As widely expected, the 1 Malaysia F1 team has started sponsorship talks with national oil company Petronas apart from looking into jointly developing a line of engine oils and lubricants.
Team principal Datuk Seri Tony Fernandes confirmed this although stressing that the motor racing team called Lotus F1 by the FIA remains a private venture.
“We would love Petronas to sponsor us,” Fernandes told reporters at the sidelines of the Singapore F1 Grand Prix.
The aviation tycoon who turned around Air Asia into a successful budget airline has hit back at critics of his Lotus F1 Team project saying that and it will be privately funded and there will be no government equity involved nor any government funding.
He stressed that any government support will come in the form of Petronas sponsorship, and a deal with government controlled automaker Proton to license its Lotus brand. The ownership of the team is currently divided between Fernandes and SM Nasarudin SM Nasimuddin, the 26 year old second son of the late Naza group founder Tan Sri SM Nasimuddin.
A third investor, Litespeed UK is also expected to take a stake in the team. Fernandes claimed that the team will be profitable but declined to discuss revenue projections.
He is confident of substantial sponsorship support from the United Kingdom as the Lotus brand is particularly strong there and also expects strong sales from merchandising and a share of the profit from F1.
“There is one F1 brand that sells £150 million worth of T-shirts . We’re monetising the Lotus brand. It is one of the greatest racing brands and nothing invokes the same emotion apart from Ferrari,” Fernandes said.
He added that there will be social returns as the project will encourage Malaysians to think bigger and that not enough recognition was given to the fact that the team managed to secure a place in the prestigious F1 competition.
“Getting a place in F1 is like Malaysia getting a place in the last eight of the World Cup,” said Mike Gascoyne, the team’s technical director who had previously worked for Jordan, Renault, Toyota and Force India.
Fernandes disclosed that he has so far put in about £20 million (RM116 million) of his own money into the project. SM Nasarudin also said he has committed “millions” but declined to disclose actual amounts.
The team has said that it will start with RM168 million in capital and an annual budget of RM308 million.
The license deal with Proton will not involve cash transactions but will ba a “barter” trade - technology and exposure in exchange for use of the Lotus brand name.
Fernandes remained unfazed about other teams with far bigger budgets and remained realistic about the team’s chances as the business plan was designed to take into account the team could come in last.
He said expectations are that the team will finish ninth or tenth initially but moving up to the middle of the pack after about six months.
“Our target is to be the best of the new teams,” he said. “It is not about money. Air Asia had no money but we built a global brand.”
Gascoyne said he is confident of Lotus F1’s prospects as he has succeeded on putting his previous teams on the podium within 20 races.
Fernandes however acknowledged the chances of failure but said that he does not want to wake up one day and regret not taking the risk.“If it fails, yes I will pull the plug but I don’t want to wake up at age 55 and regret that I should have done it,” he added.
The former music industry executive also believed that Lotus F1 will eventually become an ASEAN project and has already started recruiting staff from Thailand for the 225 employees he needs to run the team.
As for other Malaysian sponsors, Fernandes said he is keen to talk to Malaysia Airlines and the Genting group.