WHEN China hosts the Formula One race, it not only puts the country in the global spotlight but the grand prix also helps car makers and auto part suppliers sniff business opportunities in the booming domestic auto industry.
Werner Bruck, manager of the engine division of Pankl Racing Systems AG, was in Shanghai two weeks ago to attend the F1 Shanghai Grand Prix. The world's leading engine components supplier, which provides engine and drive systems and chassis components for almost all F1 teams, plans to set up a representative office in Shanghai to tap the market potential.
The potential involves cooperating with domestic motor sports manufacturers to improve engineering technologies, supplying Chinese high-tech motor sports events as well as selling parts in the after-market sector, Bruck said.
"I know I am a little bit too far ahead. What I dream today might be happening seven or 10 years later in the engineering sector. But the motor sports side and the after-market side will grow quicker," Bruck said.
Pankl has already started exporting its products, including pistons, connecting rods and crankshafts to China through third parties. But Bruck said the business now only generates little revenue.
Bruck's optimism about China's sports motor industry is a reflection of the popularity of motor sports events in China.
Geely Automobile Co Ltd, China's leading private car maker, set up its Asia Geely Formula series in 2005 with an initial investment of one billion yuan (US$133 million) in developing racing cars, said Zhang Chao, director of Geely's AGF program.
The lower-speed formula races, which attracted international sponsors, including Michelin, are part of motor sports in China which also include off-road races and rally races at various levels with domestic car makers and joint ventures of Volkswagen and PSA Peugeot Citroen participating.
Compared with foreign car makers, including Mercedes-Benz, BMW and Toyota, which have participated in motor sports like the F1, World Rally Championships and GT Racing for a long time, Chinese motor sports events are still in their infancy.
"Chinese car makers would also need our help sooner or later," Bruck added with great confidence, playing down competition from the car makers' own R&D teams. He also does not think Pankl's "too sophisticated" products and higher prices are an issue here.
The F1 event has also become the best stepping stone for car makers to apply their technologies ranging from racing cars to mass produced passenger cars as they cash in on China's booming auto market, now the world's second largest.
Some F1 suppliers also take advantage of the grand prix to improve technology before mass application on other products.
An official from Henkel, the adhesive product supplier, said the company spent 2.7 percent of its total revenue to develop new technologies every year.
For BMW, returning to the F1 in 2000 helped it transfer its F1 technologies to the manufacture of its passenger cars. The German car maker applies its special technologies and components in its V8 engine-equipped F1 cars to the production of its M Series cars as well as new generation of models in the future.
BMW also uses the data collected from the F1 races to develop the Internet access and navigation systems found in its premier 7 Series sedans.