Sunday, September 09, 2007

Mallya's Spyker deal is not just hype and glory

Not many would have sensed the spirit behind Vijay Mallya’s co-investment in Skyper, a Formula1 team. Knowing his penchant for high life and fast cars, may be it just got swept aside as just another Mallya indulgence.

Yet it appears the deal between Vijay Mallya - Chairman and CEO of Toyota sponsor Kingfisher Airlines – and Dutch entrepreneur Michiel Mol - Spyker’s Formula One Director might just make incredible business sense.

Here’s to why. It might just give a uniquely high-impact advertising forum by providing sustained brand visibility for the 90-odd minutes of a race. Importantly, given the increasingly stringent limits in Europe on liquor and tobacco advertising — two significant Formula 1 income-earners — the sport is making inroads into Asia. China and Bahrain are recent entrants to the calendar, Singapore follows next year and, who knows, it may be India after that (Mr Mallya heads the local racing body). These will provide Mr Mallya with an entrée into high-value Asian markets to grow his airline and liquor businesses.

Especially after Narain Karthikeyan raised the profile of Formula One racing in India when he became the first Indian to compete in a Grand Prix with Jordan in 2005. Now Mallya believes his purchasing Spyker could boost it still further. With a local hero behind the wheels, the Indian viewership also might shoot up. If anything, that could be a bonus of sorts.

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