Motorsports Market - Forecast(2023 - 2028)

The Motorsports Market size is set to grow at a CAGR of 10.2% during the forecast period 2022-2027 to reach $12.9 Billion by 2027. Growth in the formula racing format for electric vehicles, rising revenues in the Formula One racing championship and growing popularity of motorsports among millennials through broadcasting and social networking platforms have boosted the motorsports market. Factors such as an increase in the number of races, advertisements and sponsorships are driving the motorsports market forward. Huge investments are done by the sponsors as these sports events are an ideal platform for the companies to promote their products. This racing entertainment attracts spectators and generates revenue for its products. Increasing safety features in auto racing vehicles, increasing promotional activities coupled with rising investments by sponsors across the globe in formula racing and drag racing as well as rallycross would propel the market growth during the forecast period. Changes in the motorsport regulations such as limitations on the number of combustion engines, powertrains, turbos & MGU-Hs and others as a key focus towards driver safety, the introduction of Apps, streaming platforms and improved graphics for revolutionizing fans experience and other key trends in the motorsport industry will impact the growth of the market in the coming future.

The report: “Motorsports Industry Outlook – Forecast (2022-2027)” by IndustryARC, covers an in-depth analysis of the following segments in the Motorsports industry.

By Race Series: Formula Racing (Formula 1, Formula E, IndyCar, Formula 2 and Others), Stock Car Racing (IMCA Modified Championship, NASCAR, ARCA Menards Series, Super DirtCar Series, Others), Sports Car Racing (WeatherTech SportsCar Championship, Blancpain Endurance Series, WEC, Intercontinental GT Challenge, Trans AM Series, Blancpain Sprint Series and Others), Touring Car Racing (World Touring Car Championship, BTCC, DTM, Others), Sprint Car Racing (Lucas Oil ASCS Sprint Car Series, World of Outlaws and Others), Hill Climb Racing (FIA European Hill Climb Championship, FIA International Hill Climb Cup, British Hill Climb Championship, Championnat de France de la Montagne and Others), Off Road Racing (Lucas Oil Off Road Racing Series, TORC: The Off-Road Championship, SCORE International, Best in the Desert and Others), Rally Racing (WRC, APAC Rally, European Rally, Dakar Rally, ARA Rally and Others) and Others.
By Channel: Broadcasting, Ticketing, Race Host Fees, Advertiser/Sponsorship, Merchandising and Others.
By Geography: North America (U.S., Canada, Mexico), Europe (U.K, Germany, Italy, France, Spain, Russia, Netherlands, Belgium, Turkey, Austria and Others), APAC (China, Japan, South Korea, India, Australia, Malaysia, Thailand and Others), South America (Brazil, Argentina, Others), RoW (Middle East, Africa).

The formula Racing segment held the major market share in 2021, with a market share of 38.2% of the Motorsports market size and is estimated to reach $4374.3 million by 2027, with a CAGR of around 10.7% during the forecast period 2022-2027. The growth is mainly attributed to a rising partnership of brands and television rights holders, the emergence of new sporting power, a greater fusion of sports and entertainment, rising popularity of live sports on OTT and social media platforms. In March 2020, the Renault F1 team and DP world have signed an agreement making DP World the global logistics partner and the title partner of the team which will become the Renault DP World F1 team. The partnership helps explore opportunities to increase the efficiency of their supply chain including improved powertrain and engine development. In April 2020, Disney revealed plans to acquire Formula 1 Racing from Liberty Media for over $4 billion. Liberty Media has sold off its ownership of the sport after just three years at the helm. This acquisition was done with a vision to rebuild the program layout as a part of making the sport more entertaining. Furthermore, Touring Car Racing was analyzed to witness the highest growth with a CAGR of 15.9% during 2022-2027. The growing adoption of aggressive digital strategy in world touring car championships such as the introduction of a new interactive show with WTCC drivers on each event exclusively for digital broadcasting is welcoming a larger audience and recruiting new generation of fans. Factors like the incorporation of new program formats are analyzed to fuel the market growth in future years.

The broadcasting segment is analyzed to acquire a market share of 28% of the motorsports market size by 2027 and is estimated to grow at a CAGR of 9.9% during the forecast period 2022-2027. Motorsports broadcasting service includes live-streaming, recorded videos or highlights of the competition through television or OTT platform. The burgeoning demand for high-speed access to watch all racing events including NASCAR, NHRA, MotoGP, F1, Indycar, ARCA, WRC, WTCC, WEC, Superbike, Supercross, Motocross, Ferrari Challenge, Supercar and much more live streaming at a very affordable price has increased the adoption of premium subscription services. Meanwhile, a host of Chinese companies are investing in events, broadcast rights, teams, facilities and leagues at home and abroad, as encouraged by the government. Along with this, rights holders, brands and broadcasters increasingly exploring new formats and scheduling events, which in turn is contributing to the growth of the market. Broadcasters and media channels arrange rights agreements directly with the individual sanctioning bodies. Broadcasters receive revenue from corporate sponsors and advertisers for promotional airtime during race events. Strong television performance and the ongoing popularity of motorsports events are important because they help drive incremental advertising revenue. In addition, broadcasters play a significant role in promoting the sport by providing strong graphics, production values, music and talent, which all add to an exciting broadcast experience for fans..

Europe dominated the Motorsports Market in 2021, with a market share of 38.4% in 2020 and estimated to reach $3609.4 million by 2027, with a CAGR of 8.2% during the forecast period 2022-2027. This growth is mainly driven by increasingly sophisticated and tailored content strategies for each major platform and the emergence of social media and OTT platforms as broadcast channels in this region. In October 2021, The International Automobile Federation (FIA) announced its new plan of developing motorsport in Africa, to improve motorsport across the continent by strengthening the operational foundations for future events, implementing legacy projects and boosting commercial partnerships. Such developments will accelerate the growth of this market during 2022-2027. In August 2021, IQOO, a sub-brand of Vivo, announced being an official partner of German-based, BMW M Motorsport for the 2020 Deutsche Tourenwagen Masters (DTM) Season. After this partnership with BMW, the brand seems to be laying the foundation for its official launch in the European region. Such developments are anticipated to accelerate the growth of the motorsport industry in Germany during the forecast period. The roW is analyzed to witness the fastest growth, around a CAGR of 13.4% during the forecast period 2022-2027, due to the growing popularity of motorsports and entertainment activities. In June 2020, Motorsport Network announced its further expansion in the Middle East and North Africa region, with a Joint Venture with Triangle Media. In 2020, there were two F1 Grands Prix in Abu Dhabi and Bahrain, MotoGP in Qatar while Saudi Arabia added the legendary Dakar rally in 2020 to its roster that already includes the Riyadh Formula E race.

Motorsports events generate a huge amount of revenue and contribute towards economical development, which is a major growth driving factor of this market. In July 2021, the International Automobile Federation (FIA) revealed that the motorsport industry contributed an annual $188.2 billion of business to the global economy. The growing popularity of motorsports among people creates a positive impact on revenue. According to another report by FIA, motorsports is one of the most watched sports worldwide and is one of the fastest-growing spectator sports. Grand Prix sports events had an annual attendance of more than 4 million in 2019, while 8 Grand Prix events had more than 200,000 spectators. The weekend attendance went up by 1.75% and the Sunday attendance was up by 4% compared to 2018. Such high popularity of these sports creates various ways to generate higher revenue. This in turn drives the growth of this market. In November 2021, Formula 1 owners announced that more than a quarter of a million people have already registered for pre-sale tickets for the inaugural Miami Grand Prix, which will take place around May 2022, where the planned audience capacity is around 80,000. The FIA report of July 2021, shows that the motorsports industry added $79.1 billion in total value through the goods and services including official merchandise, produced by the motorsport industry.

Amidst the Covid-19 breakout, many motorsports organizations were adopting many new business models including organizing virtual racing events to overcome, a difficult situation where fans were not able to enjoy these events like before, which in turn will create more opportunities for the motorsports market during the forecast period 2022-2027. For instance, in January 2021, F1 announced about the return of Virtual Grands Prix 2021 after a record-breaking year for the F1 Esports Series. The F1 report also states that virtual racing witnessed a total of 11.4 million live stream views across all digital platforms, which represented a 98% increase from 2019. Similarly, in September 2021, Porsche launched Gran Turismo Cup Asia Pacific virtual auto racing. The involvement of well-known famous champions from past and present days makes these events more popular among the fans. Furthermore, the prize money from these events goes straight to the charitable trusts, which also affected the involvement of the fans and drivers as well as other celebrities positively. A report states that more than 30 million people tuned into the Virtual Grand Prix series 2020 to see F1 stars, sporting icons and music chart toppers represent the ten F1 teams in eight live events that replaced the official calendar, as the real-life auto racing stopped due to the pandemic.

Even though the motorsports market is growing over the years, but the associated environmental risks are creating hurdles to the growth of this market. These motorsports vehicles cause air pollution as well as noise pollution and create negative impacts on the environment. For instance, according to a report of the International Automobile Federation (FIA), published on December 2019, environmental risk is one of the major challenges faced by the F1 motorsport market, as the F1 driving activities produce around 256000 tonnes of carbon dioxide annually. The audit conducted by the FIA also states that the total carbon dioxide generated by the F1 motorsports in 2019 reached 1.9 million tonnes per year, after including the pollution created by the fans of this sport. Such negative impact of these sports events on the environment will create hurdles for the growth of this market during the forecast period 2022-2027. However, the rising adoption of electric vehicles for such motorsports events and various initiatives taken by the FIA to reduce the emission level of F1 is assisting in offsetting this challenge during the later stages of the forecast period 2022-2027.

Product launches, acquisitions and R&D activities are key strategies adopted by players in the Motorsports market. The key players in the Motorsports market include

In June 2021, Ferrari S.p.A. has signed an agreement with Amazon Web Services to become their official cloud, machine learning and artificial intelligence provider. The agreement will bolster the performance and design of its exotic racing and street cars by taking advantage of the computing power of the AWS cloud.

In January 2021, McLaren Racing and Formula E have signed an agreement to enter the ABB FIA Formula E world championship and manufacturer line-up from the new Gen3 era.

In March 2020, the Renault F1 team and DP world have signed an agreement making DP World the global logistics partner and the title partner of the team which will become the Renault DP World F1 team. The partnership helps explore opportunities to increase the efficiency of their supply chain.