It’s easy to view motorsport as a rarefied world of glitz and glamour awash with extravagant amounts of television money. But away from the buzz of the pit lane, commercial realities are taken seriously. Many teams have been forced to diversify into other sectors to secure additional revenues. And that process is seeing the application of track technology in some surprising areas.
The race to find new revenue streams has been a deliberate strategy implemented across the motorsport sector. A few years back, the Motorsport Industry Association (MIA), the trade body that represents Formula 1 teams and the wider supply chain, recognised that its members were failing to make the most of their state-of-the-art engineering capabilities. This narrow focus was exposing the sector to the risk of any fluctuations in TV revenues. So the sector made a concerted effort to start selling technologies and services to other target industries such as defence, aerospace, energy and transport.
Chris Aylett, chief executive of the MIA, explains the thinking behind such manoeuvring. “The secret to success in motorsport is good engineering and the ability to be innovative, week-in, week-out. To achieve that, most race teams invest an astonishing percentage of their turnover in research and development and the sorts of high-tech equipment that enables them to get new technologies to the track in very short timescales.
“But many teams weren’t sweating these assets – and we thought that was crazy,” he says. “They had the sort of skills and equipment that most other engineering companies would die for. So we encouraged them to go after new business, with the MIA taking up to 40 motorsport firms at a time into mainstream defence, aerospace and automotive facilities to showcase their capabilities. We were not interested in taking business off the existing supply base and doing it at lower price. Motorsport companies are about innovative technology solutions delivered in quick-fast time.”
There have been some notable diversification successes, particularly in the defence industry. In recent years, the Ministry of Defence (MoD) has issued calls for dozens of critical military upgrades known as Urgent Operational Requirements (UORs) to meet ever-changing operations demand from the conflicts in Iraq and Afghanistan. UORs require industry to move with speed and flexibility – the ability to get new equipment speedily to the frontline has saved lives.
Such requirements presented motorsport companies with opportunities. “We’ve had tremendous success in the defence sector – it has become a market worth many millions of pounds,” says Aylett. “Motorsport firms have become specialised in UORs. Our members were saying to the MoD they could get answers to problems in weeks, rather than years.”
An example of this motorsport support was the work that Northampton-based NAR Group carried out with defence giant BAE Systems to develop more efficient engine-cooling systems, radiators and filter systems for armoured vehicles that were struggling to cope with hot, dusty conditions in Afghanistan. NAR, which employs around 25 people and is better known for supplying cooling systems for high-performance sports cars such as Aston Martins, helped devise a technology upgrade that dramatically improved frontline vehicle availability.
“NAR came up with a solution almost overnight, and since then it has gone on to land large military orders for solving other problems,” says Aylett. “Other motorsport firms have won defence business developing new technologies in braking systems, transmissions and electronics. After all, motorsport is an arduous environment to test such equipment.”
One of the main F1 teams to take a proactive approach to diversification is Williams. While F1 remains its primary source of revenue, Williams also focuses on adapting its intellectual property to access other markets. Williams’ chief executive is Alex Burns, a career engineer who has worked at companies including Westland Helicopters and Meggitt. Burns’ broad industrial experience means he sees the bigger picture.
“We have a spread of skillsets around aerodynamics, lightweight structures, electronics, embedded systems and general onboard car systems,” he says. “Across those functions we have about 200 people employed on F1 and about 100 in non-F1 activities, with another couple of hundred staff in manufacturing. The heart of the business is F1 – but we have a diversification strategy centred on energy efficiency, safety and education. In each case, we are looking to take our F1 intellectual property and combine it with our capabilities around machining and rapid prototyping, to increase revenues in other areas.”