The Indian Formula 1 Grand Prix this December may not be a magnet for business, at least for the domestic composite industry in the short term.
About 35 per cent of the weight of the car is made up of carbon fibre composite, a form of high-grade plastic, that is three times stronger than steel. The sporting event, though, could help put local manufacturers on the map for the long run because of the low manufacturing costs.
Racing team's annual budget
A Formula 1 racing team's annual budget is estimated at about Rs 750 crore, of which, about 70 per cent goes in research, development and production of the car. Every year, a new car is developed by each team for the race. This year, 12 teams would be participating at the event, which is being held at the upcoming racing track at Greater Noida on December 11.
Mr Parag Rajda, Managing Director of Mumbai's Moldex Composites, a supplier of components to Formula 1, says advanced composites components required for the cars are hand-made.
“The parts of the F1 car cannot be made by the machines and this is where the opportunity lies for Indian companies. In Europe for an hour labour cost is about Rs 1,500 to Rs 4,400, while in India it is about Rs 150. Therefore, in India, it will work out much cheaper for Formula 1 racing teams to develop required parts,” he said.
Mr Yohann Setna, Manager to Mr Narain Karthikeyan and an expert on motor sports, said, “An F1 event in India does not mean that Indian companies will bag orders. It will only happen when professional motor racing as a sport will pick up pace in the country. The synergy between racing circuit and composite industry will happen when there is local interest in motor sports.”
“Today, the gains out of F1 racing coming to Indian companies are intangible. The Grand Prix is like a TV advertisement, it will not bring sales next day. But over a period of time it will surely brings new business,” Mr Rajda said.
Viewers
According to him there are about 300 million TV viewers of F1 race worldwide and if India manages to put up a good show and an excellent racing track, then the racing teams and their sponsors will be convinced of Indian companies' technical capabilities.
Mr Dananjay Dodtumkur, Vice-President at Kineco -a Goa-based maker of composite components including chassis for cars used in Formula racing, said, “There would be no immediate big orders from F1 teams except for ‘tooling', which is an intermediary stage for making a carbon fibre component. There could also be some small requirement for common spares required by all teams,” he said.
Today, composites industry is where Infosys and TCS were 25 years ago. The basic concept between the two sectors is same — outsourcing of labour. About 40 to 50 per cent of the cost of a component is spent on labour, “We can do it at a fraction of the cost,” Mr Rajda said.
Chinese cos
Chinese companies have tried making components for F1 racing, but they have not been successful. They faced difficulties in understanding the engineering concepts due to the language barrier. Reliability and trustworthiness was also an issue, some teams have said in the past that they don't trust the Chinese composites makers as they fear that their designs and other intellectual property could be sold to third parties, he said.