Another big name joins Formula E. From 2023, McLaren will acquire the Mercedes EQ Formula E team and join the full-electric racing series. There have been several big names going through the championship already, with some pulling out and others coming in. However, it is the first time we are seeing top-end luxury brands, with strong links to motorsport, joining the series. Could these be the first signals of a more important change coming soon?

Not Just McLaren

Right from the first season in 2014, Formula E has seen brands like Renault, Audi, Nio, Jaguar, BMW, Mahindra, Mercedes, and Nissan. The 2019-2020 season saw Porsche joining. McLaren’s announcement follows the one of Maserati published at the beginning of the year, which also talked about this entry as an important opportunity to look at the future of motorsport and a platform for electric cars’ development.

Formula E has had a positive season in terms of the audience in 2021 with a strong recovery over the previous year, but things are not as easy as they look.

Formula E yearly audience and percentage increase (in millions)

First, the recovery comes from a difficult year, in which the sport was heavily affected by the pandemic with the championship starting late and holding only 11 races, with 6 in Germany. Secondly, as claimed by ABB Formula E the growth in 2021 is mostly driven by an increase in free-to-air distribution agreements in several different markets that lacked them before. As a result, countries like Germany, Italy, Brazil, UK, France, USA, and Indonesia saw significant audience growth.

So, while the growth could not be as impressive as it looks, another factor that has most likely limited it has been also the lack of races in Asia, which has been one of the most important stages for Formula E right from the first season.

Finally, another important point is the introduction from next year of the new Gen3 cars. They bring a new design, introduced recently during the Monaco E-Prix, which has sparked renewed interest. Most of all though, they bring another important power enhancement, up to 350 kW from the previous 250. Along with that, the cars will also be lighter, reach a higher top speed, and will be smaller and with a shorter wheelbase which should make them more agile. Overall the changes should translate into a significant performance improvement that will make racing more entertaining.

Formula E Different Generations Cars Spec

Next season will also see an important change in rules. For the first time, pit stops to recharge will be allowed thanks to the new batteries capable of receiving recharge up to 600 kW.

A look at McLaren

With this move, McLaren doubles down on its motorsport strategy expanding once more adding the single-seater electric car series to Formula 1, IndyCar, Extreme E, and the different e-sports series.

McLaren Racing CEO Zack Brown released a statement saying:

“McLaren Racing always seeks to compete against the best and on the leading edge of technology, providing our fans, partners, and people with new ways to be excited, entertained, and inspired. Formula E, like all our racing series, fulfils all those criteria.”

This is important for McLaren’s marketing looking at the future. McLaren enjoys one of the strongest followings on social media, especially thanks to its F1-related reports Unboxed which still proves a winning formula thanks, especially, to the popularity of its drivers’ line-up Lando Norris and Daniel Ricciardo. More diversification will ensure a better reach and potential new audience, especially among the younger fans.

That is not all though. Formula E could be key also from the firm development perspective as it gives another opportunity to further develop EV racing capabilities, after the Extreme E series. The British manufacturer has in fact, like the rest of the segment, started its transition to electrification from the first hybrid model, the entry-level supercar Artura, which entered production and with the first deliveries scheduled for the end of Q2 2022. However, things have been far from simple since the start of the pandemic, and a deep dive into EV motorsports could give McLaren an edge over its competitors in the coming years.

2021 saw a partial recovery from the bad results of 2020, but still very far from the pre-pandemic levels, and the start of 2022 has not been positive as well.

McLaren Full Year and Q1 Sales (2016 - 2021, Q1 2017 - Q1 2022)

Sales in the first quarter of 2022 have been the lowest in 6 years. Naturally, part of this was caused but the difficulties faced by the entire industry. From the aftermath of the pandemic to the chip shortage that is causing severe supply chain disruption for many OEMs. All these factors ultimately caused the delay in production for Artura.

Financial results too have not been really encouraging, with lower revenues and negative EBITDA. In this respect, additional investment dedicated to Formula E could prove a significant burden for the company, but at the same time, the Formula 1 budget cap introduced in 2022 has likely left room for different opportunities for all the companies involved, and also both budget and workforce to redistribute in other motorsport or business functions.

In conclusion, even with Formula 1 budget cap freeing resources, the financial risk is significant for the British automaker that also sold its applied technology division in 2021. Nonetheless, the entry into Formula E could be important for a number of reasons.

A lot will depend on Formula E’s popularity in the coming years, especially with the crucial introduction of the new Gen3 cars. While the sport’s popularity has been recovering from 2020’s difficult season, and new promotional deals are being arranged, it is not yet certain whether this series has already what it takes to become an established reality like other motorsport series.

*Formula E Gen 3 presentation photo

Regardless, by acquiring the Mercedes EQ team, McLaren gets access to a strong team that has already succeeded in 2021 and is currently leading the ongoing championship. If this success will continue under the new ownership it could become another important marketing platform for the brand. Especially by looking at a future of motorsport (probably still quite far) in which EVs will become faster and thus more challenging and attractive than internal combustion engine cars.  

Lastly, even the luxury automotive segment moves relentlessly toward full electrification, and having a strong presence in different related racing series, offers a big opportunity from both a promotional and more importantly a technical development point of view.

The discussion around gender equality has rightfully become central in every field today, whether it is sport, entertainment, or business. Naturally, in those environments that are still mostly male-led, there is a strong cultural component that is not going to change overnight. It certainly requires a gradual education, but it is definitely being helped by continued action ranging from companies governance to dedicated initiatives.

In the hope that celebrations like March 8^th International Women’s Day will soon be obsolete, here is an overview of the current status of women in the automotive industry.

Automotive in the 20s

While there has been significant improvement in the last few years, there is still a substantial disparity in several markets.

In the US, in 2020, women accounted only for 26.1% of the total workforce in automotive. A similar percentage is registered in dealers and goes significantly down for repair and maintenance. Where there is a serious difference though is in managerial and senior roles.

A research by USA Today found that in the American market, except for GM where Mary Barra has been serving as CEO since 2014 and where 6 out of 11 board members are women. All the other major OEMs include a maximum percentage that is never above 35% and is actually down to 0 for some like Korean Hyundai-Kia.

*Source: USA Today

An analogous situation regards the roles of executives as shown in the graph above where the definition includes positions as VP, equivalent or higher. A report by Deloitte from 2020 highlights the same imbalance among roles covered by women in the UK. Around 71% covers roles as employees or managers, while the percentage drops sharply as the seniority of the role increases, reaching just 1% for the board-level positions. Of this almost 30% work in marketing and sales while only 15% of the development and engineering roles are covered by women.

Women employment in automotive by Seniority Level

*Source: Deloitte

While the situation is improving, the issue, of course, does not seem to be just the hiring process, but also the talents’ retention. 40% of Deloitte’s surveyee claim they would change industry if they could start again, and up to 90% felt somewhat underrepresented in their work environment.

So, overall, issues with women’s representation in the automotive sector can be found at different levels. Not only with the hiring process but also when it comes to retention and career progression. Continued discussion to improve knowledge and overcome certain biases that are commonly present in the sector are solutions that can help to further improve the situation.

Luxury Automotive

Different luxury automakers are taking steps to ensure they provide a diverse environment that can offer the same opportunities to different groups whether it is race or gender.

*Both Ferrari and Lamborghini, as the other OEM apply an ‘Equal pay’ policy for men and women. But report differently from the British Companies
*Porsche too does not report a % in the gender pay gap, the one indicated is from Porsche Retail Group 

By looking at the improvements realised in these years, as well as the special programs and initiatives put in place by each automaker in the luxury space, it is evident how there are efforts being made to improve gender equality.

However, the other observation that emerges quite clearly from this table is the huge gap between men's and women's levels of employment. Which is even bigger as the seniority level increases. In this respect, the luxury segment reflects the same trend seen in the wider automotive industry.

This data reflects obviously on the Pay Gap. The British companies report according to the Gender Pay Gap Reporting Regulations required to employers with 250 or more employees in the UK. The percentages included in the table, in fact, indicate the difference in the means of the pay earned by all the men and women of each company. So, while the number does not imply a difference in compensation for the same role, it does reflect the lack of women figures in positions of high responsibility.

Even though these numbers are indications of how the industry is still vastly male-dominated whether it is for cultural reasons, or general interest in the sector, there are positive signs. Automotive may lag behind other sectors, but each company in its report highlights significant measurable improvements that accompany the educational and political initiatives.

Motorsport

In motorsport too steps are being taken by the most important sporting bodies like the FIA to promote gender diversity. But the road ahead is still long especially when it comes to high-profile competitions. One above all, Formula 1, that has not seen a female driver racing in over 40 years.

Two, in fact, are the only women that joined the sport and actually started a race. The Italians Maria Teresa de Filippis, and Lella Lombardi, who respectively started 3 races between 1958 and 1959, and 12 races between 1974 and 1976. After them, three more entered the sport, the last one another Italian, Giovanna Amati in 1992, but never took part in a race.

*From the left Maria Teresa de Filippis and Lella Lombardi

Automakers involved in motorsport are putting plans in place to improve women's condition in the sport. Ferrari supported FIA’s Girls on Track – Rising Stars Program. Already a year ago, it announced Maya Weug, who came on top in the FIA initiative, as the first female driver to enter the Ferrari Driver Academy (FDA). Later in 2021, Laura Camps Torras (16 years old) and Maria Germano Neto (11 years old) after winning the FIA competition joined the FDA as well, with the hope of reaching the Formula 4 championship.

The most high-profile initiative toward motorsport gender equality though is probably the W Series. An all-female Championship established in 2019 and structured to be as balanced as possible favouring the drivers’ talent.

W Series is quite revolutionary in many ways. Not only it is the first championship of its kind, but it is also free to enter. So, it manages to tear down both the political and financial barriers of motorsport at once. The twenty drivers race using the same car, a Tatuus F3 T-318 with an Alfa Romeo engine. During the first season, the engineers too were part of the same team. In 2021 instead (2020 was skipped due to the pandemic), different teams managed the drivers’ pairing.

This of course is not the only initiative. 2022 could see the return of the Formula Woman, a series that was held from 2004 to 2006 with the same purpose as the W Series.

It was not all smooth sailing for the one-make championship though. Initially, the new series received criticism and still does. Some like IndyCar racer Pippa Mann defined it as segregation of the female drivers more than an inclusive sporting event. On the other hand, two-time championship winner Jamie Chadwick spoke about it positively.

*Source: W Series

What is sure is that while initially very divisive, the series has ultimately brought some positive publicity and media coverage to these young female drivers. One example is Jessica Hawkins who recently joined Aston Martin as a Driver Ambassador. While the concept might have seemed controversial, it is undoubted that it brought visibility and attention to the issue.

It cannot be the goal though. Sporting organisations should have a clear path for the future, using these series to accompany a cultural shift. They should move toward the unification of the different championships into a single one that, without any bias, can measure drivers against each other to give an opportunity to the best to emerge, regardless of their gender.

Similarly, in automotive, the numerous programs implemented by OEMs are bringing results and more diversity, but the definitive and long-lasting change will still require time, and planning future steps will be extremely important.

On Monday, Maserati announced its entry in the Formula E Championship starting from the 2022-23 season. This is not just a first for the Trident house, but a first for Formula E itself which sees the first Italian manufacturer entering the Championship, and a first for Stellantis that through Maserati gains access to the top of electric vehicles’ racing, and to an important testing platform for future developments. As said by Senior VP of Motorsport, Jean-Marc Finot:

“Beyond this piece of history, Maserati Formula E will be our technological laboratory to accelerate the development of high-efficiency electrified powertrains and intelligent software for our road sports cars”

About Formula E

Formula E will be on its 9^th season next year. But the most important news, on which Maserati is most likely betting, is the introduction of the 3^rd Generation (or Gen3) of the car. It promises to be lighter, more powerful, and overall more evolved than its predecessor. It should be a significant step forward compared to the current Gen2 Evo even in terms of looks, to try and make the sport more appealing.

Gen2 cars weighing at a minimum of 900 kg, have raced with a power between 200 and 250 kW (335 hp) in race and qualifying mode respectively, and a maximum speed limited at 280 km/h. The new one will weigh 780 kg, and produce 300 to 350 kW (470 hp) in race and qualifying mode, with a top speed that could go up to 322 km/h.

Keeping in line with its message, there will also be an improved focus on sustainability. Along with the best energy efficiency possible, the cars will be developed around a full Life Cycle Assessment, to retain its status as the first fully net-zero carbon footprint global sport. So far, the organisation has offset its carbon emissions thanks to initiatives certified by Verified Carbon Standard (VCS), Clean Development Mechanism (CDM), and Gold Standard (GS), all drawn around the Kyoto Protocol.

Gen3 cars will make more extensive use of sustainable materials. Consumables such as tyres, batteries, and even broken carbon fibre parts will be investigated to improve their lifespan, as well as their end-of-life/recycling processes.

Over the first 7 seasons, the sport's popularity increased quite significantly, peaking during the 2018-2019 season, with 411 million unique viewers. The next year was heavily impacted by the pandemic, and even though the 2020-2021 season displayed a good recovery, it did not quite reach the level of 2019. One positive data highlighted by ABB Formula E however is that the live audience was the highest ever.

Formula E unique viewers by season(in million)

Despite the increasing audience, revenues fell by 11.5% to €142.8 million due to races cancellation and sales prices decreasing. The key objective is still to reach profitability, but the upcoming financial regulations and car changes could have a positive impact.

Starting from seasons 9 and 10, in fact, the sport will impose new financial caps for teams and manufacturers. They will have a maximum expenditure of €13 million and €25 million per season each. The limit for the teams will be increased to €15 million from the 11^th season. These have been devised by the FIA management along with the teams to help the long-term sustainability of the championship.

In the meantime, along with Maserati, Formula E continues to receive the support of several high-profile manufacturers such as Audi, BMW, DS Automobiles, Jaguar, Mahindra, Mercedes, Nio, Nissan, and Porsche.

Formula E within Maserati’s Strategy

The entrance into the electric racing championship is only the last step of a long restructuring process for the Italian automaker. It started back in 2019 with important changes at the top of the organisation’s management after two bad years, and an extremely negative 2019 when the majority of the competitors took advantage of a healthy and growing market instead.

Since then, Maserati has successfully presented to the world its new super sports car MC20, which in the company’s representatives words would have marked the OEM’s return to racing.

*Fangio competing in F1 with the Maserati 250F

A racing history started in the early 1900s, with the Tipo26 whose name 26 indicated the year in which it first competed. It then followed in the 30s with several victories at the Targa Florio, and several successful participation in the World Sportscar Championship (now WEC) throughout the 50s. During these years it also took part in the Formula 1 Championship reaching victories and famously, the title in 1957 with Juan Manuel Fangio driving the 250F.

Followed more competitions in rally and touring series, up to the FIA GT Championship in 2004 in which Maserati participated with its MC12 derived from the Enzo Ferrari’s chassis. Its campaign successfully continued up to 2010 with 6 Teams’ Championships, 2 Manufacturers’ Championships, and 6 Drivers’ Championships.

*Maserati MC12 racing

Now Maserati is keeping its promise, but probably not quite like some expected. So, instead of going racing with the MC20, the OEM enters Formula E.

This, of course, is still extremely important (probably even more so) for the company’s medium to long-term strategy, as electrification gains importance, and Maserati brings forward its “Folgore” line-up (thunderbolt in Italian).

So far, the automaker has introduced two mild-hybrid versions of its existing models Ghibli and Levante both featuring a 48V motor paired with the 4 cylinders 2 litres engine. Electrification was supposed to arrive already in 2021 with the all-new GranTurismo and GranCabrio, only teased in camouflaged shots so far. The models have been delayed as it has the upcoming crossover Grecale, the smaller sister of the SUV Levante.

In terms of sales, 2020 was an even worse year for Maserati. This time though it was not alone, as almost every automaker, except those in the top-end of the luxury market, have been hit hard by the pandemic. The first half of 2021 had instead shown strong recovery signals with over 100% increase y-o-y, but that was mainly due to an overall market recovery. Sales of around 11,000 units in the first six months indicate that the automaker could even exceed its 2019 figure of 19,000. This year, however, minor problems have still been caused by the pandemic, along with the mentioned delay of the new models sparked by the chip shortage discussed in a previous article.

*New Maserati GranTurismo

Overall, even with setbacks caused by major industry factors, Maserati has shown important recovery signals and some interesting choices aimed at properly relaunching the brand. In this context, the Formula E entry represents an important opportunity both in terms of technological development and marketing.

For the automaker’s marketing, the Formula E championship is more of a bet on its future. But still a pretty safe one. In the best-case scenario, if the popularity of the sport keeps growing it could contribute to putting back Maserati as a prominent name in motorsport, as well as a name synonym with innovation and performance in the luxury electric mobility space.

If Formula E does not get the popularity many are hoping for, Maserati will still have the opportunity to reap the rewards of technological development and a boost in visibility and brand image with a niche of fans and enthusiasts.

Finally, it is important to note the opposite dynamic as well. In important markets like the US, where the Italian brand is very popular, the Maserati name could attract new fans to the sport increasing its following.

A honourable mention

In September 2020, as is required of any proper luxury manufacturer, Maserati launched its personalisation program: Fuoriserie.

This division adds prestige to the brand, especially on the occasion of high-profile partnerships like the latest with David Beckham for a one-of-a-kind MC20. The new motorsport initiative too can offer important synergy opportunities, like others are doing. One good example of this is Aston Martin that has used its recent entry in the Formula 1 championship on different occasions for special editions or unique specifications of its road cars.

Maserati can use its renewed motorsport activity to create a unique heritage thanks to the all-important personalisation in the modern luxury automotive market.

Over the last 20 to 30 years, all the manufacturers in the luxury performance automotive segment have developed various racing programs, for GT series and clients' racing. As the customer journey and experience have become increasingly complex over the years, these racing programs too, in many cases, have become wider and more diversified.

So, what exactly do these programs consist of? What is their importance in the involved automakers’ strategies? And what could come next?

Racing and Development Programs

The most common customer racing programs are the ones in GT racing. Here, there are several different series, either within the same vehicle’s category like GT3: Pro, Pro-Am, and Am (standing for professional and amateur), or different ones such as GT4, or GTE.

Through the Balance of Performance (BoP) mentioned previously in the context of Ferrari’s participation in the new LMH Category, it is ensured that specific restrictions are applied in order to make different models from different manufacturers able to compete with each other on the same level.

While some manufacturers do not develop cars for each one of these racing series, all of them take part in these championships to some extent through official and/or clients’ racing teams.

Type of customer racing activity by Automaker

*Current programs. In the past, some have changed or were stopped

At the beginning of 2021, Aston Martin announced it would withdraw from the WEC to focus its efforts on the F1 campaign. Its return to the Grand Touring competitions was back in 2006 with the previous-generation Vantage. Now it continues the production of both GT3 and GT4 versions of its sports car. Before the change in management and the entry into Formula One, previous CEO Andy Palmer also planned a single-marque Vantage Cup racing series.

Audi, started its program in 2009, with the R8 LMS GT3, and later on expanded it to other categories including three more models: RS 3 LMS TCR, R8 LMS GT4, and R8 LMS GT2. Also, for three years, from 2015 to 2017 Audi organised a one-make series called Audi Sport TT Cup.

Bentley celebrates its over-100-year long history including its first efforts in endurance racing such as the Le Mans 24 Hours in the 1920s, by introducing the Continental GT3 in 2018. The car now participates in different series thanks to various customer racing teams and has distinguished itself on various occasions.

Similar to Audi, BMW offers M Series models for different racing categories. M2, M4, M6, and M8 models are produced for GT3, GT4, and GTE racing. In addition, the BMW M2 CS Racing participates in multiple one-make competitions.

Mercedes too like many competitors introduced its customer racing program in the late 2000s. And with its first competing car, the SLS AMG GT3, already in 2011 it became the most successful new entrant over its first full season thanks to over 20 victories from the 40 vehicles sold to clients. Later, Mercedes introduced also a single-marque series with the CLA 45 AMG and substituted the SLS with the AMG GT3 and GT4.

Porsche has one of the longest histories of all when it comes to customer racing and a wide program. 911 GT3 Cup one-make series has separated events in many countries. Carrera Cups are held in Asia, Australia, Benelux, Brasil, Germany, France Great Britain, Italy, Japan, Scandinavia, and North America. There are other events as well like the Porsche Mobil 1 Supercup, Porsche Sprint Challenge, and Endurance Trophy.

McLaren produces both GT3 and GT4 cars for customer racing starting from its 720s and 570s models. But along with them, it recently introduced the 720s GT3X, which is a different creature, with a different purpose, that we can look at a bit later.

Going on to Lamborghini, the Italian automaker produces both the Huracán GT3 Evo and the Huracán Super Trofeo EVO2. The two cars are respectively used in Grand Touring competitions and in the single-marque Super Trofeo competition organised by Lamborghini. The program started in 2009 with the Huracán predecessor Gallardo but has always been reserved to the smaller sister of the house, not involving modified flagship cars.

This was up until one year ago with the introduction of the racing car Essenza SCV12, which in some ways is comparable with the aforementioned McLaren 720S GT3X and with the cars produced by Ferrari XX. These models are not intended for proper racing. They are not developed around a racing series, but they still effectively involve clients driving track-only cars. For instance, XX is a special program introduced earlier than the others, in 2005. It develops highly limited track-only versions of Ferrari’s most important cars. So far the line includes FXX and FXX Evo from the Enzo, 599xx from the 599 GTB, and FXX-K and FXX-K Evo both from the LaFerrari. These are kept by the company, not the owners, and delivered to the tracks on occasions of special organised track days where the clients helped by Ferrari engineers and technicians can enjoy the most extreme driving experience.

*In order Ferrari FXX-K Evo, Lamborghini Essenza SCV12, and McLaren 720S GT3X

This program is explicitly intended by Ferrari as a testing platform that involves “a group of special customers in the development of the Ferrari of the future, asking them to help provide Corse Clienti engineers with information”.

All these are part of an ongoing trend, well expressed by Stephan Winkelmann’s “What if…” when talking about Bugatti’s Bolide project. With these vehicles, automakers look for the absolute extreme in track performance without the need to abide by any restriction.

Corse Clienti is the name that indicates the overall group of activities comprised of XX Programme, F1 Clienti, with which Ferrari sells to clients previous seasons’ F1 cars that are then delivered to track days and driven on the same occasions as the XX ones, and finally the single-marque Ferrari Challenge.

Last but not least Ferrari also participates with its 488 GT3 Evo in GT and endurance competitions.

Racing divisions development

The graph shows how from the 2000s and especially toward the early 2010s the major companies involved in GT racing through customer racing programs increased their production and range variety.

Racing cars produced since 2020 by Automaker

With Porsche and Ferrari leading the way as they already had established their own one-make series, for instance, others followed over the last decade. Apart from McLaren Automotive that is effectively just 10 years old, others like Mercedes AMG, Lamborghini, and Audi, started to those years to significantly enrich their racing car offering.

Two seem to be the main reasons for this increased attention to motorsport divisions’ development. One is the overall increase in wealth in developed and developing countries such as China that translates into higher demand. According to a recent report by McKinsey, in fact, the global wealth over the last twenty years tripled, with China overtaking the US and leading with a big margin.

Secondly, the influence of the entertainment industry, especially with video games has gained massive importance over the same period and mostly with younger generations that by now have become adults with proper buying power. Among many, last week’s article about Porsche’s Vision GT is a clear indication of the importance of this sector.

But what is next?

First of all, Porsche again has shown its own vision in terms of automotive products with the Mission R presentation in Munich. Electrification is likely to make motorsport activities more accessible for a wider demographic thanks to reduced costs, so, the increase observed over the last decade could continue in the coming years.

Considering the increasing integration between virtual and real-life motorsport, OEMs could improve their opportunities by creating more dedicated programs, courses, or initiatives during events (outside of the already present highly selective ones such as official Formula 1 E-sports teams) aimed at attracting new generations into sim-racing which could be beneficial toward different purposes. First, creating interest in the sport from a young age as it has been happening so far, and increasingly in these last few years. Secondly, improving brand loyalty, and finally, creating opportunities for new talents to be discovered. These would complement well already existing and less accessible young driver programs.

*Cover image by Lamborghini Media

On Monday Porsche revealed its Vision GT Concept. A futuristic racing car that will be featured in the upcoming Gran Turismo 7 releasing early in 2022 as a Play Station exclusive.

*Source: Porsche Media

This is only the latest concept designed by an automaker for this series developed by Japanese Polyphony Digital. And Porsche has been featured in it since 2017, right after the expiration of its exclusivity contract with Electronic Arts.

Even before the announcement, the partnership between the German automaker and the Japanese developer was evident as several other Porsche’s vehicles were heavily featured in the new game’s trailers over other brands.

But what is the impact of the Vision GT project for an automaker? And how has the game impacted the younger generations and OEM’s marketing?

Gran Turismo and Polyphony

Polyphony Digital, like a number of different smaller game developers, is a subsidiary of PlayStation Studios a division of Sony Interactive Entertainment since 1998.

The Studio was actually founded in 1994 under the name Polys Entertainment, and it was in this period that the first Gran Turismo was released for Play Station along with a couple more titles. The success was immediate, and since then it has remained pretty much the only franchise developed by Polyphony with 12 editions released so far.

The first edition alone sold an estimated 10.8 million copies. And the trend continued. According to Goodwood’s website, the Gran Turismo franchise sold over 85 million copies worldwide which puts it in third place among the best-selling racing games of all time. Head of Polyphony Digital Kazunori Yamauchi, in an interview earlier this year, confirmed the success of the latest release Gran Turismo Sport (2017) reaching 9.5 million users.

The game’s popularity has increased as well on streaming platforms after the pandemic. With people forced at home, virtual entertainment experienced a massive boost as highlighted in the article How Covid-19 Turbocharged the E-Sports Racing Industry for official e-racing competitions. The same happened for enthusiasts’ streaming channels with some of the most popular sim-racing platforms such as iRacing and Assetto Corsa reported with the Bentley and Fanatec Partnership deal.

Gran Turismo Sport, since its release in late 2017, experienced the same growth from 2020 on with a peak in viewership of over 30,000 people on May 14^th, 2020, which is very good considering the game was already almost 3 years old.

Gran Turismo Sport Twitch Channels and Viewers ('000) since 2017 release

*Source: Twitch Tracker

Its presentation trailer released on YouTube in June 2020 has so far reached 10.7 million views, and it is only slightly behind a Need for Speed one from 2019 that reached 11 million clicks as the most-watched racing game presentation trailer. It is also ahead of its most direct competitor on Microsoft’s platform Xbox, the Forza franchise.

So, it is clear how Porsche’s and other automakers’ investments in the development of these concepts, which are usually realised as full-scale models too, has an important return. The capacity of influencing young generations of enthusiasts by transforming them into brand supporters and potential future clients. As mentioned by Luca Venturi during our interviewsome of those who went on to buy a specific luxury performance car as adults were influenced in their choice by the games they played and “their dreams” as children.

The concept is confirmed as well by Porsche’s Vice President Marketing Robert Ader claiming:

“We can engage young and digital target groups in the place where their automotive dreams are born: the world of gaming”

Not just videogames

Polyphony Digital has joined the FIA in a unique long-term deal for two official championship series: The FIA-certified Gran Turismo Nations Cup and FIA-certified Gran Turismo Manufacturer Fan Cup.

The series of events, and especially the World Finals in 2019 involved a number of personalities including several well-known internet celebrities as well as Formula One drivers such as Lewis Hamilton and Max Verstappen. This kind of participation and media coverage gave the Gran Turismo Championship huge popularity and several million views.

Additionally, involving this kind of audience, not only promotes easier access to motorsport to a wider audience but introduces also the possibility of a transition from sim-racing to real-life racing. By fulfilling a series of requirements, gamers can become eligible for the “FIA Gran Turismo Digital Licence” from their local national sporting authority.

All these factors combined created the incredible appeal of the Gran Turismo Franchise. And this is the reason why so many brands bought into this marketing opportunity with the likes of Lamborghini even presenting its concept officially during one of these events.

*Lamborghini V12 Vision GT

Along with Porsche and Lamborghini, in fact, other brands that since 2013 participated in this project are: Alpine, Audi, BMW, Bugatti, Chevrolet, Daihatsu, Dodge SRT, Honda, Hyundai, Infiniti, Jaguar, Lexus, Mazda, McLaren, Mercedes, Mini, Mitsubishi, Nissan, Peugeot, Subaru, Toyota, Volkswagen, and Zagato.

Vision GT

The Porsche Vision GT will be only available in the upcoming game, and apart from the full-scale model it will not be produced in any other real-life form. However, the release of this model shows again Porsche’s forward-looking approach to the market.

A team of young designers that developed this car, had much more freedom not being constrained by real-life restrictions and technical requirements. This is not to say that the car was developed just to showcase an eye-catching yet unrealistic design. It actually appears much more grounded in reality than several concepts developed by competitors, while still looking at the future.

The company, in fact, highlighted how the Vision GT is undeniably Porsche bringing the brand’s DNA into the design with specific cues such as the low sloping lines, pronounced wheel arches, quad headlights, and rear light bar recalling the likes of Porsche Taycan and 911 992. In the presentation, they also took the time to showcase the team’s attention to sustainability pointing out how the concept was entirely built using sustainable materials. And finally, they provided technical details about its performance as well:

• Acceleration 0 – 100 km/h: 2.1 seconds
• Acceleration 0 – 200 km/h: 5.4 seconds
• Top speed: 350 km/h
• Peak power: 820 kW (950 kW with overboost & launch control)
• Battery size: 87 kWh
• Range: 500 km (WLTP)
• Drivetrain: all-wheel drive

However, one element that was not mentioned but probably shows even more how the company is looking at its future market is this design’s resemblance with that of the Mission R presented at IAA in Munich earlier this year.

Several design elements in the front and even more in the back, as well as the overall shape, are clearly born from an evolving but univocal and cohesive design language.

A rumour that started right after the unveiling of Munich hinted that Porsche might have planned to introduce the Mission R as a substitute for the stagnating 718 line by 2024. This would be appealing for the young audience in China (Porsche’s biggest market), where the average 718 buyer is 31 years old. Porsche is also going to make the new Mission R its most innovative model in terms of interior technologies, once again showing its focus on the younger audience that this car is more targeted towards. In this context, creating the “hype” for the brand and, even more, for a specific design language in the audience that in a few years might be able to afford a sports car makes even more sense.

With the goal of creating an immersive and long-lasting brand experience, Porsche enhances its digital entertainment partnership making it an integral part of its marketing mix.

*Cover and Gallery images by Porsche Media

On Monday, a rumour started by Autocar circulated on the internet according to which Audi had bought McLaren Group after a bidding war with BMW. The news, however, has been denied soon after with an official statement by the British automaker:

“McLaren Group is aware of a news media report stating it has been sold to Audi. This is wholly inaccurate and McLaren is seeking to have the story removed. 

McLaren’s technology strategy has always involved ongoing discussions and collaboration with relevant partners and suppliers, including other carmakers, however, there has been no change in the ownership structure of the McLaren Group.”

There are two interesting topics that can be explored from this statement though.

The first is that, while McLaren denies what was initially stated by some media outlets, it does not exclude potential ongoing negotiations or corporate restructuring.

The second is the confirmation of interest in Formula 1 by VW Group, more likely under the Audi, or Porsche brand that could lead to something more in the future.

ABOUT MCLAREN

McLaren comes out of an extremely difficult period in 2020, like many other automakers.

As reviewed in McLaren’s Q1 2020 and updated strategy article, the company set certain targets at the beginning of the year when risks caused by the pandemic were already known. One was to deliver 4,000 vehicles by the end of the year, which would have represented a 16% decrease compared to 2019. But at the end of 2020, the company delivered only 1,659 vehicles. Additionally, the company laid off 1,200 employees over the same period to offset the losses.

The Track25 strategy, defined in 2018, established a production volume of 6,000 cars by 2025. But 2019, which was an extremely positive year for the sector and for the majority of companies in this segment, was already not completely good for McLaren. Production in fact decreased by 2%, even though McLaren claimed that this was planned to focus more on margins improvement and preserve quality and exclusivity over volume growth. And financial results were indeed positive with revenue increasing by 18% y-o-y reaching £1,486 million with the automotive division contributing a stable 84% to it. Other metrics like Debt and Liquidity were not as positive though.

Fast forward to 2021, and most companies have shown impressive results (some even proper record achievements) with a fast recovery over a 2020 that, in the end, affected the majority way less than their high-production-volume counterparts.

MCLAREN SALES, REVENUES (£ MILLION), AND PROFIT/LOSS (H1 2017 - H1 2021)

McLaren too reported significantly better results in the first half of 2021, but still far from both the 2018 and 2019 ones in terms of deliveries and revenues, profit however is up, indicating that the restructuring started in 2020 to make the business more efficient has brought positive results.

There are two more important factors that could play into corporate developments or reorganization of the automotive and motorsport divisions in the near future. One is, of course, the departure of Mike Flewitt as CEO of McLaren Automotive. He entered the company in 2012 and COO and a year later took the role of CEO. McLaren has not yet announced who will be his successor, and as of now, McLaren Group Non-Executive director Michael Macht took his role, with sales, PR, and marketing department reporting to the Group’s Executive Chairman Paul Walsh.

MCLAREN’S FORMER CORPORATE STRUCTURE

The second is an indication of the changing necessities for the company to build a sustainable and more focused model. In August 2021, in fact, McLaren sold its Applied technology division to Greybull Capital, leaving only Racing and Automotive under the McLaren umbrella. So, as of now, the Group might be looking at other options to sell part of the other divisions or find new partnerships to realise this new model.

WHAT ABOUT VW GROUP?

This claim sparked the interest of the media and the speculations about the true interest of the Group’s motorsport division in entering the F1 championship.

Current McLaren F1 team principal Andreas Seidl too was quoted at the end of last year by Motorsport.com. He claimed that while he thinks it is highly unlikely to see any new manufacturer entering the championship in the near future, even just as an engine supplier (now that Honda is set to leave at the end of 2021), the new rule change of 2025 represents an actual opportunity for new entrants. Representatives of both Audi and Porsche were invited to take part in a meeting on the development of the next generation of power units with F1 engine manufacturers Ferrari, Mercedes, Red Bull, and Renault as well as Stefano Domenicali and Ross Brawn from F1 and Jean Todt from the FIA. Using a technology that will be also relevant in other contexts of automotive and transportation is key according to Seidl, not only for the manufacturers involved but also to attract new ones.

At different times, both Porsche former Vice President of Motorsport Fritz Enzinger, and CEO Oliver Blume confirmed that participation in these meetings does not necessarily translate into an entry in F1, but they offer a proper evaluation opportunity.

The current situation is allegedly what stopped Porsche and other companies in the past few years from entering F1. The initial investment required would be too big to enter without even getting a real chance of winning against established teams in the sport. So sustainability, cost reduction, and a simpler power unit will be crucial for Formula 1 going forward.

So, on the one hand, an interest in McLaren Automotive looks unlikely, considering VW’s existing portfolio of brands. On the other, even though what has been discussed so far seems to indicate that no VW Group brand will enter Formula 1 in the next four seasons, potential interest in a partnership with an established manufacturer or team such as McLaren could be relevant for the future. It would effectively give early access to significant know-how in every aspect of the sport, and probably more bargaining power when it will come to defining new regulations for the next generation of F1 cars.

Ahead of the 2022 season, which will bring significant changes to the rules, Formula 1 reaches half of its longest season with 23 races initially planned.

Thanks to an agreement between the owner Liberty Media and the FIA, the sport has recently changed its rules introducing the budget cap of $145 million that was teased for a while. Its introduction initially thought to be gradual was accelerated due to the pandemic impact. Furthermore, the current limit should receive more gradual cuts in the next two years.

Teams over the years have applied different strategies and business models to ensure their survival and thrive in the most technologically advanced sport of all. This might seem a fairly straightforward task for larger teams owned by big automotive manufacturers, especially after the budget cap was introduced to level the playing field. But that is surely not so for smaller, independent teams. So, as the sport became more complex over the years, these firms have used different solutions.

Let’s see what they are and how effective they have been so far.

INCOME FROM F1

Naturally, part of the revenues of each team comes from the sport itself in the form of the Concorde Agreement. According to this agreement, every team at the end of a season gets an equal share of the F1 earnings’ percentage, for participating in the two previous seasons. Additionally, another part of the F1 teams’ revenues is calculated according to the ranking order at the end of the season, with the winner taking the largest share and the others getting less at each step of the ranking.

FORMULA 1 PRIZE MONEY SHARE DEPENDING ON THE FINAL CHAMPIONSHIP STANDING (%)

*Source: The Race

Along with these two shares of the F1 revenues, some teams have access to other money thanks to their status within the sport. While specific details of the agreement are not disclosed, some others have been made public.

According to The Race, Ferrari as the longest-standing F1 team earns an additional share, being the only firm that has taken part in every single season. Its political and marketing influence on the sport is significant. Along with that, with the new rules, teams that have a special heritage in the sport, or have classified among the best three over the past few years, have access to a 20% share of what F1 earns above the $650 million threshold. These teams are Mercedes, Red Bull, McLaren, Williams, Renault (now renamed Alpine), and again Ferrari.

Overall, despite still having larger teams earning significantly more than others, the system should ensure a much fairer distribution.

The second source of income that every team enjoys, even if to a different extent, are the sponsorships. Every team each year receives money from 10 to 20 sponsors that pay money to have their name displayed either as a title partner or simply in different spots on the car. These deals are negotiated individually with the teams depending on the kind of exposure a company is looking for and the time the car is shown on TV or social media (naturally, this again goes in favour of larger and winning teams).

But there is more.

*Formula 1 2021 Drivers line-up

It is from last week, an important announcement by Bentley regarding a further step into the world of e-sports with a unique initiative and the collaboration with an extremely active player within the sector: Fanatec. But first, let’s see what has been going on so far.

Back in 2020, right after the pandemic hit, the world of motorsport experienced a significant and sudden change. Sim-racing, like official virtual competitions in numerous other fields and videogame genres, was already on the rise. But the global lockdowns, and other health and safety measures put in place to contain the spread of the virus gave the booming e-sports industry a further push.

The mean of choice for this were the various Livestream platforms on the internet. Countless personalities, both born online and coming from real racing (such as almost the entire new generation of Formula 1 drivers) found themselves spending more time involved in e-sports events.

In addition, leagues and brands joined the movement organising major events and racing leagues like never before. Along with Formula 1 continuing its official e-championship, FIA WEC Le Mans Virtual 24 hours was also held for the first time.

The audience increase is clearly reflected in the number of views and hours watched recorded by Twitch for major racing simulators such as iRacing, Assetto Corsa, and Assetto Corsa Competizione.

IRACING TWITCH VIEWERS AND HOURS WATCHED

ASSETTO CORSA TWITCH VIEWERS AND HOURS WATCHED

ASSETTO CORSA COMPETIZIONE TWITCH VIEWERS AND HOURS WATCHED

The year is 2023, and it will mark Ferrari’s return to the top class of endurance racing. Its last entry was in 1973, and after that Ferrari only participated in the GT class where it collected numerous successes. The last one in 2019 with the 488 GTE in the LMGTE Pro class.

But what is exactly the Le Mans Hypercar (LMH), and what does this series mean for Ferrari and other luxury car manufacturers?

SOME BACKGROUND INFO

The LMP1 category in the Le Mans Prototype races represents the top of closed-wheel endurance racing, and, in terms of speed around the track, second only to Formula 1. The new LMH is set to replace LMP1 from this year in the FIA World Endurance Championship.

The new series will maintain some similarities with the predecessor. Both hybrid and ICE cars will be allowed. But it will be also built on a different philosophy that promises to bring not only more interest for the audience but also more benefits to automakers for brand exposure.

While the LMP is heavily regulated in terms of design requirements to limit and align performance between teams (which is ultimately the reason why the prototypes end up looking remarkably similar to one another), the new LMH will be structured around so-called ‘Performance Windows’.

New technologies in performance measurement and analysis made this approach possible. So, each car is analysed and required to fit specific performance brackets for their power units, aerodynamic packs, weight, and so on. A series of best practices defined Balance of Performance (BoP), coming from expertise in other series, is applied to LMH. According to the FIA WEC website, the latest technical solution is the Torque Meter. A sensor measuring and limiting the power and in turn limiting the development costs.

After the unprecedented events of 2020, cost reduction is another important topic that has even impacted Formula 1. The budget cap is not just applied as an effort to uniform the field, but also as a measure for sustainability both for the business and the manufacturers. The same goes for the FIA WEC, where cost reduction is achieved through limitations to the materials and development for internal and aerodynamic components.

*Source:FIA WEC LMH

“The new era has officially begun” reads Aston Martin's announcement of its Formula 1 Team Title Sponsor Cognizant, a provider of digital products and services. The new partner will not just have a sponsorship role, but actively contribute to the F1 Team infrastructure development.

*Source:Aston Martin Media

One consequence of the quarantine period for the motorsport industry, and indirectly for automotive companies, it has been to bring E-sports to the spotlight, accelerating their growth even more.

I already touched in a previous article on the growing importance of E-sports in the Formula 1 context. This, along with other marketing activities, has been so far an effective way to attract a younger audience to a sport that was losing popularity. The merit of this discipline has been to allow young people to take part in a sport that most could never afford. Are well known in fact the prohibitive costs of a career as a professional driver, right from the start in karting.

*Virtual F1 Grand Prix in Monaco

Rising numbers of young fans are sparking a Motorsport renaissance through social media. How does it happen? And can this wave favour car manufacturers?

Formula 1, referred to by many as the pinnacle of motorsport, in 2018 registered its second year in a row of audience increase and it has been the pinnacle of this new popularity surge.

With an increase year-over-year of 10%, it reached 490.2 million unique viewers. The top 20 countries by the audience even registered an average of +14%.

As in many other sectors, emerging markets in Asia accounted for a large share of such increase. India +87%, and China that tripled its audience since 2017 reached 68 million viewers becoming the second largest market for this sport after Brazil that counted 115.2 million. The total TV audience increased as well reaching 1.758 billion.

In 2018, across 'Western' social media (thus excluding Asian popular platforms such as WeChat and Weibo) its followers totalled 18.5 million. An astonishing +53.7% compared to the previous year that made Formula 1 the fastest-growing sport-related social media channel.

What started this change? The main input has come from Liberty Media. The American media company that at the beginning of 2017 finalised the acquisition of Formula 1 Group and the commercial rights of its Championship for US$4.4 billion.

Entrepreneur Chase Carey, who replaced Bernie Ecclestone as CEO of the Formula 1 Group, is applying a long-term plan and focusing on avoiding narrow-framing strategies that according to him were employed so far by the F1 management. There are several ways in which the new executive is trying to reignite the passion for this sport such as race calendar extensions and new regulations. One of the major efforts though is through the heavy employment of social media platforms.

The significant engagement and following increase evident from the two graphs above reflect such focus. YouTube and Instagram, second and fourth among the most used social media platforms in the world have an audience of over 2 billion and 1.2 billion people each. They are also the ones with the youngest and fastest-growing audience.

Carey himself in an interview for Financial Times exemplifies the rationale behind this new direction by highlighting how the internet offered the opportunity to create the "Shared Vision" for all the Formula 1 stakeholders. A vision in which teams, drivers, and especially the audience interact with each other is evolving every day and it represents the strength that no other communication means had before.

The opportunity to participate and have a real impact on the content produced instead of being a passive spectator is what is making all the difference, and these resources are being used impeccably. Not only to produce content but for engagement too. Publishing original videos and photos along with a mix of materials quoted from drivers and teams create that unique 'Shared Vision'.

Partnerships like the one with Netflix for the show “Drive to Survive” contributed as well to show the ‘more human’ side of the sport and enjoyed a good reception by its viewers.

The increasing importance of E-sports is also consistent with this vision, and the only way for everyone to participate in a sport that has prohibitive costs for the average F1 fan/enthusiast. It is particularly relevant also because it attracts almost exclusively a very young audience composed by Generation Zs. 5.5 million viewers, with around 80 percent of under 34, while for the actual sport the average is 40 years old. Such is its importance that for the 2019 season, every Formula 1 team in the Championship will have its own E-sport team representing it in the official competition.

The second crucial aspect of this communication evolution is live content. With such a massive continuous stream of uploads, trends become obsolete very quickly and this adds value to the live experience and its immediate fruition.

The priority then is to attract a new and young audience and F1 management thinks that “unique event content will continue to appreciate in value”.

Automakers involved in the Championship such as Alfa Romeo, Aston Martin (even if only through a partnership), Ferrari, McLaren, Mercedes, Renault, as well as OEMs like Pirelli and Honda are benefited indirectly as well by Formula 1’s popularity increase.

Audience data from the Formula 1 YouTube channel show a significant positive correlation with that of major luxury performance car manufacturers involved in the Championship. The graphs below display a regression of views data from the channels of two major manufacturers historically involved in the F1 Championship: Ferrari and McLaren. While the relation is evident for the views count, the result is not statistically significant for the channel subscriptions which may involve a stronger component of personal preference. Arguably, the synergy created by each member’s activity is beneficial for all the parties involved and worth the continued effort.

Formula 1 is the brightest example of this new business model in motorsport, but not the only one. Several other series such as MotoGP, FIA World Rally Championship, Indycar and FIA World Endurance Championship are applying the same kind of strategy with relevant results.

Social media looks very much like the most important tool to encourage the growth of motorsports that have been lacking audience traction in this decade. The upsurge is taking shape through synergies between individuals, automakers, OEMs, and institutions which with a varied mix of contents like videos, lives and online sports create the ecosystem that is so necessary to attract Millennials and Generation Zs today.