The Economic potential of

Prepared By Asad Aftab

MBA(Eve)/1-08/
Submitted to
Prof CDR(Rtd) Aurangzeb

Racers Dream

A Huge Race Track should be built in Pakistan

The Economic Impact of Auto Racing

Section I: Introduction
Background: Politicians, economic developers, citizens, business people, and academics
often do not understand the economic importance of professional sports. This is the case
with motorsports in Pakistan. We are familiar with the amount of money top athletes
make, how much a ticket costs, how much a stadium or track costs, and even the value of
broadcast rights. However, while sports catches and sometimes consumes our attention,
we fail to equate entertainment value with economic value. This report focuses not on the
entertainment value of motorsports but rather on the economic value that motorsports can
generate for Pakistans economy.
Motorsports includes a wide variety of sports that involve the racing of engine powered
vehicles in order to compete against other drivers and pilots. Primarily one thinks of
automotive racing which represents the bulk of motorsports related competition. It is
important to point out that there are other popular categories including truck racing,
motorcycle racing and boat racing.
As motorsports competitions have become increasingly popular, multi-billion dollar
industries have developed around the sports themselves. We are familiar with the
popularity of NASCAR and Indy Car Series in the United States and the popularity of
Formula One in Europe and Australasia. Worldwide a significant amount of economic
output as well as employment is generated yearly by motorsports related industries. The
most obvious sources of such economic activity are the race events themselves that
attract large crowds and generate television and other revenue. Much less visible, but
significantly larger, is the economic activity of different manufacturing and service
industries that take part in the production process of the race equipment and activities.
The economic principles that drive the decisions and choices of motorsports related
manufacturing and service industries are the same as for other industries. There is a
tendency of firms within any industry to cluster in a particular region, also called
industrial agglomerations. These agglomerations have been widely studied by various
researchers and although the origins of cluster theory are not precisely known, Michael

Porters The Competitive Advantage of Nations (New York: Basic Books, 1990) has
widely publicized the use of the term industrial cluster.
An industry cluster is a group of companies that are related through at least one of the
following types of relationships:
1. Buyer-Supplier Relationships
2. Competitor and Collaborator Relationships
3. Shared Resources Relationships
In addition to the relationships mentioned above, geographic proximity plays a key role
in the formation of industrial clusters. These industrial clusters can be observed
worldwide and are found in a variety of industries. The reasons for such clustering of
firms are widely debated but not material to this study. In the specific case of
motorsports, the example of the British motorsports industry is well known and has been
studied by several interest groups. Virtually the entire British motorsports industry is
clustered within a 50-mile radius around Oxford in
Southern England. The region has been named Silicon Valley of Motor Sport or simply
Motor Sport Valley. Approximately three quarters of the worlds single seat racing cars
are designed and assembled in the region. The production of equipment is focused on
Formula One, Championship Auto Racing, Indy Racing League, as well as Rally cars.
Previous Studies: For those interested in previous economic impact studies related to the
motorsports industry, the following is a selection of previous research: The Economic
Impact of the European Grand Prix, which is an economic impact study approximating
the effects of the European Grand Prix on the European Union. The study was conduced
in 1999 by William Lilley II and Laurence J. DeFranco. The Economic Impact of the
2002 FIA Fosters British Grand Prix, which was a report done by the Motorsport
Industry Association in 2003. The National Survey of Motorsport Engineering and
Services, which is a full overview of the UK motor sport industry. The research was
carried out by various universities within the UK. The Economic Impact of the Network
Q Rally of Great Britain, which is an economic impact study of the event conduced by
William Lilley III and Laurence J. DeFranco conducted in 1998. An Impact Analysis of

the Dragons Ridge Motorsports Park on the Economy of New Kent County, Virginia,
Definition of Race Track:
A race track (or 'racetrack' or 'racing track') is a purpose-built facility for racing of
animals (eg. horse racing or greyhound racing), automobiles, motorcycles or athletes.
conducted by Chmura Economics & Analytics in 2003. Hampton Motorsports Complex
Impact Study, which was conducted in 2003 by Frost Motorsports, LLC. USA Motorsport
Market Research Report, conducted by Motorsports Research Associates in 2002.
Economic Impact Analysis Proposed Auto racing Complex in Immokalee, Florida, which
was prepared by Bernhard Weinstein and Terry Clower in 2000. Survey of the
Motorsports Industry in Cabarrus, Iredell and Mecklenburg Counties, 1996 by UNC
Charlotte. The Economic Impact of Lowes Motor Speedway on the Cabarrus, Iredell and
Mecklenburg County Economies, prepared by John Connaughton in 2000. The Economic
Impact of Sports on the North Carolina Economy, prepared by John Connaughton in
1997.

Section II: Review of Literature

History of Race Tracks: There is some evidence of racetracks being developed in
several ancient civilizations, but the most impressive ancient racetracks were certainly the
hippodromes of the Ancient Greeks and the circuses of the Roman Empire. Both of these
structures were designed for horse and chariot racing. The stadium of the Circus
Maximus in Rome, Italy, is an example that could hold 200,000 spectators.
Racing facilities existed during the middle Ages and there are records of a public
racecourse being opened at New Market in London in 1174. In 1780 the Earl of Derby
created a horse-racing course on his estate at Epsom; the English Derby continues to be
held there today.
With the advent of the automobile in the late 19th/early 20th century, racetracks were
designed to suit the nature of powered machines. The earliest tracks were modified horse
racing courses, and racing automobiles in these facilities began in September, 1896, at

Narragansett Park in Cranston, RI. The Indianapolis Motor Speedway was opened in
August 1909.
During the 1920s, many of the races on the AAA Championship were on high banked
wooden race tracks called board tracks.
Modern racetracks are designed with spectator safety paramount, following incidents of
spectator and track marshals fatalities. These often involve run off areas, barriers and
high fencing.

Types of Race tracks:

Concrete (motorsport)-Asphalt (motorsport, athletics)-Grass (horses, amateur

motorsport)

Dirt (automobiles, motorbike (track racing), stock car, horses, greyhound)

Sand (horse, camel, greyhound)-Wood (cycling) (board track racing - now

defunct)-Ice (Ice racing - when on dirt tracks, Bobsleigh, speed skating).

The Beginning of Car racing:

Racing began soon after the construction of the first successful petrol-fueled automobiles
before that time people raced in other vehicles such as horse-drawn buggies. The first
race ever organized was on April 28, 1887 by the chief editor of Paris publication Le
Vlocipde, Monsieur Fossier. It ran 2 kilometers from Neuilly Bridge to the Bois de
Boulogne. It was won by Georges Bouton, in a car he had constructed with Albert, the
Comte de Dion, but as he was the only competitor to show up it is rather pointless to call
it a race. On July 22, 1894 the first real contest was organized by Paris magazine Le Petit
Journal, as a reliability test. The Comte de Dion was first to arrive in Rouen on his steam
car, but a Panhard et Levassor was judged to be the winner.
In 1895, the Paris-Bordeaux-Paris Rally was held and this was the first real race as all
competitors started together. The winner was mile Levassor in his Panhard-Levassor
1205 cc model. He completed the course (1,178 km or 732 miles) in 48 hours and 47
minutes, finishing nearly six hours before the runner-up.

The first regular auto racing venue was Nice, France, run in late March 1897 as a "Speed
Week." To fill out the schedule, most types of racing event were invented here, including
the first hill climb (Nice - La Turbie) and a sprint that was, in spirit, the first drag race.
An international competition, between nations rather than individuals, began with the
Gordon Bennett Cup in auto racing.
The first auto race in the United States took place in Chicago, Illinois. The course went
from the South side of the city, North along the lakefront to Evanston, Illinois and back
again on November 28, 1895 over an 54.36 mile(87.48 km) course, with Frank Duryea
winning in 10 hours and 23 minutes, beating three petrol-fueled and two electric cars.
City to city racing
With auto construction and racing dominated by France, the French automobile club ACF
staged a number of major international races, usually from or to Paris, connecting with
another major city in Europe or France.
These very successful races ended in 1903 when Marcel Renault was involved in a fatal
accident near Angouleme in the Paris-Madrid race. Nine fatalities caused the French
government to stop the race in Bordeaux and ban open-road racing.
1910-1950
The 1930s saw the transformation from high-priced road cars into pure racers, with
Delage, Auto Union, Mercedes-Benz, Delahaye, and Bugatti constructing streamlined
vehicles with engines producing up to 450 kW (612 hp), aided by multiple-stage
supercharging. From 1928-1930 and again in 1934-1936, the maximum weight permitted
was 750 kg, a rule diametrically opposed to current racing regulations. Extensive use of
aluminum alloys was required to achieve light weight, and in the case of the Mercedes,
the paint was removed to satisfy the weight limitation, producing the famous Silver
Arrows.

Categories of Car racing:

1. Single-Seater racing

2. Touring car racing

3. Production car racing
4. One-make racing
5. Stock car racing
6. Rally racing
7. Targa Racing (Targa Rally)
8. Drag racing
9. Sports car racing
10. Off-road racing
11. Kart racing etc.

Formula One
Formula One, also known as Formula
1 or F1, and currently officially referred
to as the FIA Formula One World
Championship, is the highest class of The Formula One logo.
Single seaters
auto racing sanctioned by the Fdration Category
Country or region
International
Internationale de l'Automobile (FIA). Inaugural season
1950
20
The "formula" in the name refers to a set Drivers
Teams
10
of rules to which all participants and
BMW, Ferrari, Mercedes, Renault,
cars must comply. The F1 season Engine suppliers
Toyota
consists of a series of races, known as Drivers' champion
Lewis Hamilton
Constructors'
Ferrari
champion
Official website

www.formula1.com 9

Grand Prix, held on purpose-built circuits, and to a lesser extent, former public roads and
closed city streets. The results of each race are combined to determine two annual World
Championships, one for the drivers and one for the constructors, with racing drivers,
constructor teams, track officials, organizers and circuits required to be holders of valid
Super Licenses, the highest class racing license issued by the FIA.
Formula One cars race at high speeds, up to 360 km/h (220 mph) with engines revving up
to a formula imposed limit of 18,000 RPM. The cars are capable of pulling in excess of 5
g-forces in some curves. The performance of the cars is highly dependent on electronics
(although traction control and driving aids have been banned since 2007), aerodynamics,
suspension and on tires. The formula has seen many evolutions and changes through the
history of the sport.
Europe is Formula One's traditional centre, where all of the teams are based, and where
around half of the races take place. However, the sport's scope has expanded significantly
in recent years and Grand Prix are held all over the world. Events in Europe and the
Americas have been dropped in favor of races in Asia and the Middle East - of the
eighteen races in 2008, nine were held outside Europe.
Formula One is a massive television event, with a global audience of 600 million people
per season. The Formula One Group is the legal holder of the commercial rights. As the
world's most expensive sport, its economic effect is significant, and its financial and
political battles are widely covered. Its high profile and popularity make it an obvious
merchandising environment, which leads to very high investments from sponsors,
translating into extremely high budgets for the teams. However, mostly since year 2000,
due to the always increasing expenditures, several teams, including works teams from car
makers and those teams with minimum support from the automotive industry or other F1
teams, have gone bankrupt or been bought out by companies that want to easily establish
a racing team within the sport.

10

Pakistans participation in International Car Racing:

Pakistan has made its mark in the elite World Cup of Motor Sports by taking part in the
A1 Grand Prix. Nearly 80 per cent of the total population around the globe had watched
the event. Even though Adam khan did not win the first place yet its an honor for
Pakistan that it participated on international level. Pervaiz Musharaf said: "This is a
landmark event for sports in Pakistan, competing in AI Grand Prix; the world cup of
motor sports will help promote Pakistan international image, investment potential and
national pride through a new vision of sport"

A1 Team Pakistan has competed in every season of the A1GP World Cup of Motorsport.
Adam Khan raced in the first and third seasons, with a sabbatical to complete his
university studies in the second season. The 2008/09 A1GP Series continues on the 10-12
April with the sixth round being held at the Algarve Circuit in Portugal.

11

Illegal Street Racing:

It's not an uncommon sight. Two vehicles line-up at a streetlight, one challenges the
other, and once the green light appears they take off as fast as they know how. Illegal
street racing is not a new thing. It's been going on ever since the days of the Model T
Ford. Over the years, speeds have increased and with the advent of cell phones and GPS
systems, so has the technology. But the consequences of these careless actions have never
changed. Thousands of accidents occur each year due to thoughtless, aggressive driving
on our streets. But the trend continues to grow. Movies like The Fast and The Furious
have helped to spread the virtues of street racing. Movies like these don't show innocent
victims getting hurt, but rather they portray the characters as misunderstood good guys
who have a passion for cars. It's easy to see how young people are able to accept the
notion that street racing doesn't hurt anyone when everything they see in movies confirms
it. Videos of illegal street races are downloaded off the web at a growing rate only to fuel
the desires of those who are unable to see the dangers in it. Racing is not a bad thing. In
fact, it's an exciting sport that requires training, discipline and skill. But the streets are no
place for racing. Unfortunately, any young person (the majority are young) can get into
their car, mash the throttle and drive. No experience, no talent, no discipline. All of this
while

innocent

drivers

use

the

streets

for

their

day-to-day

activities.

So what are the solutions? Racing on our streets will never stop, but it can be reduced.
What needs to be understood is that street racing is a social activity. People gather in a
parking lot, hang out with friends, challenge someone to a race, and come back to the
same parking lot once the race is over. Some cities recognized this and have opened drag
strips for people to race, socialize and interact. For a small fee, they can prove themselves
in a safe, supervised environment. This is also a great way to integrate local police with
the participants. In order to reduce racing on our streets, local authorities need to control
it. Larger fines won't reduce street racing. Hundreds of people have died racing on the
streets in this country and if the possibility of death doesn't stop someone, a fine won't
either.

12

In the end we need to understand that the only way to reduce street racing is to provide an
outlet for which it can occur. Until then, the masses will do what they know they'll
continue to race on our street.
Illegal Street racing in Pakistan:
Racers exist in every country including Pakistan. According to city vise distribution,
majority of racers are present in Karachi, Lahore, & Islamabad. In Karachi illegal racing
is held mainly at devils point. But other areas of Karachi are not free from this
undisciplined activity as well. Sometimes the street racing is held at North Nazimabad
area near Hyderi. Racing should be made legal but not on the busy streets of the cities.
Because the traffic police is unable to control the traffic. A race event was organized by
the city Government on 1st march 2009 at Hyderi Main road. Before the proper race was
started, there were 2 accidents happened there, just because of the loose control on traffic
and the race was cancelled and was again held on 22 nd march night on the same place. So
there must be separate tracks for street racer. People here in Karachi are of the opinion
that Give us an empty road and we are ready to race (opinion of majority). Racing is
quite common in Lahore and Islamabad as well. Here are some pictures

UNDERGROUND RACING IN ISLAMABAD (DHA SECTOR FBAHRIA TOWN).

13

PICTURES OF STREET RACING IN KARACHI

14

The only reason street racing exist is due to the absence of a proper race track in our
country. If youngsters are provided a proper platform than this would definitely
discourage street racing. If a proper race track is built in Pakistan than it would not only
act as a source of entertainment for the locals but will also attract foreign attention.
Sponsors of racing events: Several companies organize racing events like RevZone
Motorsports and the Motorsport Association of Pakistan are set to organize a historic
racing championship in Pakistan. The Pakistan National Karting Championship 2007 is

15

the first edition of an annual nationwide kart racing series for the country. Other sponsors
include Radio One FM 91 & CNBC Pakistan Official Media Partner of the entire
championship 2009, Tapal Ice Tea confirms Title Sponsorship for Round 1 of the NKC,
Toyota, Shell Helix Motor Oils are also supportive in this regard. Major events like
Walton airbase show or the dirt bike race, are official stuff organize and sponsored by
companies

Motorsport Clubs of Pakistan

This includes Car Clubs, 4WD Clubs, Desert Rally Clubs, Underground Clubs,
Performance Clubs, meaning all Racing Clubs of Pakistan.
Racing Clubs of Pakistan
Autosport Pakistan (Pvt.) Ltd.

16

Karachi based organization promoting a number of events in the city.

Managing Director: Nadeem Khan
Capital Motorsports Club
Islamabad
based
President: Naeem Murtaza

Club

for

motorsport

enthusiasts.

Freedom Rally
One of the longest established and most professional off-road rallies in Pakistan having
been held annually since 2004. It is held in the Province of Baluchistan on August 14th
the Independence Day of Pakistan.
CEO: Ahmed Iqbal Baloch
Lahore 4wd Club
Lahore based club for off-road and 4x4 enthusiasts.
Motorsports Club of Pakistan
Karachi based club for motorsport enthusiasts having a nationwide membership base.
President: Mohammed Aslam
National Motor Sports
Karachi based organization promoting a number of events in the city.
Managing Director: Vaqar Ahson
RevZone Motorsports (Pvt.) Ltd.
RevZone manages the first purpose-built motorsport facility in Pakistan. RevZone
Motorsport Park is being developed as a multi-discipline and multi-function motorsport
facility
to
offer
a
wide
range
of
motorsport
services.

Methodology
The Data Collection and Analysis is divided into two separate categories
Category 1: Primary Objective: To identify if there is a potential need & Human
Capital available to invest in Auto Racing events.
This portion of research is divided into two portions. One is from racers point of view
and the other is from audience point of view. I have bifurcated this research mainly
because if a race track is built in Pakistan it will not only interest racers but will also
attract race viewers like Formula one viewers therefore analysis of audience was also
important. The questionnaire consists of 11 closed ended questions to get accurate

17

responses. The responses of the target audience to each question are summarized and
presented in a tabulated form.
However, responses of the audience were also observed and analyzed to frame a realistic
picture of their opinions. Thus, an accurate and in-depth observation and analysis was
also conducted in order to measure the interest of the respondents towards the concept of
building a race track in Pakistan.
Category 2: Primary Objective: To Analyze the Economic impact of Auto racing on
Pakistans economy.
This portion of research covers the analysis of secondary data obtained from F1 and
NASCAR database and from Race Event organizers in Pakistan.

SAMPLE SIZE:
A realistic and measurable sample size of 300 respondents is taken. Out of these 300
respondents, 60 questionnaires are filled by racers whereas the rest 240 questionnaires are
filled by race viewers.

18

Questionnaires Analysis

1. Are you aware of racing?

YES
298

No
2

19

Outcome: Almost everyone is aware of Auto Racing

2. Have you ever visited a race track?

YES
200

No
100

Outcome: 66% of the respondents have visited a race track. It should be noted
here that race track here doesnt mean F1 or NASCAR track rather Kart racing
tracks and areas where Illegal racings are conducted.

3. Do you street race often?

YES
200

No
100

20

Outcome: 66% of the respondents have raced. It should be noted here that this
racing does not signifies professional racing conducted at international level
rather street racing or kart racing

4. Is racing dangerous for you rather than entertaining?

YES
167

No
133

Outcome: 55.7% of the respondents think that racing is dangerous and 44.3%
thinks otherwise.

5. Do you agree that racing should be made legal?

YES
250

No
50

21

Outcome: 83% of the respondents think that racing should be made legal. This
shows that there are racers as well as race viewers in Pakistan.

6. If proper race tracks are built in Pakistan would you be

interested in racing?
YES
285

No
15

Outcome: 95% of the respondents are interested in car racing events in

Pakistan.

7. If youngsters are provided a proper platform for racing

then it will definitely discourage street racing, do you
agree?
YES
283

No
17
22

Outcome: 94.3% of the respondents think that Legal racing will discourage the
Illegal racings.

8. Do you think it will be an opportunity for youth to utilize

their talent in racing?
YES
290

No
10

Outcome: 96.6% of the respondents think that Racing is a vital opportunity for
the Youth to utilize their passion and talent.

9. Do you think we have enough money and talent in

Pakistan to harness a club racing series?
YES
250

No
50

23

Outcome: 83.3% of the respondents think that Pakistan has the economic
resources to organize racing event on international as well as national levels.

10.
Race track will have a positive impact on our
economy?
YES
160

No
140

Outcome: Although 53.3% of the respondents claim that racing will improve the
economy however the overall picture suggests an unclear view.

11.
Do you think teenagers of today have more passion
for racing rather than the previous generation?
YES
285

No
140

24

Outcome: 95% of the respondents believe that todays generation has more
potential and passion for racing.

Questionnaire analysis Results

Overall Analysis of Racer All the respondents (racers) take part in illegal or sponsored
races at least once a month. They are of the opinion that racing should be made legal but
not on Public Street because it can result in severe accidents. They believe that no matter
how many circuits we built it can never fully curb street racing & in addition if you are
training a child from an early age than it would promote street racing because younger
generation is more reckless and passionate towards this sports. So training should be done
on a closed circuit with proper safety gear. They believe that racing games like whole
need for speed series especially Underground 1 and 2 acts as a source of learning for
them. As far as race car racing movies are concerned; majority of racers are of the

25

opinion that it has helped them in developing a passion for racing and also provided
information about a lot of things like imported tuner and exotic cars.
Training a child from 10-11 years can make perfect level of racers but majority of the
respondents negate this concept because they think that he or she should be eligible for at
least his/her driving license then the training should be started and as stated above early
training could promote street racing. Majority of respondents (racers and race viewers)
believe that race track will have a positive impact on our economy because if a proper
race track is provided then it will definitely create perfect racers who could compete on
international level thereby attracting foreign attention in form of sponsorship or tourism.
According to respondents if a proper race track is built in Pakistan than they can make a
career out of this opportunity but only if they do proper study of all the theories regarding
automobiles and each and everything and if they are going to chose this as their
occupation, then they must have to be fully involved in this because its a river of
knowledge which never ends. According to respondents that a person should be crazy
about this to come in this field, otherwise its waste of time and money. If we talk about
status symbol than we find a mix of opinion of people. Some believe that racing doesnot
portrays your status symbol because the racing is just a scene. You are not out for racing
all 24 hours. Status symbol is with your education, your family background etc. But race
viewer are of the view that it does because sometimes you are judged by the car that you
have like whether you have civic or ferrari. Majority of repondents think that
infrastructure is more important every time because we all better know that where we are
standing among other nations of the world. Race tracks could come later on.
Overall analysis of Race viewers:
The opinion of viewers differs a bit from the opinion of racers. The main reason for
this difference is the age group (see methodology, demographic of racers & viewers).
As far as viewers are concerned; almost all of them are aware of racing & majority
have visited the race track but they havent taken any part illegal street racing or
sponsored racing reason simply being that they think its dangerous rather than
entertaining. This is the view of previous generation (age group-30 to 35) and mainly
because they are concerned about their family that incase of any mishap during the
race what would happen to their family. The younger generation (age group-18-29)

26

has more passion for this sport therefore they race occasionally like once or twice
after every six months or a year thereby fulfilling their passion and promote this sport
as viewers as well. They all think that racing should be made legal but in a proper
way like a race only on a race track. Majority of people consider racing as dangerous
therefore they think that security concern will be breached while building a race track
here.
Majority of people consider that government of Pakistan has a major role in assisting
the idea of race track. Because if government will support this idea of race track than
it will boost up the sports activity in our country. Racing as a sport will be promoted
properly and serve as a source of entertainment for all.
In comparison to the views of racers the views of these respondents (race viewers)
differs a bit because racer believe that illegal racing can never be eliminated but the
viewers believe that if a proper race track is built it will reduce street racing to a
certain extent because the racers would then be interested in racing on a proper
platform rather than on streets. Also majority of respondents believe that if a race
track is built than racers will be able to utilize their talent and skills and can even
make a career out of this opportunity. Once these racers become professionals, they
can promote Pakistan on international level by taking part in Formula One or A1
Grand Prix.
Many respondents believe that car racing is feasible with safety riding concept in
Pakistan either because they are not aware of those safety measures or fail to follow
them because of their reckless behavior.
As far as car racing movies and games are concerned, both the racers and the viewers
believe that it has increased the passion of racing among youngsters because
American mass media is quite strong in this era, the quality and the graphics of their
movies are the main reason for its success. Many youngsters follow these movies and
try to portray the same picture in form of their actions. In short (according to majority
of respondents) racing movies & games have developed an urge to become a racer in
todays youngsters therefore they are more passionate than the previous generation.
Majority of respondents believe that if a responsible driver can become a responsible
racer tomorrow however the racers beg to differ in this regard. The racers believe that

27

if the driver is responsible he would hesitate taking risk or crossing he boundary of

safety riding concept therefore he cant become a racer unless he is willing to give
100% in this field.
The viewers agree that if we start now we can build a race track as huge as ours in the
next 3 to 4 years. But the racers believe that if we start now it is not going to take 3 to
4 years but this task can be accomplished within a year, and once the track is built
different types of racing can be arranged to enhance the ability and skill of those
racers because we do have the racers whos abilities and talents are required to be
polished (according to majoritys opinion).
For both the racers and the viewers developing the infrastructure of the country is far
more important than investing it on infrastructure because we are a developing nation
and infrastructure represents our country more than a race track. So attention should
be given towards the development of infrastructure rather than on race track.
The most important question that was been asked to the viewers (respondents) was
that if a race track is built in Pakistan would they be interested in Racing; the answer
we got was a definite YES from almost all the respondents. This shows that even
though most of them have never raced but they do have a passion for this sport
Outcomes:

Most People are aware of Racing.

There is significant talent and passion for racing in Pakistan.

Most people often race and want Auto racing to be legal and Pakistan
should participate in race event on international level as in Formula one
and NASCAR.

If a proper platform is provided than Illegal racing (which is a major

reason for road accident) will be discouraged.

Through advertisement and foreign investment in Auto racing economy

can improve.

Category 2 Analysis of Economic Impact

CAREERS IN AUTO RACING

28

Median annual wages for selected occupations in the spectators sports industry, May
2010
Median annual
Occupation
wages
$78,320

Mechanical engineers
First-line supervisors and managers of mechanics, installers,
and repairers

$67,960
$54,750

Automotive body and related repairers

$52,870

Painters of transportation equipment

$51,160

Automotive service technicians and mechanics

Machinists
Helpers of installation, maintenance, and repair workers

$45,060
$23,780

(Bureau of Labor Statistics-US)

Formula One Grands Prix Generate More Revenue per

Event than Any Sport in the World
29

Formula ones Statistics:

2009
Revenue from Fee 680m
(278m broadcaster fee, 278m-GP Promoters) + Series Sponsors
-Australian

Sales Revenue (ticket selling only) USD 13.09m

Prix event
Sales Revenue (ticket +
Motorcycle Grand Prix race

corporate

No of Viewers

(64% Asia, 36% Europe)

2.5billion

suites)

RM

Grand

2.705m-Malaysian

Shanghai Circuit cost USD 300m

Istanbul Park Circuit
USD 150m
2006/07 Season
Total Revenue USD 3.9 billion
(Commercial Rights Revenue + team revenues + Circuit revenue)

Revenues and Profit:

Formula One is profitable for most parties involvedTV channels make profits
from broadcasting the races, and teams get a slice of the money from the
sale of broadcasting rights and from the sponsor's logos on their cars.
The cost of building a brand new permanent circuit like that in Shanghai,
China can be up to hundreds of millions of dollars, while the cost of
converting a public road, such as Albert Park, into a temporary circuit is much
less. Permanent circuits, however, can generate revenue all year round from
leasing the track for private races and other races, such as MotoGP.
OUTCOME: Cost $300m < Revenue 680m

(Auto Racings profit exceeds its cost)

Conclusion
By combining the above two analysis we can conclude that if a race track is built in
Pakistan it will boost up our economy, create career opportunities for racer, Reduce
illegal street racing to a certain extent, promote sports activities in Pakistan, and portray a
good image for the country on international level. Hence the potential of auto racing
industry in Pakistan is high
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