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Home > Sports > Formula One > Reuters > Report


China braces for Formula One debut

Godwin Chellam in Shanghai | September 17, 2004 10:55 IST

Formula One, a symbol of global capitalism and glamour if ever there was one, is ready to take China by storm when the world's most populous nation hosts a Grand Prix for the first time next week.

Shanghai has planned for the moment for years, spending at least $325 million on the most spectacular, ultra-modern circuit that the likes of Ferrari have ever visited.

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According to the city's branch of the American Chamber of Commerce, Shanghai agreed to pay $40 million annually for the privilege of hosting the world's most expensive sport for the next seven years.

The returns, for the image of a dynamic, futuristic and fast-growing metropolis -- possibly the world's busiest construction site -- could also be considerable.

"Number one is prestige," Michael Dunne, president of the Bangkok-based consulting firm Automotive Resources Asia, told Reuters.

"It declares to the world that China has arrived and specifically, Shanghai, is world class because requirements for hosting it are rather stringent.

"Five years ago, China couldn't host it. Today it can."

BEIJING ATTEMPT

China has been trying to host a Formula One race for more than a decade, spending nine years developing a circuit near the southern city of Zhuhai.

Although listed provisionally on the 1998 calendar, the circuit was never approved for use after failing to meet international standards.

But Formula One's commercial supremo Bernie Ecclestone has always seen China as an essential ingredient in any truly global championship.

So too do the major carmakers and sponsors, including tobacco manufacturers eager to race in a country willing to let them advertise their products at a time when Europe is increasingly cracking down.

Shanghai's circuit, designed by German expert Hermann Tilke and with a giant 'wing' 140 metres wide spanning the main straight, should be an impressive backdrop and is already earning rave reviews.

The overall shape is designed to represent the Chinese character 'Shang'

"Shanghai is a beautiful circuit: The architecture is stunning -- you can tell that a tremendous amount of effort has gone into the buildings," says McLaren boss Ron Dennis, whose own team headquarters is as state-of-the-art as they get.

Briton Jenson Button, one of the few drivers to have visited the facility some 40 minutes from downtown Shanghai, was similarly enthused.

"It'll be an absolute blast to race there," he said.

"It should be exciting and I think the reaction of the fans will be amazing. The level of enthusiasm there for F1 is huge, so we'll have to make sure we give them a decent show."

Chinese fans snapped up all the 150,000 tickets for the September 26 race a month ago.

Licensed Formula One merchandising has already gone on sale and Chinese television has been introducing the vast and untapped audience to the world of Formula One for more than a season now.

McLaren and Williams have given Chinese drivers the chance to try out a Grand Prix car this year.

LOCAL SPONSORS

But, with race tickets ranging from 370 to 3,700 yuan ($44.70 to $447.00) in a country where the average annual wage is $1,000, not everyone has succumbed to Grand Prix fever.

"Why bother to pay all that money when you can watch it on TV for free? For the prices they're asking, I'd rather watch an NBA match," said Zhang Xiao, a 26-year-old information technology engineer living in Shanghai.

The National Basketball Association's Houston Rockets, featuring Chinese player Yao Ming, and Sacramento Kings are due to play two matches in China in October.

Some local sponsors have also expressed reservations.

"Several firms had approached us initially, but decided to step back in the end. They were probably unsure about the risk-rewards," said an events consultant at Frontiers Group -- a sports marketing firm in Shanghai.

That has not stopped Chinese firms from getting in on the act -- luxury property project Beijing Chateau has signed on to sponsor struggling Jordan, while Shanghai TV has teamed up with Williams.

Others are considering one-race sponsorship, which can run from $200,000 to $2 million, and events organisers say the 25 or so corporate boxes at the track are fully booked.

One events organiser said they were offered a box at two million yuan seven months ago but the price had risen four-fold to eight million yuan when they finally decided to make a reservation after three months.

© Copyright 2005 Reuters Limited. All rights reserved. Republication or redistribution of Reuters content, including by framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.
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