Tag Archives: Michelin

Formula E: Raising the Bar in Motorsport Sponsorship

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Season Four of the FIA Formula E World Championship resumes this weekend with the third round in the calendar coming from Marrakesh. As the first major motorsport event of 2018, now is a good time to reflect on the success of the championship and explore how Formula E’s approach to partners is changing the face of motorsport sponsorship.

As motorsport goes, Formula E is a Championship still very much in its infancy. When considering the achievements of the championship, this fact is something many forget. Over three seasons Formula E has established a global audience in excess of 200M, this compared to Formula One which using the same metrics reported an audience of 350M across 2017 is hugely impressive. On average, Formula E appeals to a younger audience, with a gender split whilst still leaning towards males is far more balanced than any other form of motorsport. The city-centre, single day format has proven successful, as have affordable ticketing policies. Attendance of an ePrix is successfully positioned as a family event.

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The level of manufacturer support Formula E has achieved since its inception has exceeded all expectations. Championship management targeted 4-5 OEMs to have committed to the championship by season five. With DS, Jaguar, NIO, Mahindra, Audi, Renault (set to run as Nissan from next season) Venturi, BMW, Mercedes, and Porsche now involved, the championship finds itself in the position of having the most manufacturer-backed entries in any form of motorsport. Of course championship management acknowledge manufacturer support is cyclical, but Formula E represents a unique platform for manufacturers to showcase Electric Vehicle technology in a cost-controlled environment. The appeal of the championship goes beyond racing, Formula E gives manufacturers access to an audience demographic they would otherwise struggle to connect with. There is every reason to expect the current level of manufacturer support to be sustained.

Season Five will see the most significant change in the championship to date. In a bid to keep team costs under control, Formula E limits the development of components on a season by season basis and in some cases mandates the use of standard equipment across all teams. Through season five, two of the most significant standard elements will be upgraded, in the battery and the car itself. Whilst both elements will remain standard items, significant improvements in battery technology will remove the requirement for a mid-race car change, alongside delivering a sizable increase in performance. With the new car, Formula E promises to amaze fans with a futuristic design incorporating FIA mandated cockpit safety structures in a fully integrated design concept. The new look championship promises to leave other forms of motorsport looking old-fashioned by comparison.

Following the lead of Mumm Champagne, long time partners of Formula One including Allianz and Hugo Boss continue to transition towards Formula E. This shift is due in part to the way in which Formula E engages with its audience and has positioned itself at the forefront of the conversation around Electric Vehicles. The technology demonstrated within Formula E is perceived to be of greater relevance to the future of the automotive industry and as a consequence, has positioned itself as a sport which a broad and diverse audience can engage with. Free from shackles of history, the Formula E message evolves with it’s fans. This open and dynamic approach sits well with the marketing teams behind the championships growing list of partners and continues to attract new partners to the sport.

Formula E and its approach to fan engagement has not gone unnoticed.  2017 saw Formula One announce a partnership with premium partner Carbon Champagne. In attempts to build awareness of the F1 – Carbon Champagne partnership, CEO, Alexander Mea has acknowledged taking inspiration from the Formula E podium celebrations. Carbon have already employed ideas such as the use of a DJ to build atmosphere around the podium (as seen at the Mexican Grand Prix), to branding the cool down room and presenting drivers through the crowds to increase visibility. Formula E and its partners have inspired the established brands to up their game to maximize any return on investment.

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Engagement extends far beyond the podium ceremony, for race attending fans the eVillage supporting every ePrix provides an area for championship partners to engage with fans, delivering both tangible sales and the ability to build brand awareness. Formula E encourage championship partners and local partners to embrace the eVillage and its captive audience of fans. Beyond the eVillage is the The EMOTION Club.  Formula E’s unique take on the VIP paddock life experience. In contrast to other forms of motorsport where team and championship guests are hosted in separate motorhomes or paddock buildings, Formula E, through the EMOTION Club, have created a shared environment in which all guests and partners are together, facilitating an environment which truly lends itself to the development of new business to business partnerships and allows guests to maximize their experience from both an entertainment and commercial perspective. Formula E has always been keen to ensure all brands and partners involved with the championship have every opportunity to maximize their position in the sport. Success in this open approach is evidenced by the fact that to date, all partners joining the championship have chosen to renew and extend their commitments.

Another great asset of Formula E is its relationship with the media.  Of course the sport has it doubters and critics, but media reporting from within the championship hold Formula E in high regard. Motorsport will be criticized irrespective of any decisions taken, but Formula E seeks to balance this by engaging with the media, explaining the strategy of the championship, ensuring a feeling of inclusion and community. Many journalists have been a part of the championship from the very beginning, they feel part of the championship and their value in its continued growth does not go unnoticed by championship management.

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With the imminent announcement of title sponsorship of the entire Formula E Championship, Formula E management can be proud of what has been achieved. Formula E continues to outperform rival motorsport championships in terms of its reach and engagement. Founding partners including Qualcomm, DHL, Michelin, and Mumm Champagne continue to be rewarded for their willingness to embrace a new form of motorsport. As the championship grows, so will their return on investment.

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Formula One : The Future of Pirelli in F1

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Pirelli returned to Formula One in 2011 as the sole tyre supplier and official championship partner. Pirelli, founded in Italy, recently acquired by ChemChina, joined the championship with a clear mandate from Formula One Management to ‘spice up the racing’ through the development of a range of tyre compounds with significant performance variables and accelerated levels of degradation. Initially, this new philosophy around tyre performance at the pinnacle of motorsports was well received with a positive response from fans and media around a new element of unpredictability surrounding an F1 weekend.

However, as teams and drivers adapted to the Pirelli approach to tyre compound chemistry, car set up and driving techniques evolved to minimise the challenges the tyres presented. This led to increasingly aggressive approaches to performance and degradation levels in tyre development culminating in the “challenging” 2013 British Grand Prix in which teams were supplied with tyres which were not capable of performing at the levels required. The result of which was a race which saw numerous failures throughout the field and a strategic re-evaluation from Pirelli.

In the seasons since 2013, Pirelli has maintained the vision of producing a range of compounds with varying levels of performance and high levels of degradation but with a more conservative approach. The result of this restraint has been races in which teams and drivers focus on tyre management over performance, understanding the optimal approach to a race has often been to extend the life of a tyre rather than push it to its limit. As such, in recent seasons, drivers have rarely complimented the performance of Pirelli’s efforts over a Grand Prix weekend.

Creating positive media coverage in a sole supply situation will always be a challenge. Since there is no competitor to beat, victory becomes the default leaving the only newsworthy coverage that of failure.  In such an environment it can be a challenge to understand how Pirelli quantify benefits from its sponsorship of Formula One. Over seven seasons they have developed a reputation for producing tyres with excessive degradation and minimal differentiation beyond coloured side walls. Would an F1 fan seriously consider buying Pirelli tyres for their own car based on how they perform in Formula One?

So where does this leave Pirelli?

At the end of each season, Pirelli produce an end of year summary detailing all every fact and figure imaginable around; corning speeds, top speeds, lap times, number of overtakes, number of compounds used by each driver and the figure which stood out to me the most, the number of sets of tyres produced in a season.

In 2017 Pirelli produced 38,788 sets of F1 tyres, which equates to approximately 3,258 tons of tyres. Of these, only 12,920 sets (1,085 tons of tyres) were actually used. This means two-thirds of F1 tyres produced in 2017 were never raced and simply destroyed. Whilst Pirelli makes it clear all tyres were recovered, a system in which such a vast number of tyres are produced and shipped around the globe and never used is hugely wasteful and frankly embarrassing for both the manufacturer and the sport. The strategy of an ever-increasing range of tyres being made available for a Grand Prix weekend has resulted in the requirement of an inefficient and cumbersome supply chain. Something which will only increase in 2018 with further tyre compounds and team selection freedoms being added to the Pirelli ‘menu’.

In recent years Michelin, a leading industry competitor, have repeated statements that the current philosophy of Formula One around the use of tyre degradation as a key variable in racing, is of limited strategic merit and is not in keeping with how they believe tyre technology should be presented in motorsport. Instead, Michelin has focused their efforts in Formula E and the World Endurance Championship, showcasing innovations around all-weather tyres, low profile tyres (18-inches, compared to the 13-inch profile used in Formula One), and minimal degradation allowing competitors to push the performance of a tyre throughout an event.

Increasingly Formula One and its regulations are focused on reducing unnecessary waste. limiting fuel use through a race, and limiting the number of power units available to a team through a season. This focus on efficiency appeals to existing OEM’s in the sport including Mercedes, Renault, and Honda, and again sits in contrast to the wasteful and confusing approach mandated to Pirelli. For the 2018 season there is no longer any opportunity for Pirelli to change their approach to racing, but with minimal technical regulation changes set for 2019, perhaps the management of Formula One should look to change the conversation around Pirelli’s role in F1 and encourage the manufacturer to innovate relevant style.

For 2019, perhaps Pirelli should look to consider a simplified approach to tyre compounds, produce tyres with increased variance in performance yet minimised levels of degradation, and adopt 18-inch low profile tyres, enabling the end user to better relate to the product they see racing on a Sunday.

It is understood 2019 is the final season of Pirelli’s current agreement with Formula One. Without change, will it be their last?

Formula E – Michelin confirmed as sole tyre supplier through to season 5

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The World MotorSport Council (WMSC) confirmed Michelin as the single tyre supplier for the FIA Formula E Championship. The contracts will cover Seasons 3 (2016-2017), 4 (2017-2018) and 5 (2018-2019), subject to the finalisation of the corresponding agreements.

Full report here.

Opinion: A contract extension that was never really in doubt. Michelin’s supply to Formula E demonstrates long lasting tyres don’t negatively impact racing. Quite the opposite in fact. Other racing categories would do well to pay attention. Also interesting that the FIA announce tyre supply for this series and yet don’t appear to be the decision makers in other categories.