Published September 28, 2009

MALAYSIA INSIGHT

Stakes are high for Lotus F1

By PAULINE NG
KL CORRESPONDENT

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IT'S an audacious idea that still attracts fierce debate. Not surprisingly, the plan bears the hallmark of maverick tycoon Tony Fernandes who, with his best buddy and AirAsia partner Kamarudin Meranun, has convinced other private sector individuals and the government to pitch in.

But launching a Malaysian-owned F1 team when other established entities such as Honda and BMW are seen fit to quit?

The AirAsia duo are convinced the opportunity is there and the timing right. And because Malaysia already has an F1 track, it will be better utilised, while at the same time allowing for the development of design and engineering skills and the rest that goes with making F1 a commercial enterprise.

Incidentally, that was much the same argument for the birth of Proton. The national car project was to serve as the nucleus attracting a cluster of supporting industries so that Malaysia's design and engineering skills could be developed.

Some local parts and component players have benefited and today are globally competitive. But even after more than two decades, the same can't be said of Proton.

It is through Lotus - Proton's subsidiary - that the government intends to collaborate in the F1 project, in the belief that the teamwork would enhance the spirit of 1Malaysia while augmenting the nation's global exposure. Lotus's success could also rub off on Proton.

In terms of annual budgets, teams reportedly spent a sum ranging from US$45 million to 10 times more last year, although the FIA has since capped the expenditure for 2010 at £pounds;40 million (S$90.7 million) so as to better level the playing field.

The Lotus F1 team will have founding capital of RM168 million (S$68.5 million) while the base annual expenditure for the team is estimated at RM308 million. The government will also not hold any equity in the project, its participation is through the licensing of Lotus technology and brandname to the team.

National oil company Petronas - a current sponsor of the BMW-Sauber team will be invited to participate - as would other Malaysian big names such as Malaysia Airlines and Genting. Given the government's participation in the project, these firms are likely to oblige.

What is less certain is the footing of the costs for the establishment of a team headquarters at the Sepang International Circuit and the testing facilities such as wind tunnel and the like which could amount to hundreds of millions if not a billion ringgit.

Going by comments in the press and especially blogosphere, most are scornful that the returns would be worth the amounts needed to compete at the pinnacle of motor-sports racing.

The benefits of such a project are less tangible as opposed to better public transport or infrastructure in, say, East Malaysia's rural areas where kids walk hours to get to school. To many, it is another prestige project that the country can do without, especially when so many other areas need improvements. The number of failed infrastructure projects amounting to billions of ringgit over the years has also fuelled public scepticism.

Although no one expects the team to make in-roads in the first few races, there is another fear: that of the team getting lapped and limping home race after race, which brand specialists have stressed would be deleterious for Lotus and Proton.

This will not have been lost on brand guru Mr Fernandes. Indeed supporters of the project cite his involvement as reason for optimism, given that he overcame far greater odds with AirAsia.

A risk taker who believes in living his dreams without regrets, the perpetual optimist - and now Lotus F1 team principal - has emerged as one of Malaysia's biggest cheerleaders.

'What keeps me up (at night) is that as Malaysians, we focus on the negative. We focus on bringing people down rather than praising success,' he said recently in an interview with Malaysia Business.

For multi-racial Malaysia, sports have always been a great unifier. But the stakes will undoubtedly be that much higher next year when the Lotus F1 car takes to the starting grid.