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F1 coming to India: Analysis: Part 2- What has India got to gain?

By: Karthik :+: Under: Business, Cars, Delhi - F1 GP, Formula 1, Motor Racing, Sports
On: ⋅ June 16, 2007 ⋅  Email this post ⋅  Print this post ⋅ Post a comment
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Part 1: Our Analysis on the circuit location is here

The Taj will be one of the major attractions. Photo from Saad.

Street circuit or not, F1 is coming to India, Bernie thinks, its better than the USGP.

Anywho, is this a boon for India or as Ashoe put it, a resource hog?

A one off GP will be a resource hog, the ROI, will not make any sense. But FOM signs a multi-year deal with most venues. We can safely assume at this point that this is the case with India.

Here is what India will get in return:

Tourism:
The tourism industry will be the first to enjoy the F1 impact. Besides the hordes of tourists who will show up for the event, delegations, reconnaissance teams from various factories and a plethora of media personnel will show up from now until the checkered flag is waved and a few weeks beyond that.

Delhi has a lot of old world charm that the west likes to photograph, it is near the Taj Mahal and is well connected to most parts of the world.

Rickshaws will not fly, if Delhi want’s to improve its image. Photo from VM2827

Infrastructure:
Indian airports are terrible. They make the Colosseum look like it was built and painted yesterday. It was sad and funny to note that the Airbus A380’s Indian tour had to be put off, because we did not have a large enough air field. So how are we going to handle at least 24 jumbo jets parked on the tarmac for about 10 days?

It looks like Delhi already has plans of modernizing its airport, they are also working on eliminating the red tape. Simultaneously, Macquarie Bank, the world’s second biggest owner of airports is working on acquiring airports in India.

No pressure, New Delhi will also be hosting the Commonwealth Games in 2010.

Popular hotel chains like the Taj Group already have plans of building new accommodations. Other companies will jump on the bandwagon in the near future.

There is only one way for Delhi to go, up.

Sponsorship:
Of the current car makers participating in Formula 1, Almost everyone has a product out in India.

Mercedes, Toyota, Honda, BMW, Renault (with Mahindra) and Ferrari (Fiat) have operations in India. Spyker has plans.
Red Bull has two teams, one using Renault engines and the other using Ferrari Engines.
Super Aguri is Honda’s B team in the context of this discussion and Williams uses Toyota engines.

Only if these guys had an F1 team. Image from babasteve.

End result, this is a great opportunity for the companies to market their cars. Besides just F1, you will find their sponsorship spilling into other smaller motor racing events and even improving facilities for up and coming drivers.

The major companies that sponsor F1 teams will also find an easy path to enter India for business / sponsorship deals.

Judging from recent news, you might even find a university or two in the long run.

Over time the three reasons above should enable repeat visitors and new ones who take advantage of the facilities to show up before / after the race providing much needed foriegn exchange currency to India.

Economic impact on people:
While the race might make the rich poorer (The cheapest ticket to The USGP is about $80), the skilled workers will have a chance to make a few bucks. Improving infrastructure relies heavily on the availability of man power and even after the completion of major projects, maintenance and upkeep will keep some of them in town.

New facilities will create the need for new jobs and I can see a lot of good things happening.

Are there potential pitfalls? That should be our next post.

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