New life Aid for the Indian Industries

As I wrote in my last blog, Indian industries is getting left their sponsorship from the Indian Cricket. Now we need to understand what will be the new market for Indian industries.

The answer is "Formula 1" sport.

India's Hero automotive group is the latest business house to join the list of corporate sponsors backing Indian Formula 1 Grand Prix race. Hero Group would sponsor driver Narain Karthikeyan and the Hispania Racing Team in the October 30 race.

The event's man sponsor is telecom giant Bharti Airtel, part of the Sunil B. Mittal's Bharti Group.

Karthikeyan will carry the weight of expectations of million of Indian F1 fans. Another indian driver is Karun Chandok, who is a reserve for Lotus-Renault team and may get a start. He drove in the German GP earlier this year, but like Karthikeyan has no championship point.

The Indian business house with the highest exposure to the F1 race is Vijay Mallya’s UB Group, which promotes its Kingfisher beer, aviation and lifestyle brand via Mallya’s long-standing interest in sports.

Mallya, a flamboyant billionaire known as “the king of good times” set up his Force India F1 team in 2007 when he bought the former Spyker F1 team for 88 million euros

($117 million) in partnership with Michael Mol, the Spyker F1 director. The team, which runs on Mercedes-Benz engines, has scored 32 points so far this year through drivers Adrian Sutil and Paul di Resta, to rank seventh in the constructors’ championship.

Some of the Indian business houses including Tata and Mukesh Ambani’s Reliance Industries also are involved in F1 sponsorship. The Mahindra group, which makes everything from SUVs to two-wheelers, tractors and heavy trucks, has a team entered in this year’s MotoGP motorcycle series, and would like nothing better than to have an Indian MotoGP race at the Buddh circuit next year.

The centrepiece of the attraction would be the track with capacity of 120,000 people at the Jaypee Greens Sports City which was designed for real estate development.

The biggest investor in the race is the Gaur family, via its Jaypee Group. In addition to the $400 million racetrack that sits alongside the group’s new Yamuna Expressway from New Delhi, the Gaurs have built a 1000-hectare “sports city” made up of luxury apartments, a golf course, a 100,000-seat cricket stadium, hockey ground, training academy and other sports facilities.

In 2009, Jaypee Group signed a 10-year deal with the controlling body for F1 racing, the Federation Internationale de l’Automobile (FIA), to build the circuit and conduct the event. Last year, the FIA approved the addition of an Indian Grand Prix to the 2011 F1 calendar. The track was designed by German architect Herman Tilke, who has been responsible for a number of new F1 circuits around the world.

The event is expected to attract a large TV audience and organisers are confident of a full house of 120,000 spectators on the main race day, even with the relatively high entry prices. Tickets for the event went on sale on August 20, in a price range of 2500 to 35,000 rupees. A full house is worth about $26 million in ticket revenue.

Per the expectations of the Indian Industry, this is the time to watch the new area of marketing to set up their brand on the global forum.