JANUARY 15, 2008
Why F1 is not impossible for David Richards
Prodrive boss David Richards says that starting a new Formula 1 these days is "virtually impossible". Richards blames "the new Concorde Agreement" which he says means that each team has to be a constructor. The investment necessary to get to a point where one can build an F1 car is very substantial - Richards says the barriers to entry are "horrendous" - and there is no real justification for such action if one is looking for a return on the investment, unless the F1 team is to be used for other purposes such as selling unrelated products like Red Bull has done with the old Jaguar Racing and Vijay Mallya is attempting to do with Force India. This does not mean that Richards is going to give up the ambition, which has long burned within him and led to stints as team principal of Benetton and then of British American Racing.
Formula 1 has never been easy and even if the amounts of money involved have risen constantly the ambitions of those who want to own F1 teams have not diminished. There are several courses of action still open to Prodrive: the company came close to raising the money needed to begin in F1 as a customer team and so could possibly be able to raise the money to buy an existing team at some point in the future, particularly if there comes a point at which the manufacturers start to leave the sport and wish to divest themselves of such operations. The other possibility is that Richards and his partners at Aston Martin can build up the business to such an extent that it would be able to consider an F1 programme at some point in the future as a marketing process for the cars. Aston Martin is a wonderful brand, which enjoys brand values that include high performance, exclusivity, luxury, style, design, a British kind of "class" and a little of the sense of adventure epitomised by the fictional Aston driver James Bond. It is a brand that has beauty, power, style and soul. It is very much a British version of Ferrari, albeit without such a rich racing heritage. This means it is down to good management to exploit the inate value that exists. Ford has done the hard work, investing in new models and production facilities but did not have the staying power to reap the benefits. Richards and his backers are well placed to do that.
There is no shortage of wealthy people in the world today and Aston Martin can benefit from the fact that Ferrari has to limit its sales to avoid ruining its exclusive image. Ferrari production creeps up each year and the company's move into merchandising and theme parks is a sign that the owners wish to make more of the brand without destroying its exclusivity.
Aston is doing well at the moment but it is clear that new models must follow in the years ahead and that is going to cost money but the option is for the company to fade as it has several times in the past. The key issue will remain the quality of the products but Porsche and Ferrari have both consistently proved that there is a place in the market for a well-run luxury car company and Richards is a smart enough man to know what needs to be done. If the development of the company is done well, the F1 option is an obvious move in a few years from now.
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