a team's budget."
Despite the departure of Honda, BMW, Toyota and possibly Renault, four speakers believe that manufacturers will eventually return to the sport.
"This is not the first time manufacturers have left Formula One," said Lopez, "and I am sure others will take their place. Manufacturers are being created in new geographies. The next generation of manufacturers do not have to come from Europe."