EXECUTIVE SUMMARY

THE NATIONAL SURVEY OF MOTORSPORT AND SERVICES 2000

A JOINT RESEARCH PROJECT COMMISSIONED BY THE

SPONSORED BY THE UK’S MOTORSPORT : SCALE, SCOPE AND FUTURE

The UK Motorsport Industry, and its regional heartland of , expertise, finance and knowledge from Motorsport Valley, is now recognised as a ‘global centre of and services alike, and from around the globe, to excellence’. produce world-class products, processes, services and results. This fast growing industry, which embraces motorsport, high This National Survey will create a greater understanding of the performance engineering and services is predominantly based in ‘essence’ of the industry, and its contribution to the competitive Britain. advantage of Britain’s economy. The Motorsport Industry Association (MIA), working closely with We are certain that this will, in turn, reinforce that position and its project sponsors, commissioned this comprehensive study ensure a solid platform for its future development. early in 2000. We created a research team with unrivalled experience within this sector. The industry, and its cluster, internationally recognised as Motorsport Valley, has rapidly become a key exemplar of 21st Chris Aylett century industrial policy. Knowledge generation, knowledge CEO - Motorsport Industry Association intensive firms, , transfer, diversification January 2001 and specialisation are central to this sector. It draws on [email protected]

THE RESEARCH TEAM

Published February 2001 © Motorsport Industry Association 2001 • All rights reserved. Module 1 Module 2 Module 3 Module 4 Motorsport engineering Best practice No reproduction, copy or of this publication may be made without the written permission of the MIA Motorsport services Domestic motorsport database and global database case studies participation PROGRAMME AIMS & RESEARCH geography matrix

Aims Design

• To provide a definitive statistical statement on the industry’s • The creation of a comprehensive industry database scale and scope predominantly through a substantial postal survey of the • To quantify and understand the contribution of the industry industry to the UK economy and regions • The production of a ‘thumbnail’ matrix of the global • To provide an industry analysis of current trends and future geography of motorsport production scenarios • A series of 12 ‘best practice’ business case studies • To provide a basis for the generation of national and • A postal survey of domestic participants in UK motorsport regional policy

University of Birmingham Henley Cranfield School of Sports Surveys AVAILABILITY of Newcastle College Management Nick Henry Martin Burridge Mark Jenkins Nigel Geach This survey is available in 2 publications - Full Research Study and Executive Summary, from March 2001, direct from the MIA, at the address shown. assisted by Tim Angus assisted by Jeremy Walton assisted by Nardine Collier assisted by Rebecca Stamp 1) Full Research Study (including Executive Summary) To order NICK HENRY, BSc., PhD., was recently MARTIN BECK-BURRIDGE BSc., MA is Director DR MARK JENKINS is a Senior Lecturer in NIGEL GEACH is a Director of Sports Marketing appointed to a Readership in Urban and of Automotive Studies, Co-Director of the Strategic Management and Director of the DBA Surveys, responsible for worldwide and This is the definitive 200 page study, published in CD format, which Please send your order, for UK delivery, with cheque /money order , Regional Studies in the Centre for Urban and Executive Development Programme and a programme at Cranfield School of Management. In marketing. A large proportion of the in covers each module; the methodology; the analysis; together with made payable to : Regional Development Studies (CURDS), Senior Lecturer in International Economics and addition to this post he has been a visiting which he is involved is within the Motorsports University of Newcastle. Previously, he was Strategy at Henley Management College. As well professor at the University of Colorado and Industry. In addition to traditional market research, Sports Marketing Surveys provides graphs, tables and comparisons achieved. The results are taken from the Lecturer in Economic Geography at the as being a visiting lecturer, he is also a contributes to programmes at Warwick Business MIA, Federation House, Stoneleigh Park, Warwickshire, CV8 2RF, UK consultant to a number of major international media evaluation for Formula One, measuring 600 returns, plus the 3000 questionnaires from the UK competitors. A University of Birmingham. In 1997, he School and Cambridge University. He is companies. From 1994 to 1998 he was Group the exposure and value of the sponsors involved. completed a widely publicised 18-month study well - defined overview and statement of current trends and future Allow 28 days for delivery Director, Strategy and Human Resources, at responsible for the 'Business of Motorsport' of the British motorsport industry which scenarios (SWOT Analysis) is created, together with a framework for Gresham Lion Technology. His main interests are module on Cranfield's new MSc in Motorsport Since joining Sports Marketing Surveys two years included the identification and systematic the world economy and trade, globalisation and Engineering and Management and has presented ago, REBECCA STAMP has worked on a large national and regional policy recommendations. Queries investigation of Motorsport Valley. He is the the impact of technological change. He is author his research, which focuses on knowledge, number of projects, including Racetrack, price - £250, inc VAT and UK postage author of numerous academic articles on the of "Britain's Winning Formula; Achieving World innovation and performance in the context of F1 periodical research with F1 fans worldwide, industry and In Pole Position: Motor Sport Leadership in Motorsports", published by racing, at a number of leading international providing information on their F1 viewing Should you wish to: Success in Britain and Its Lessons for the World’s Macmillan. conferences. habits, sponsorship awareness and attitudes 2) Executive Summary - Pay by card, Motor Industry, 1999, Euromotor Reports, towards the sport. She graduated in 1998 with a Ludvigsen Associates Ltd, London. JEREMY D. WALTON International motoring NARDINE COLLIER is a Research Assistant in the first class postgraduate degree in Social Research - Require a hard copy of the Full Research Study writer/author with 27 published (has Strategy Group at Cranfield School of methods from Surrey University. Sports worked in UK, USA, Germany, France and Italy). Marketing Surveys is also an official supplier of This 20 page report, with free CD, summarises the major points arising - Require overseas delivery TIM ANGUS, BSc., MSc., PhD., is a Research Management. Nardine joined Cranfield in 1998 the McLaren team. from the National Survey. Each of the four modules is covered, in Associate at the University of Birmingham. He and is currently undertaking a part-time PhD on has recently completed his doctorate on the the relationship between strategy processes summary, by the leader of the respective member of the Research Team. please contact the MIA on: Italian Motorsport Industry. In addition a National Overview is included. Tel: +44 (0) 24 7669 2600 • Fax: +44 (0) 24 7669 2601 and the innovation performance of organisations. price - £40, inc VAT and UK postage email: [email protected] [email protected] [email protected] [email protected] [email protected] 1SECTION 1.0 EXECUTIVE SUMMARY: THE NATIONAL OVERVIEW PAGE 5

CONTENTS 1.1 SCALE

Research Programme: Aims, Design, Team 2-3 • For the purposes of this research programme, the activity ranging from event infrastructure and business industry is defined as: services to sponsorship and merchandising

1. Executive Summary: The National Overview 5-7 - a set of engineering firms involved in the practice of - 'core' represents all firms who achieved 50% or over of high performance design and engineering ranging from annual turnover from motorsport activity 1.1 Scale 5 racing and rally car fabrication to kit cars and - 'non-motorsport' represents those firms who derived 1.2 Scope 6 engineering consultancy to components between 1% and 49% of annual turnover from 1.21 At the Heart of the Knowledge-Driven Economy 6 - a set of firms involved in motorsport related motorsport activity 1.22 A Global Centre of Excellence 7 1.3 Future 7 Annual Turnover Employment Firms

2. Motorsport Engineering: A UK Perspective 8-11 TOTAL TOTAL £4.6 billion 38,500 2.1 Research Body, Aims and Methods 8 MOTORSPORT ENGINEERING MOTORSPORT MOTORSPORT 2.2 The economic contribution of all motorsport engineering to the UK economy 8 MOTORSPORT MOTORSPORT 1200 ENGINEERING SERVICES ENGINEERING SERVICES 2.3 Core motorsport engineering: An economic profile 9 £2.9 billion £1.7 billion 25,000 13,500 2.4 The Global Geography of Motorsport Production 10-11 £0.5 4,200 2.5 Opportunities and Threats 11 MOTORSPORT SERVICES £1.0 £2.4 £0.7 CORE 7,000 6,500 CORE 2.6 Conclusions 11 20,800 SERVICES SERVICES SERVICES SERVICES 1000 MOTORSPORT ENGINEERING MOTORSPORT ENGINEERING NON MOTORSPORT ENGINEERING NON MOTORSPORT NON MOTORSPORT NON MOTORSPORT CORE MOTORSPORT ENGINEERING CORE MOTORSPORT 3. Motorsport Services: A UK Perspective 12-13 Growth Employment • The Top 50 surveyed motorsport engineering companies • Minimum estimated total UK employment generated by 3.1 Research Body, Aims and Methods 12 achieved, between 1990 – 2000: motorsport engineering and services activity is 38,500. 3.2 The economic contribution of all motorsport services to the UK economy 12-13 This figure equates to: - 523% growth in average annual turnover 3.3 Core motorsport services: An economic profile 13 - 227% growth in average employment a) Minimum total UK employment of approximately 25000 3.4 Opportunities and Threats 13 persons generated by motorsport engineering, of which: • The Top 50 surveyed motorsport service companies 3.5 Conclusions 13 achieved, between 1990 – 2000: - 20800 persons are employed in ‘core’ motorsport engineering 4. UK Motorsport: Best Practice Case Studies 14-15 - 25% growth in average annual turnover - 4200 persons are employed in ‘non-motorsport’ - 12% growth in average employment engineering

4.1 Research Body, Aims and Methods 14 Turnover b) Minimum total UK employment of approximately 13,500 4.2 Key aspects of best practice within the UK motorsport sector 14 • The annual turnover value of motorsport engineering generated by motorsport services, of which: and services to the UK economy is estimated at 1 4.3 Constraints and threats facing the case study firms 15 approximately £4.6 billion . This figure equates to: - 6,500 persons are employed in ‘core’ motorsport 4.4 Concluding observations including threats 15 services a) £2.9 billion turnover generated by motorsport engineering, - 7,000 persons are employed in ‘non-motorsport’ 4.5 Case Study participants 15 of which: services

5. UK Motorsport: Participation 16-18 - £2.4 billion turnover is generated by ‘core’ Firms motorsport engineering • Core motorsport engineering and services companies - £0.5 billion turnover is generated by ‘non-motorsport’ are estimated to number 2200, of which: 5.1 Research Body, Aims and Methods 16 engineering 5.2 Sample profile 16 - approximately 1200 comprise motorsport engineering b) £1.7 billion turnover generated by motorsport services, - approximately 1000 comprise motorsport services 5.3 Moving into, and out of, motorsport 16 of which: 5.4 A set of highly committed participants 17 • Over three quarters of motorsport engineering and - £0.7 billion turnover is generated by ‘core’ motorsport services firms have been established within the last 20 5.5 Future participation in motorsport 17 services years 5.6 Accounting for lapses in licence holders 18 - £1.0 billion turnover is generated by ‘non- motorsport’ services 5.7 Conclusions 18 1 These figures relate to turnover as listed by respondents. Thus, this is not • The UK motorsport engineering and services sector 5.8 Opportunities for the future 18 produces over £2 billion worth of annual export a figure of value added and aggregation can result in double-counting. earnings. SECTION 1SECTION 1 PAGE 6 PAGE 7

1.2 SCOPE • Around 90% of current US CART cars are British-built Motorsport Services Activity 1.3 FUTURE

• World class component manufacturers include • Dominance of global motorsport services activity is less AP Racing, Alcon, Goodridge, Xtrac, and Zytek Opportunities 1.21 The UK Motorsport Industry: At the well known but highly significant Heart of the Knowledge-Driven Economy • In the last decade, British-built cars have won the • The region includes the largest number of world-class World Rally Championship more times than any other • On a global scale, a still young and growing industry racing schools • The industry exhibits a variety of characteristics nation • Emerging markets such as Asia Pacific and Eastern emblematic of the knowledge-driven economy: • London is the base for Formula One Management, the • The list of OEM motorsport activity located in Europe World Rally Championship organised by ISC and the - Clustering in Motorsport Valley Motorsport Valley includes Audi, BMW, Mercedes-Benz, world’s largest motorsport publisher, Haymarket. • Process of internationalisation of motorsport activity (for - High value added activity Ford, Honda, Hyundai, Jaguar, MG Rover, Mitsubushi, Nissan, Renault, Subaru, and Vauxhall (GM) • A number of motorsport services were “invented” in the example, USA) - In combinations of both high technology manufacturing and services, including ‘creative’ region (for example specialist ) • The broader industrial applicability of performance activities engineering

- High quality skilled labour force • Growth of specialist motorsport services industry - High rates of R and D expenditure, (for example, marketing and media) - Reflecting innovation as day-to-day activity 'To understand the business MOTORSPORT SERVICES • Develop grassroots UK competition and participation - Networks of firms (large and small) environment of the motorsport (for example, amongst women) - High rates of new firm formation industry, it must be recognised • Motorsport is part of the global sports and • Attract new sources of investment - High levels of exports and global outlook leisure economy (including the activities of • World class companies in both motorsport engineering that: marketing and sponsorship) - Global sources of inward investment and services able to take advantage of opportunities - Growing role of venture capital • Promote the world’s premier motorsport cluster: • Motorsport Valley is home to the still emerging - Rapid adoption of e-commerce and trading PERFORMANCE ENGINEERING Motorsport Valley UK sectors of motorsport services

1.22 UK Motorsport Valley: A Global Centre • Motorsport is the public ‘brand’ of performance • Many world class motorsport services Threats of Excellence engineering companies are located in Motorsport Valley • Growing global competition • Motorsport Valley is the premier ‘production’ site for • Performance engineering represents high value global motorsport activity • There are strong historical traditions, yet limited • Growing overseas with the potential to added, low volume manufacturing, through the weaken the cluster • World-class activity ranges from fabrication, development, of motorsport participation in the combination of high technology disciplines and components and design consultancy to racing UK • Growing gap between the most successful companies creative design. schools, testing and event management. and the rest

• The region is at the apex of large numbers of global INTERDEPENDENCE • Skills shortages and lack of relevant training (both with OEM’s and sponsors) • Motorsport Valley is the world’s premier programmes motorsport cluster • The motorsport industry is growing through the • Creeping loss of technological leadership in key areas Motorsport Engineering Activity (for example ) • Many world class performance engineering mutual interdependence of engineering and • Approximately three-quarters of the world’s single-seat companies are located in Motorsport Valley services activities • Cyclical nature of the industry and the financial support racing car production is British-built from sponsors / investors

• 80% of the 179 Formula One World Championship races have been won by British-built cars in the last 10 years, and 7 of the 12 teams are based here SECTION SECTION 2 2 PAGE 8 PAGE 9

2.0 MOTORSPORT ENGINEERING: 2.2 The economic contribution of all 2.3 Core motorsport engineering: • The top 20 surveyed motorsport engineering A UK PERSPECTIVE motorsport engineering to the UK an economic profile2 firms accounted for: economy • It is estimated that core motorsport engineering - 24% of national annual turnover in the core 2.1 Research Body: • The turnover value of all motorsport engineering is companies in the UK number in excess of 1200 in total The University of Birmingham and the University of estimated at approximately £2.9 billion - 16% of national employment in the core Newcastle • Average annual turnover is £3,442,1813 • This figure equates to: - which has increased by 263% in the decade - had experienced a 523% growth in average annual Aims: 1990 - 2000, from £947,762 - £2.4 billion of annual turnover generated by turnover between 1990-2000 - To provide a definitive statistical statement on the scale motorsport activity in ‘core’ motorsport engineering • Average employment per company is 23 and scope of UK motorsport engineering companies (where ‘core’ turnover is where more than - which has increased by 92% in the decade - had experienced a 260% growth in average 50% is generated by motorsport activity) 1990 - 2000, from 12 employees per company employment between 1990-2000 - To quantify and understand the contribution of - £0.5 billion of annual turnover generated by • Of average employment, motorsport engineering to the UK economy and its’ motorsport activity in ‘non-motorsport’ engineering - 83% is male full time regions companies (where less than 50% of turnover is • The top 50 surveyed motorsport engineering generated by motorsport activity) - 9% is female full time firms accounted for: - To provide an analysis of current trends and future • Note that in the ‘core’ scenarios - 4% is male part time a) an average of 90% of annual turnover is generated by - 26% of national annual turnover in the ‘core’ motorsport activity - 4% is female part time Methods: - 19% of national employment in the ‘core’ a) Desk-based research to produce a matrix of the global b) exports represent 60% of motorsport generated - 70% of employment is classified as in a ‘motorsport geography of motorsport production. turnover. - had experienced a 523% growth in average annual • The top three export markets listed by all firms involved engineering discipline’ b) A postal survey of the motorsport engineering industry. turnover between 1990-2000 in motorsport engineering are: • 75% of firms have been established within the past 20 years - had experienced a 227% growth in average The survey method included: Europe 61% • 39% of motorsport engineering companies stated that employment between 1990-2000 - The compilation of a motorsport engineering industry The Americas 21% they experienced recruitment difficulties; of which, 73% list Asia and Pacific 15% stated that local training was insufficient

- A number of industry listings (including privately held • Overall, 44% stated that local training was insufficient • The remainder of surveyed motorsport engineering lists) were accessed and combined to produce a survey • Estimated total UK employment generated by for their needs firms: motorsport engineering activity is approximately population of 2573 entries • 59% of companies had a web site in place 25,000 persons. - had experienced a 35% growth in average annual • 31% of companies buy and/or sell over the Internet - Postal survey and ‘chase’ telephone call of the whole • This figure equates to: turnover between 1990-2000 survey population - Total UK employment of approximately 20,800 persons generated by motorsport activity in ‘core’ motorsport - had experienced a 20% growth in average employment - Survey response rate achieved was 19% engineering companies between 1990-2000 (ie. 418 usable returns) - Total UK employment of approximately 4,200 persons generated by motorsport activity in ‘non-motorsport’ - ‘Gone aways’ were high at 15% (381 entries) engineering companies

2 These statistics are based on 243 responses 3 All turnover figures quoted in this document are unadjusted for inflation SECTION SECTION 2 2 PAGE 10 PAGE 11

2.4 The Global Geography Of Motorsport Production 2.4 The Global Geography Of Motorsport 2.6 Conclusions Production Table 1 - The Premier Tier • The UK motorsport engineering cluster is a world-class • See tables on facing page for: example of high technology, low volume, BRITAIN ITALY FRANCE GERMANY USA JAPAN manufacturing Population (m) 60 58 59 82 275 127 - Table 1 - The Premier Tier Number of 17 10 12 7 1200 21 - Table 2 - Emerging Markets • Around 70% of the industry is located within the four circuits (incl ovals) Number of 34,000 22,000 25,000 10,000 385,000 n/a Regional Development Agency boundaries of AWM, licences (incl ovals) EEDA, EMDA and SEEDA that together comprise ASN MSA CSAI FFSA ADAC USAC, CART JAF 2.5 Opportunities and Threats Motorsport Valley controlling body NASCAR, SCCA Major BTCC, F3, F3000, ESTC, Le Mans, F3 DTM, F3 NASCAR F. Nippon Opportunities • The sector has experienced major, and sustained, championships EFPA, GT, Karting National Rally Porsche CART F3 growth in both turnover and employment over the National Rally Supercup IRL, ALMS GT • The major opportunities identified by core motorsport Industry Infrastructure Aerodynamics Engines Saloons Ovals, V8’s Engines engineering companies were: past decade specialism aerodynamics wheels, karting Rallying sportscars spectators! Rallying Markets World World Europe World N. America World - New markets (USA, Far East) • Over two-thirds of employment is based within Key Firms See MIA Ferrari Renault AMG Roush Dome - The Internet engineering disciplines and is heavily dominated by full Dallara Martini Porsche Yates TOMS - Developing new product areas time male employment. . Tatuus Mygale BMW Panoz Ralli Art Strengths - Developing grass roots motorsport • A significant level of this employment is generated by Weaknesses Threats Opportunities motorsport derived activity within a broad range of Threats • The major threats identified by core motorsport manufacturing companies Very Strong Strong Good Poor Weak engineering companies can be split in to two distinct • The sector comprises: groups: Table 2 - Emerging Markets ‘Macro’ - a top 50 set of world-class companies that have MEXICO BRAZIL ARGENTINA CHINA MALAYSIA SOUTH AFRICA experienced rapid growth in turnover and employment - Global recession Population (m) 100 170 37 1,265 23 43 - Red tape - an engineering base of 1000+ companies that has Number of circuits 14 12 33 (incl, temp?) 1 3 7 Number of licences n/a 3000 800 n/a n/a 6000 - Strong pound/Euro experienced modest employment growth with minor ASN OMDAI CBA ACA CMSA AAM MSA - Price of fuel real increases in turnover Major F. de las Americas Sudam F3 Sudam F3 F. Renault Asian Festival Formula Gti championships F3 Mexico Stock Car (with Brasil) F. Campus of Speed VSP ‘Industry level’ • A significant minority of firms view local training as Ford Mustang F Chevrolet TC2000 Renault Stock Car insufficient. This figure increases substantially amongst Chrysler, Neon Spyder - OEM’s strategy moving away from motorsport the two-fifths of firms who have experienced Industry None None None None Finance None - MSA/political infighting specialism recruitment difficulties Markets Domestic S. America S. America Domestic Asian Domestic - Too many racing series: too few competitors Key Firms Not Known Techspeed Berta Not known Not known Autoquip, ATS - Environmental concerns • The Motorsport Valley cluster is the premier world Strengths - Cheap motorsport imports and overseas competition centre of excellence. Globalisation and growth within Weaknesses Opportunities - F1’s dominance of the industry the motorsport industry highlights both opportunities Threats for, and threats to, this cluster. Very Strong Strong Good Poor Weak SECTION 3 SECTION 3 PAGE 12 PAGE 13

3.0 MOTORSPORT SERVICES: • Note that in the ‘core’ 3.3 Core motorsport services: an economic 3.5 Conclusions A UK PERSPECTIVE a) an average of 90% of annual turnover is generated by profile •The motorsport services sector provides a wide variety motorsport activity • It is estimated that core motorsport services companies of services at all levels including; b) exports represented 25% of total turnover in the UK number in excess of 1000 in total 3.1 Research Body: - The oxygen of sponsorship; which includes TV, the Henley Management College, Centre for Automotive c) approximately 11% reported that the majority of their • Average annual turnover in 2000 is £1,100,000 media including journals, advertising and other media Studies turnover was generated overseas - which has increased from £170,000 in 1990 related activities • Respondents exported to a total of 38 different countries • The average number of employees per company is - Competition events, circuit activities, racing driver Aims: including The Americas, Europe and the Middle East. - To provide a definitive statistical statement on the scale approximately 25 people schools, the race / rally Formula management and scope of UK motorsport services • 22% of the companies surveyed had been trading for organisations, the impact of events on the local • The three leading export markets were economy of hospitality, expenditure on travel, ticket - To quantify and understand the contribution of more than 20 years -United States of America sales and other related activities motorsport services to the UK economy and its’ regions • 47% of the companies surveyed had been trading for (more than 25% of the survey) - To provide an analysis of current trends and future less than 10 years - such as insurance, banking and , travel and employment agencies, scenarios -France • 25% of the respondent companies reported motorsport art, sellers and merchandise Methods: -Germany recruitment difficulties A postal survey of the motorsport services industry. • The top 20 respondent motorsport services companies Employment accounted for : •There are a number of unresolved issues arising out of The survey method included: • Estimated total UK employment generated by - 50% of the turnover generated the survey which are as follows: motorsport services activity is approximately 13,500 - had experienced approximately 25% annual - Compilation of a motorsport services industry list growth in turnover since 1990 a) The validity of the statistical sample and therefore the - A number of industry listings (including privately held • This figure equates to: - had experienced an average annual growth in accuracy of our estimates of total revenue and employment of 12% since 1990 employment, within this module lists) were accessed and combined to produce a survey - Total UK employment of approximately 6,500 population of 1757 entries generated by motorsport activity in ‘core’ motorsport • The top 50 respondent motorsport services b) The fact that we have had to estimate the statistics, companies accounted for : - Postal survey of the whole survey population service companies revenues or details of a number of important companies and businesses in the sector including; - Survey response rate achieved was 11% - Total UK employment of approximately 7000 generated - 60% of the turnover generated - had experienced approximately 25% annual (170 usable returns) by motorsport activity in ‘non-motorsport’ service - Formula One Administration growth in turnover since 1990 companies - ‘Gone aways’ were 10% (181 entries) - had experienced an average annual growth in - Formula One Management employment of 12% since 1990 Of this, approximately 3.2 The economic contribution of all - rights and sponsorship agreements - 60% full time and 40% part time motorsport services to the UK economy 3.4 Opportunities and Threats c) The economic multiplier of the races and events that - 65% male occur around the country and add to the economic Opportunities: • The turnover value of motorsport services is estimated activity in the local environment - 35% female • Increasing interest of major global corporate sponsors at approximately £1.4 to £1.7 billion. • New formulae including increased global exposure d) As stated in the book Britain’s Winning Formula of rallying • This figure equates to: • Since 1990 in the motorsport services sector: “To concentrate upon the contribution of service • Increasing globalisation of the sport at all levels industries, such as these, towards employment is to - £0.7 billion of annual turnover generated by motorsport - turnover has grown from approximately £290 million • Classic events and related ‘nostalgia’ miss their true importance. Their short, and long term, activity in ‘core’ motorsport service companies (where to over £1.6 billion advantages are the high values added, technologically ‘core’ turnover is where more than 50% is generated by • Merchandising at all levels - the level of employment has grown from 7,000 to advanced knowledge, specialised services, the growth motorsport activity) Threats: over 13,500 • Business recession affecting corporate advertising potential and export contribution of these industries to - £0.7 to £0.1 billion of annual turnover generated by • Global competition from companies related to say nothing of unknown future technological motorsport activity in ‘non-motorsport’ service ‘corporate giants’ transfers.” companies (where less than 50% of turnover is • Apathy to motorsport generated by motorsport activity). • Diminishing spectators at national events SECTION SECTION 4 4 PAGE 14 PAGE 15

4.0 BEST PRACTICE: UK MOTORSPORT to produce single figures of realistic candidates. 4.3 Constraints and Threats Facing the Case • Threat: we fail to recognise the mutual dependence CASE STUDIES Locating within the Motorsport Valley cluster Study Firms between performance engineering and service sectors significantly improves this opportunity. For performance engineering firms, the Motorsport Valley - Whilst the turnover of skilled labour can be costly, a • Poaching of Labour 4.1 Research Body: network is the basis of the production process. For certain level is recognised to be necessary in order to Cranfield School of Management motorsport service firms the Motorsport Valley network prevent the organisation from stagnating. - The benefit of being located in Motorsport Valley is offset by the problem of losing skilled employees to provides the ability to develop trust and the business Aims: • High technology as practical problem solving other firms in the sector. Some respond by trying to relationships needed to operate in this highly specialized - To generate a series of ‘Best Practice’ attributes that reduce the number of people who are motorsport context. characterise the UK motorsport industry - The constant pressure for increased performance creates enthusiasts; others by locating themselves on the • Threat: we fail to recognise the role of the smaller firms ever-more radical and the use of advanced periphery of the Valley. in Motorsport Valley in creating the ladder of talent on Methods: materials. Leading edge technology requires all aspects which the Formula One and World Rally teams depend - A series of 12 firm case studies drawn from the of the engineering process to continually interact in - Firms are increasingly entering into formal agreements motorsport industry. Case study firms were selected with suppliers and customers, in order to recognise this order to create the optimum outcome. Whilst there is criticism that the Formula One and World by the research steering group on the basis that they issue more explicitly in their relationships with other - Whilst many firms, in other industries, would see Rally teams draw off skilled labour, we observe a situation provided examples of leading edge firms in a variety firms. of sectors covered by the engineering and services Research, Development and Innovation as separate of mutual dependence where the 'base' of firms in Motor surveys. activities, for these firms it is taken for granted as an • Restrictions on Labour Hours Sport Valley draw in high quality labour attracted by the integral part of the day to day routine. pull of the F1 teams and develop their skills 'on the job'. The case study method included: - The implications of the European Community directive, The F1 teams then pull through from this pool. The - The generation of innovative ideas is not considered a on the number of hours in the working week, has significance of this is that the leading teams rely on the - Collation, review and summary of published material on problem; the challenge is to develop innovative ideas particular implications for an industry that works to continual development of this 'pre-selected' pool, just as case study firms. that work in competition. very tight deadlines and with highly specialised labour, the other firms rely on the lure of these teams to attract - Semi-structured interviews with case study firm • Balancing growth and unique expertise which is very difficult to increase or substitute. higher quality applicants than equivalent engineering or representatives (generally CEO/MD level). • Future viability of the motorsport industry in the UK service firms may enjoy. Both groups are therefore critical - There is a clear awareness that growth has to be to this continual process which develops talent and skills. 4.2 Key aspects of best practice within the undertaken without diluting the level of expertise, by - Many case study firms commented on the cyclical UK motorsport sector bringing in too many new employees at any one time. nature of this industry. This included both different motorsport formulae growing and declining at different - There is a recognition that the clarity and flexibility • A Network of Relationships points, and inward investment levels from automotive 4.5 Case Study Participants enjoyed as a smaller organisation must be retained in manufacturers moving through cycles of growth and - Firms develop long-term ties with customers, key order to remain competitive. This requires the decline. 1 B3 Technologies supplier groups and other strategic partners. establishment of more formal processes, and the development of managerial skills, in order to maintain 2 Brands Hatch Leisure Group - These relationships are used to build client relationships, - A related issue was concern over exchange rates in the the quality of communication. develop know-how, innovate and to access skilled UK, and the threats these posed for many of the firms 3 Cosworth Racing who relied heavily on exporting and overseas earnings. labour (see below). • Balancing passion with professionalism 4 T.L. Clowes - Firms are also focusing on working more closely with 4.4 Concluding Observations including Threats - Whilst all the firms recognise the value of the 5 CSS Stellar partners in terms of the movement of labour and the enthusiasm which motorsport generates, they also • Threat: we fail to understand the particular distinctive development of integrated communication programmes. 6 Ford Motor Company recognise that it is important to balance this with a qualities that makes motorsport unique and dominant in - Whilst many of the relationships occur within the more professional business perspective. its sector 7 Hewlett Packard cluster, these networks appear to becoming increasingly - The need for further funding and investment means that 8 Lola Cars International The characteristics drawn from these best practice case international. firms have begun to move onto a more long-term, professional, business footing than that which sufficed studies underline the distinctive nature of the motorsport 9 MIRA • Accessing the Pool of Talent industry from its related areas of automotive and aerospace. in the past. 10 Pi Technology It differs from automotive in terms of the highly integrated - Whilst in other industries a firm might expect tens, if not and interactive nature of the design and production 11 Ray Mallock Limited (RML) hundreds, of reasonable applicants, this sector is likely process; it differs from aerospace in terms of the focus on 12 Xtrac challenging deadlines and high levels of flexibility. SECTION SECTION 5 5 PAGE 16 PAGE 17

5.0 UK MOTORSPORT PARTICIPATION • Top three national newspapers read: 5.4 A set of highly committed participants 5.5 Future participation in motorsport - Sunday Times 17% • On average, respondents spend 46% of their leisure - Daily 15% • When compared with their expenditure over the past 5.1 Research Body: time on motorsport related activity Sports Marketing Surveys - Daily Telegraph 15% twelve months, 17% of respondents expect their • Of this time spent, the majority of respondents spend • Top three motorsport publications read: expenditure to increase considerably and 34% expect Aims: approximately 55% preparing for competitions, and - To investigate a perceived decline in domestic - Motoring News 44% 45% competing at venues expenditure to increase slightly, over the next twelve motorsport participation - Autosport 37% months • On average, respondents had competed in 7 MSA - Cars & Car Conversions 21% licensed events over the previous 12 months • Respondents anticipated competing in 10 events in the • 79% have Internet access and 75% have access to - To establish potential areas for the development of • Respondents have spent an average of £7505 on email coming year - a 43% increase UK motorsport participation in the future motorsport during the last twelve months • Top three sports participated in on a regular basis: (ie £1072 per event) • 21% of respondents said that they would definitely take

- Swimming 30% • On average, 40% of respondents’ expenditure is part in non-licensed events in the next twelve months, a Methods: - Football / Soccer 24% covered by sponsorship of any kind and 60% is self further 15% saying that this was very likely - National postal survey of current and lapsed Motor - Golf 20% financed • 19% of all respondents would be interested in Sport Association (MSA) competition licence holders. • Main driven: • 62% of respondents had taken part in non-licensed becoming an organising official compared with 16% - Ford 14% events in the last year who would be interested in becoming a marshal - Vauxhall 9% • On average, respondents had travelled a total distance - Peugeot 8% of 2466 miles to compete in competitions over the last The survey methods included: • 40% of respondents are interested in becoming twelve months 5.3 Moving in to, and out of, motorsport employed in motorsport, with a further 9% already • Postal survey of current licence holders. • On average, respondents would be prepared to travel a being employed in the industry - Population survey was 30,455 current licence • Of respondents maximum of 355 miles to compete in one UK event • Of those respondents who are already employed, or holders. - 37% were introduced to motorsport by a friend - Response rate achieved was 24% (7,779 returns) - 24% were introduced to motorsport by their parents Profile of current licence holder would like to be employed, in the motorsport industry - 8% were introduced to motorsport through track - ‘Gone aways’ were negligible - 54% said that they would consider formal training days or racing schools Vau • Postal survey of 2,500 recently lapsed licence holders d xha - 18% had already taken formal training • 63% had introduced a new competitor to motorsport For ll (ie. last 2 years) P eu - 20% had never thought about training before ge • Three quarters (79%) will definitely renew their licence o ss to e t - Results based on 100 responses Acce mail from the MSA next year • When asked what one thing they would change to

5.2 Sample profile • Non-renewal will occur due to: improve the competitive motorsport events in which

r r they take part, respondents were most likely to say The following profile is based on 2000 current licence - lack of funding (50%) Ma ied holders. These 2000 respondents were selected at random - reduced costs and entry fees (21%) - other commitments to leisure / work and personal from the post arriving each day. Aged 40 - better facilities (7%) activities (48%)

- longer race (7%)

p • Average age: 40 r a e r t n

l i h v t i i - cost of obtaining a licence (20%) n g

w - wider advertising / TV coverage amongst the • 95% male, 5% female general public (7%) • 57% married, 26% single, 13% living with partner, 5% divorced SECTION 5 PAGE 18

5.6 Accounting for lapses in licence holders 5.8 Opportunities for the future The Motorsport Industry Association commissioned and coordinated this survey, and wish to acknowledge the generosity of the following sponsors: The following results are based on 100 lapsed licence Increase the number of licence holders: holders. • Encourage more female licence holders • Only 5% of current licence holders were female compared to 15% of lapsed licence holders • Incentivise licencees to introduce new competitors

• Lapsed licence holders were twice as likely to have • Prevent lapses been introduced to motorsport by their parents than current licencees, suggesting that there may have been a - Offer advise on how to seek sponsorship and family rather than a personal interest funding • Lapses occurred because of : - Offer multi-year licences renewable by direct debit - work, leisure and personal commitments (61%) • Reduce the cost of competition Advantage West Midlands East Midland Development Agency Motor Sports Association - lack of funding (32%) - Increase one day events with less travel 3, Priestley Wharf, Holt Street, Aston Apex Court, City Link, Motor Sports House, Riverside Park - the cost of obtaining a licence (14%) Science Park, Birmingham, B7 4BN Nottingham,NG2 4LA Colnbrook, Slough, SL3 0HG - reduce costs of club level sports Tel: +44 (0) 121 380 3500 Tel: +44 (0) 115 988 8300 Tel: +44 (0) 175 376 5000 Fax: +44 (0) 121 380 3501 Fax: +44 (0) 115 853 3666 Fax: +44 (0) 175 368 2938 4 5.7 Conclusions e-mail: [email protected] e-mail: [email protected] e-mail: [email protected] Increase skill levels: web site: www.advantagewm.co.uk web site: www.emda.org.uk web site: www.msauk.org • Once introduced to motorsport, participants commit a large amount of time, effort and expenditure to the sport • Provide information on how to get more involved in - Nearly £250 million per year, of which 60% is self motorsport and the industry financed - Careers and training - Nearly half their leisure time is committed - Travel over 75 million miles annually to compete - How to become, and the benefits of becoming a Automotex Engineering and Marine Training Sports Marketing Surveys • Introductions to motorsport occur predominantly marshal or organising official 11, Manchester Square, London, W1M 5AB Authority The Courtyard, Wisley, through family and friends but few women currently Tel: +44 (0) 207 886 3116 2, Queen Annes Gate , Surrey, GU23 6QL participate Fax: +44 (0) 207 886 3101 Dartmouth Street, London, SW1H 9BP Tel: +44 (0) 193 235 0600 Commercial opportunities: e-mail: [email protected] Tel: +44 (0) 207 222 0464 Fax: +44 (0) 193 235 0375 - Over 18,000 participants had introduced a web site: www.automotex.co.uk Fax: +44 (0) 207 222 3004 e-mail: [email protected] competitor • Communicate with licence holders and motorsport fans e-mail: [email protected] web site: www.sportsmarketingsurveys.com - Only 1500 women are licence holders out of 30.000 web site: www.emta.org.uk via Internet and email – they are far more technical than • The majority of licence holders will renew their licence the general population in the coming year and expect to compete in greater numbers of events. Non-licensed event participation is • Increase promotion of motorsport events and TV growing. coverage amongst the general public Department of Trade and Industry Automotive Directorate Trade Partners UK - This would raise expenditure to over 151, Buckingham Palace Road, Invest • UK British Trade International £350 million in 2001 London, SW1 9SS 1, Victoria Street, London, SW1H 0ET Tay House, 300 Bath Street, • A significant number of respondents are interested in Tel: +44 (0) 207 215 5000 Tel: +44 (0) 207 215 2501 Glasgow, G2 4DX further participation in the sport, whether it be as a Fax: +44 (0) 207 215 1181 Fax: +44 (0) 207 215 5651 Tel: +44 (0) 207 215 5444 marshal, official or employment in the sector e-mail: [email protected] e-mail: [email protected] e-mail: [email protected] web site: www.invest.uk.com web site: www.tradepartners.gov.uk - 5,800 as officials; 4,500 as marshals web site: www.autoindustry.co.uk - Nearly 12,000 wish to be employed in motorsport • Around a quarter of respondents (8,000) were uncertain as to whether or not they would renew their licence • Respondents want to see a reduction in the cost of licences, competition fees and the cost of motorsport in general

4 These figures have been extended directly from the sample responses and the total survey module The aim of the MIA is to provide a service and give advice to companies in the industry, and promote and protect their interests. We also provide information, assistance and encouragement to our membership in all aspects of business development, particularly in export sales opportunities and in liaison with government. We promote the achievements of our members, and those of the industry, to the business and general media.

The MIA was founded in 1994 and now has over 200 members, who transact over £600 million of motorsport business worldwide

Motorsport Industry Association, Federation House, Stoneleigh Park, Warwickshire, CV8 2RF, UK Tel: +44 (0) 24 7669 2600 • Fax: +44 (0) 24 7669 2601 email: [email protected] web site: www.the-mia.com