THE financial woes of two Oxfordshire-based Formula 1 teams are likely to have a negative effect on the local motorsport industry, according to sector experts.

But the impact will be limited due to suppliers diversifying their businesses in recent years.

Administrators were appointed to the Marussia F1 Team, in Banbury, on Monday, while Caterham Sports Limited, which designs and builds cars for the Caterham F1 team and is based in Leafield, went into administration last week. Each company has about 200 employees.

Chris Aylett, chief executive officer of the Motorsport Industry Association, said: “If the worst happens, yes, it will have an effect. Will it have a vast effect? No, because they don’t employ that many people.”

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Mr Aylett estimated Marussia and Caterham each generate about £50m to £60m in annual turnover and each have about 20 to 30 primary suppliers.

However, he said, over the past five years many motorsport suppliers had diversified their customer bases in response to concerns about the F1 competition. “Formula 1 is a high payer but is a more risky payer,” he said.

Suppliers have branched into other motorsports – such as the World Rally Championship, IndyCar and NASCAR – as well as the automotive, defence and aerospace industries. Now, 80 per cent of UK motorsport suppliers’ business is exports.

Mr Aylett said that about one-fifth of the approximately 4,000 motorsport suppliers in the UK were based in Oxfordshire, which is known as “motorsport valley”. Suppliers gravitated to the region because four of the 11 F1 teams were based in the county: Marussia, Caterham, Williams and Lotus.

While the UK motorsport industry was worth about £9 billion a year, about £2 billion was linked to F1, he said. “The centre of the economic activity is in motorsport valley.”

Peter Whyman, sales and marketing director of Zircotec, in Abingdon, said of the two F1 teams’ administrations: “It will obviously have an impact on the motorsport economy throughout Oxfordshire.”

Zircotec supplies ceramic and metal coatings for carbon composites to 10 of the 11 F1 teams, although Mr Whyman said he was “not at liberty” to reveal which teams.

He said Zircotec, which has just won an Innovation in Materials Award from trade body Composites UK, had deliberately diversified further into the general automotive industry to minimise the firm’s exposure to the “seasonality” of motorsport. “It has been our plan to level out our production over the year,” he said.

Peter Jackson, general manager of MoTeC Europe, in Banbury, said his firm did not supply F1 because of the risk involved. When you’re in F1 they’re so demanding almost your entire business is tied up with that,” said Mr Jackson. “If teams go into administration, suppliers could be owed a significant sum.”

Ben Sayer, public relations manager of Prodrive, said the Banbury-based technology and carbon composite materials supplier had considered but stayed out of F1. “You need very big budgets to be competitive in F1. As in premiership football, only the top four or five teams have any real chance of winning,” he said.

“Clearly, what has happened to Caterham and Marussia will have an impact, but we just have to wait and see what that impact is.”

Caterham’s administrators Smith & Williamson said: “The administrators are in discussions with a number of interested parties regarding the sale of the assets of Caterham Sports Limited.

“These are serious enquiries, however anyone wishing to buy the Caterham F1 team needs to be an operator of substantial financial means. We see the Leafield site as an extremely important and integral part of the service and capacity offered for sale and it includes some very specialist installations and facilities.

“We are doing the best we can to secure a positive outcome for creditors and all stakeholders.”

FRP Advisory, which was appointed administrator for Marussia, declined to comment when asked.

 

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