The 100 million dollar question
The old adage goes, money can't buy you success. Well, it can get you pretty damn near, especially in the fiscally-governed world of Formula One. What exactly does the Sahara India Group's infusion of $100 million (Rs491 crore) into the Vijay Mallaya-owned Force India mean and will it reap immediate dividends?india Updated: Oct 16, 2011 18:18 IST
The old adage goes, money can't buy you success. Well, it can get you pretty damn near, especially in the fiscally-governed world of Formula One. What exactly does the Sahara India Group's infusion of $100 million (Rs491 crore) into the Vijay Mallaya-owned Force India mean and will it reap immediate dividends?
According to Business Book GP, the average cost of operating an F1 team for the 2010 season was at $176 million (Rs846 crore), Ferrari being the biggest spenders with an estimated budget of $295 million (Rs1,449 crore). The Prancing Horse finished last season third in the constructors standings with 292 points, with each point potentially costing the team $1 million, and yet even with that ratio they were one of the top-3 cost effective teams on the grid.
For many others teams it took tens of millions of dollars just to secure a point.
However, money isn't the only thing, it's how it is spent that's all important. Take the case of Japanese car manufacturers Toyota and Honda in the 2008 season. They were spending as much as Ferrari and McLaren but with just a fraction of success. Each point cost Toyota $34 million, while for Honda it was an even steeper $57 million.
Honda shut shop at the conclusion of that season, but all their money didn't go to waste, at least not entirely. Honda's research and development on the double diffuser was utilised by Brawn GP, which rose from the ashes of former Honda GP team, and proved to be the key component in their drivers and constructors title double.
Since the ban on engine development, earlier one of the biggest expenditures, following the 2007 season research on new technologies has often been the difference maker, with Red Bull's money spent on KERS a prime example. In the 2009 season the Austrian team spent $168 million (Rs825 crore) with $89 million (Rs437 crore) being spent on research. The results were there for all to see.
Mallaya also wants to follow a similar path with the fresh money that's been invested.
"It is a lot money and will be invested in research and development, technology upgradation, like upgrading our wind tunnel and new concepts and innovation which come from time to time like the KERS and the double diffuser," he said on Wednesday.
However, he has more pertinent issues to deal with, like utilising the money to retain some of his best hands. It is well-known 'secret' that he's lost many of his top staff, including chief technical officer Mike Gascoyne, design and technical director Mark Smith, Lewis Butler (chief designer) and Marianne Hinson (head of aerodynamics), to fellow aviator Tony Fernandes' Team Lotus.