MotoGP madness - Busy about the Business

I really do miss the SuperGT races

If you've ever been to a Super GT race - aside from the GT Queens - these races are like a 3-day all you can soak-up, testesterone-filled trip to disneyland, legoland and a candy store combined... for a petrolhead, of course. It's Fast and Furious in the flesh, sorta. For reasons best reserved for the more experienced pundits, it is kinda sad that the Super GT Series does not come to Malaysia anymore. 

Hanging about at the Sepang circuit mall area at one these races in the past used to inspire me to think of the event as this ridiculously over-the-top, gloriously absurd showcase of really fancy and totally souped-up super cars. To say it was an event for car enthusiast --super or otherwise -- would really be understating it. Somehow I would always bump into that cute mechanic from the workshop where I service my car or that geezer who sold me those insanely expensive run-flat tyres. 

"Aiyohhhh kakak, tak boleh miss ini race lor! Tiap-tiap tahun saya mesti cuti satu hari datang ini SuperGT," (I'm not sure how to translate that, but essentially - this is one race I cannot miss) was what that cute mechanic said to me. Aside from the mind-bogglingly expensive cars on display, the exhibition booths were always filled with people peddling their wares, from spark plugs, suspensions, brake pads, tyres, tyre rims to in-car audio systems, the latter making me a bit deaf. "It's a big and good business and that's why we're here," said the tyre man shop to me. 

By the time I started working with one of the Super GT 500 teams, that meaning became evidently clearer, particularly if you are one of the three mega Japanese car manufacturers - Toyota, Honda and Nissan. "There is a following [for SuperGT]. And that following is important to us, because that following are the 'influencers'. SuperGT is at the top end of what's technically possible, that helps sell the brand, yes, but the role of these influencers is what keeps the machinery of that business going," was how a guy from one of the 3 car manufacturers explained it to me.

Now of course MotoGP and SuperGT don't stand on the same comparable stage. For one, one has 2-wheels, the other 4-wheels. *grins*.. But to me, they both are prime examples of how relevant these race events are to the industry that surrounds and supports them. 


Big Brands, Medium Brands, Small Brands... Big Business

I've had numerous conversations.. no, arguments.. about the merits of motorsports as being an industry in its own right. There are those who would argue that motorsports - racing on either 2- or 4-wheels and everything in between is essentially a spectator sport, pure entertainment, with little or no direct real relevance to economic activity or transfer to the public domain. Well, I am not so sure about that. 

My pathetic collection from the weekend.. 

At the recently concluded Malaysian Motorcycle GP (MotoGP), what was particularly interesting to me as I wandered about the mall area were the number of exhibition booths taken up by commercial brands. I am not talking about those peddling their fanwear paraphernalia either. Wandering about the mall area over the MotoGP weekend, all the major brands like Yamaha, Honda, Suzuki, Ducati, KTM, Alpinestars and even Red Bull as well as local industry players like Modenas were represented. These are not small names, by any means. These are the heavyweights of the motorcycle industry, one that is giganormous. 

For instance, (disclaimer: this author professes to be numerically dyslexic) both Yamaha and Honda combined generated a staggering Yen ¥2,268 billion (or ¥2.268 trillion - 12 zeroes is a trillion by the way) in sales which is about USD$21billion for FY2013 from the motorcycle sector alone. Then consider this: sales in the motorcycle segment accounts for almost 66% of Yamaha Motor Corporation's net sales. As for Honda Motors, the motorcycle segment accounts for 14% of their net sales. Imagine what the overall total revenue for both companies would be! Phew.. 

To put that into some kind of business perspective comparison (seriously?!), consider the sporting world's two mega-super-major brands - Nike and Adidas (after all it is a FIFA World Cup year). The Swish and the Three Parallel Bars generated a combined revenue of USD$43.8 billion, and that is across the entire gamut of their business. Yamaha and Honda's figures were just on their motorcycle business.

Mind-boggling... 

Transference

Realising the omnipresent threat of a fiscal migraine, I went in search of my normal self and poked my nose in a few of the booths. I spent some time in the Yamaha booth one morning and in talking to their sales and marketing people, I kept hearing the same tune (from the company with tuning fork logo! pun totally intended), "MotoGP is really very important to Yamaha. What transpires on the track truly does translate into the products we produce for the consumer and ultimately sales for us."

The brand spanking new Yamaha MT-07. The CBU units will be available in Malaysia from November onwards. Go to

www.yamaha-motor.com.my for more info.

At a media launch of Yamaha's latest motorcycle, the MT-07, someone asked how much of the MotoGP technology does Yamaha really inject back into the motorcycles it produces for consumers. Their response -- though naturally guarded as this falls in the proprietary realm and is therefore classified "top secret" -- is that there are many areas of technical and mechanical development that takes its cue from the MotoGP technology. The example cited was that of the MT-07 rear suspension design. "As the layout [of the rear suspension] contributes to the objective of a lightweight and compact design, our engineers mounted this part directly to the engine, a feedback derived directly from the MotoGP technology," explains Shiraishi-san, the MT-07 project leader.

OK, I am not a motoring technical expert, but on whether the technology from MotoGP ends up in the products, the answer is pretty much a big fat YES. 

Rossi and Lorenzo at the Yamaha MT-07 bike reveal

In layman's terms, as another sales and marketing person so eloquently put it to me, "it's simple when you think of it this way - if Marc Marquez does well, chances are his fans will go out tomorrow and look for that same brand of helmet he uses. If Lorenzo wins a race, there's a high probability that his fans will go out and look for that A-Stars riding jacket, the same guys who make Lorenzo's racing leathers." 

To cement that point, I spoke to a gentleman who distributes HJC helmets in Malaysia and he shared his experience on the positive effect of having both Jorge Lorenzo and Ben Spies as HJC's ambassadors on his sales. "It's amazing you know. Not only do the fans replicate the riders' helmet designs, but they also buy the same brand that Ben and Jorge use."

Here's another example closer to home. In conversation with the men who supply Hafizh Syahrin's racing leathers (RS Taichi), they said "just by having Hafizh Syahrin use our leathers has really boosted our sales efforts in the region, especially in Malaysia. It's incredible what an effect Hafizh has had on the confidence for our brand." 

To me, the effect that MotoGP has on its fans actually goes beyond just satiating the entertainment allure of the sport. There is also a very direct impact to the very big and very real thriving industry that surrounds it. Be it the sales of the motorcycles themselves, spare parts, helmets, riding leathers, boots, gloves, lubricants or fuel .. you name it. 

I haven't even begun to think about the revenue derived from TV rights either! Honestly, the fact that in as much as there is an entertainment value to MotoGP, it is no secret that there is also a very real economic value. Nothing earth-shatteringly new there, of course.

Go check out a cub prix race, it's crazy fun too!

Is there a real viable economic argument to motorcycle racing and motorsports? I believe so. What I saw at the MotoGP (and SuperGT), I also see at the Malaysian Cub Prix Championship, at a proportionately different scale, of course. You'll also see the presence of local and regional industry players at these races too. And they too have told me at various points in time that their involvement goes beyond just being a sponsor to a team or rider, it's part of an investment strategy that will hopefully yield into sales, and therefore company revenue and ultimately brand equity. OK.. some say that's the usual PR spiele while others argue that those returns are actually incremental. 

Hmm.. Then I recall what that Japanese manufacturer said about influencers. It's funny what perception can do to your brand and to your business, and these influencers (people or otherwise) are one of the primary directors to the health of not just the business, but also the industry.

Whichever side of the fence you're on, I have this to say - every time I was at the end of a SuperGT or MotoGP race weekend, I always left with this feeling that the businesses that make up this [mis]perceived, 'confined' industry that supposedly occupies the peripheral space in the consumer's consciousness, just left the circuit that little bit happier. 

And you know what, on my way home on Sunday, sitting in that ghastly post-race traffic jam, I actually lost count of the number of riders using RS-Taichi or Alpinestars riding jackets, or the number of Ducati / Yamaha / Honda / KTM motorcycles that annoying whizzed past me as I fumed in the car. By that account, is there a real viable economic argument to motorsports? What do you think?