What Audi and Porsche have to gain by joining Formula 1

They could also win hundreds of millions of dollars in prize money. Around 47.5% of F1’s profits make up the prize money, which is then split into two categories: half goes to F1 and its shareholders; half goes to the teams, who distribute it according to the final ranking of the year.

“Sport in North America [is] under-seen, under-monetised, under-everything,” said Greg Maffei, president and chief executive of F1-owner Liberty Media. it’s a long-term opportunity.”

Risky bet on a marketing goldmine

There are risks in joining F1, especially for Porsche, which built its brand image on the racing cars and brave rallies of the 1960s, 1970s and 1980s. For VW power brokers, the old adage “win on sunday, sell on monday” is always true. (Cars that win races instill in consumers a favorable view of their brands and make people want to drive the legal cousins ​​of winning cars.)

“We assume that in 2026 or 2028 Formula 1 will be the biggest motorsport spectacle in the world – even more so than today – bigger in China, bigger in the United States,” Diess said. “And with that, also the biggest marketing platform for premium vehicles.”

But “winning” is the operational word.

For Porsche, which has had mixed results in Formula E and only occasionally races in lesser-known series like Le Mans, entering F1 but doing poorly could potentially damage the image of the most profitable marque in the world. VW group. Porsche built its appeal on the back of a highly successful (non-F1) racing car, the 911. As Porsche’s most profitable vehicle, the 911 contributes 11% of Porsche sales by volume while representing around 30% of the profits.

Aston Martin, for example, has suffered this season as its drivers continue to finish at the back of the field. While the company also faces other headwinds, such as a disappointing IPO and subsequent churning from senior management, the fact that the British brand is currently ranked ninth out of 10 teams does not help morale. loyal fans, nor gain new ones for the brand. .

On May 4, Aston Martin Lagonda appointed former Ferrari boss Amedeo Felisa as chief executive. Felisa immediately replaced Tobias Moers, who joined the company in 2020 from Mercedes-Benz’s high-performance AMG brand. Rumors have been swirling for months that Aston Martin chairman Lawrence Stroll is looking to sell the automaker’s racing team.

A proven record

Ferrari provides the benchmark case study for F1 power. It’s been the world’s strongest brand across all categories for nearly a decade, according to the annual Brand Ranking Report that balances the metrics dashboard assessing marketing investment, party equity stakeholders and business performance.

Ferrari builds just over 11,000 cars a year, but trades on a gargantuan footprint of loyalty, heritage and a winning tradition largely bolstered by its longstanding involvement in F1. Cumulatively, the Italian supercar maker and racing team are worth more than $27 billion.

“The epitome of luxury, Ferrari continues to be admired and desired around the world,” wrote David Haigh, CEO of Brand Finance. “It’s no wonder that many consumers, who may never own a Ferrari car, want a Prancing Horse bag or watch.”

The success of Ferrari’s racing cars on the track in the 1950s and 1960s built the fame and reputation that fueled the appetite for the brand’s popular early road cars; its million-dollar icons such as the F40 have drawn close parallels to the racing cars of the 1980s. Its fans, known as Tifosi, are the most notorious force behind any F1 team on the planet . In 2017, one in three F1 fans described themselves as a Ferrari supporter, according to a 2021 F1 fan survey.

The caveat is that on the world’s most famous racetrack, you have to win to stay popular and feel like you’re getting your money’s worth with the over $145 million budget required to field a team.

In the years after 2017, Ferrari lost its competitive racing pace and lacked the star power of a driver such as Mercedes’ Lewis Hamilton. It’s no coincidence that just 18% – less than one in five – of racing fans last year still described themselves as brand supporters. (Ferrari street car sales have nonetheless increased.) Careful observers might see an increase in popularity after this year: Ferrari currently sits first in the manufacturer team rankings.

Sell ​​electric in 2026

There’s also the question of how participating in an old fossil-fuel racing series could help sell electric vehicles, which Audi and Porsche have pledged to sell widely. The brands have carefully timed each movement. A rule change states that by 2026 all F1 racing cars will have new engines that are more electrified and run on synthetic fuel.

The adjustment levels the playing field for any brands that might want to enter the series. All will be building engines to comply with the rule change.

“You can’t get into Formula 1 unless a technology window opens, which means, to get in there, a rule change so everyone starts from the same place,” Diess said.

It was unclear whether ownership of Rimac, a Croatian battery supplier and automaker, might play a role in Porsche’s moves to develop the technology for itself or others in the series. A Porsche spokesman declined to say whether a change to F1 meant Porsche would pull out of Formula E.

Diess, for his part, was more blunt: “It’s really only Formula 1 that matters,” Diess said. “If you do motorsport, you should do Formula 1 because that’s where the impact is the biggest.

Comments are closed.