It is a big week for the automobile in China, with the 14th annual Beijing International Automotive Exhibition. There is a lot of news coming out of China at the moment in this respect, notably in connection with electric cars, but it is perhaps worth noting an unusual announcement last week when the oil company Royal Dutch Shell unveiled a concept car, a week before the show opened. An oil company building cars? Is that strange in a world where several Internet search engines are planning automobiles? The first thing to say is that Shell, a Ferrari sponsor, is not planning to manufacture these devices but built the car to draw attention to the fact that there is still a lot of life in the high-efficiency petrol-burning cars, particularly those with hybrid bits and bobs. Shell believes that it will be many years before all these electric vehicles will make much impact on global emissions and that developing conventional machinery is just as important as pouring money into new-energy vehicles. The fact that this was done in China is probably a message to the government there, which is heavily promoting alternative energy vehicles through subsidies and other incentives. This is a message that F1 should be delivering, if it was capable of delivering any message, other than the people running it are greedy and don’t give a toss about anything but money.
One thing I noticed at the Formula E race in Paris was that there will soon be two Chinese-owned teams (and, oddly, Dragon Racing is not one of them). The original Team China Racing, which competed in the 2014-2015 season, has since been taken over by NextEv TCR, a Chinese start-up, which has $1 billion behind it. This is aiming to take on Tesla in the electric car market and is being overseen by well known petrolhead Martin Leach. The former President of Ford Europe was CEO of Maserati but departed when Fiat decided to align the brand with Alfa Romeo. Later he came close to buying the Super Aguri F1 team, which would probably have been a good investment if it had gone ahead.
Coincidentally, Aguri Suzuki’s Formula E team is being sold at the moment and the word is that it has been bought by Chinese Media Capital (CMC), a private equity firm that was previously mentioned as a possible investor in the Formula One group. It decided not to do that and instead has invested in the promotion of the Formula E races in Beijing and Hong Kong. This is why Ma Qing Hua raced for Aguri in Paris. The word is that the team will buy the Renault Formula E powertrain next season and there are believed to be discussions going on about whether to brand it as one of Renault’s partners in China. The obvious choice would be Venucia, which was builds electric cars (with Nissan Leaf technology) for Renault partner Dongfeng.
The Chinese have plenty of money at the moment and therefore it is interesting to ask why they are buying into Formula E when they might be able to acquire F1 teams. It seems that the answer to this question is in the state of the sport at the moment. The technology is obviously interesting but the politics and demographics are not.
But, you never know, there could be a Chinese buyer out there if the deal is right and while Sauber is busy looking for support, it is likely that Force India will soon be in a similar position. The team can only operate if there is enough money and while there is funding from Diageo, Sergio Perez’s backers and from the F1 prize funds, this is probably not sufficient to allow the team to run competitively without further injections of capital. The fact that the team has given so much time this year to Alfonso Celis Jr would seem to suggest that he is providing some fairly hefty sums of money, given that his results are hardly a match for Stoffel Vandoorne. The team owners are in messes that do not seem to be getting any easier. Subrata Roy of the Sahara Group remains in jail in India, having failed for the last two years to raise the money to raise bail. The Supreme Court has now asked the market regulator to sell off the unencumbered assets of the Sahara Group, which is mainly real estate. Vijay Mallya, for his part, is holed up in a mansion in Hertfordshire, while the Indian authorities are trying to convince him that returning to India is a good option. He has consistently failed to appear before the Enforcement Directorate and an arrest warrant has now been issued. His diplomatic passport had been cancelled and work is beginning to extradite him to India. If that happens he can expect to be treated in much the same was as Roy has been. Mallya appears to have money and other assets all over the place and so he can go on funding the team. If India does request extradition it would do so by making a request to the Minister for Security and Immigration, James Brokenshire MP. He will decide whether to pursue the request and then the Crown Prosecution Service (CPS) would look into the case. A judge would then be asked to issue an arrest warrant and there would then be various hearings before a decision on extradition. There are, of course, appeals and so on and this means that the process could drag on, as wealthy men can always afford lawyers well-versed in stringing these things along or frightening off the CPS with costly arguments, while the Minister has the final say about any extradition.
Politicians are also currently playing important roles in a number of F1 races with The Hungarians having recently agreed a deal to extend the current F1 contract until 2026. This seems to be part of a process that the Formula One group is going through at the moment to put long term deals in place: this adds value to the balance sheets of the company and locks in promoters, who might otherwise decide to wait and see what happens with F1 politics… The government is believed to pay some of the fees for the race (although these things are never clear) and it is also responsible for the upgrading of the circuit. The Hungarian Minister for National Development Miklos Sesztak says that “substantial resources” for the development of the circuit have been written into the 2017 national budget because of the importance of the event. Things are not so simple in Italy where the regional government needs to pay up for upgrading work at Monza before a new contract can be signed, while in Germany there continue to be problems with the future because while Hockenheim has the money for a race every two years, the Nurburgring is still struggling. There is no real chance of public money because regional investment in the Ring resulted in a scandal that led to the resignation of the Rhineland state president Kurt Beck in 2013. Malu Dreyer, who replaced him, has recently won the local state elections and has a new coalition. This has agreed to increase spending on infrastructure and technology, but there is no sign that any of this money will go to help pay the Ring pay race fees.
Elsewhere, there are still possibilities for F1 in Long Beach as IndyCar is failing to deliver what the city wants. The recent Long Beach GP scored a TV rating of 0.37, which means that it was watched by about 460,000 people across the US. The show aired at 4.15pm on Sunday afternoon on the cable channel NBCSN. This was matched on the Saturday by a Premier League soccer game between Manchester United and Aston Villa, which was aired at 10.00am. The word is that the city council gave the most recent deal to IndyCar because they did not like some of Bernie Ecclestone’s must-publicised opinions about various things, but if they want their motor race to make sense, they may need to bite their tongues and find the money.