The Economics of Building a Racetrack

Building a race track used to be fairly simple. If you owned a plot of land big enough to accommodate one, and you had the consent of your local government, then you were most of the way there. A bit of elbow grease and some safety measures, and you could basically start hosting races. As time, and a few lawsuits, passed, states and regions started having tighter restrictions on building a race track. In addition to the costs of land, you needed to factor in amenities and other concerns the public expects at a track. The economics behind building a race track today are quite complex, it takes engineering minds like Robbie Dickson.

How Much Land do You Need?

Let’s begin with the actual land you have to build on, which carries some caveats. It’s not as simple as mapping out each turn and straightaway, you’ll need to factor in whatever the city needs on your track, which will significantly expand (usually) or decrease the size you have to work with. That means more of your budget going toward real estate. A good sized track can cover anywhere from 500 to 1500 acres, increasing as regulation increases. What does that mean? Be prepared to add a clubhouse, multiple garages and anything else your local region says that you need in order to accommodate your guests. Dickson’s group negotiated a lease with the Osoyoos Indian Band, and immediately went to work. One of the founders owned a construction company, so they got the excavations started fairly quickly. The company used GPS guided earth movers to get the layout of the track just right, and 12,139 feet of concrete wall space keeps racers safe on the track.

Your Target Market

Finally, you have to have a target market in mind. Dickson built a true F-1 experience in Canada. It’s not easy to get out and drive your car to the fullest in the snow, so a race track designed for true racing fanatics was like a promise unfulfilled. Dickson knew his kind existed, he just didn’t know how to find them. The answer was to give them a place to gather, and that’s why it’s so important to build something unique and alluring. To solve both of those challenges, he turned to Jacques Villeneuve, Canadian F-1 driver, who shared his dream of creating a true race track experience in Canada.

Under Dickson, Area27 became more than a track. He installed a clubhouse, a spa, a private lounge and a full time restaurant for true immersion. When Dickson’s work was completed, one could move into Area27 and receive full service without ever leaving the track. By encouraging car owners to get out and meet one another, Dickson has created more than a business venture for himself. He’s established a community, which is how race tracks last.

Basic Costs

So, after you’ve evaluated your land, what kind of basic costs are you looking at to make the track work on a practical level? You can’t just use cheap materials on a race track, first and foremost. For Area27, Dickson’s team did more than one pass through, layering asphalt for a perfectly levelled surface with minor gradations. Everything from temperature changes to levelling of the ground can affect a turn. It required their team spending upwards of 10-12 hour days getting it just right.

Chevrolet: One of The Great American Car Brands

By Phin Upham

American cars have a uniquely American swagger about them, and it’s common for people to debate over which ones are the best ones. Among those hardcore fans, there are always two major houses that stand the tallest. Ford and Chevrolet. Both have a long standing history in the automotive world, and both are still driving forces in the industry today.

The company many of us refer to as “Chevy” began in 1911. It was started as a division of General Motors, another important name in American automotive manufacturing. Louis Chevrolet started the company with William C. Durant, and the two were so successful that Durant purchased General Motors in 1918 in a reverse merger. This was important because Durant was reclaiming his spot in GM’s corporate history as its president.

His tenure lasted only a year before he was ousted a second time in favor of a man named Alfred Sloan. Sloan chose Chevrolet as his flagship brand, and he decided to compete directly with Henry Ford by manufacturing mainstream cars meant for the every man. At the time, Ford’s Model-T was the best-selling car in the United States and Chevy intended on beating that.

Whether they did or did not is a question best left up to auto enthusiasts, but it’s clear both companies were wildly successful. Today, GM cars are marketed and sold all over the world. One can buy a Chevrolet in Europe, thanks to a recent re-launch of the brand in 2005, and you can even find Chevys in Russia.

Phin Upham is an investor from NYC and SF. You may contact Phin on his Phin Upham website or LinkedIn page.

Hyundai: Corporate History

Written by Phin Upham

In 1947, Chung Ju-Yung founded an engineering and construction company he called “Hyundai.” It took twenty years for Ju-Yung to go beyond construction and into motorcars, releasing his first in partnership with Ford in 1968. But Hyundai wasn’t satisfied with resting his company laurels on this joint venture.

He hired George Turnbull along with five other top British automotive engineers. They designed and built the Pony, a small 4-door sedan that used rear-wheel drive to get around. The first exports went to Ecuador, then to Benelux.

Hyundai brought the Pony to Canada in 1984, but the vehicle couldn’t pass the strict emissions standards set by America. The Pony quickly became the top selling car in Canada, and Hyundai rolled its one millionth car off the assembly line in 1985.

A year later, Hyundai brought the Excel to the United States. Fortune called it the tenth best product of the year, owed almost entirely to its affordability. The Sonata, a line that continues today, went into production in 1988. By ’91, the company had developed a proprietary gasoline engine it called the Alpha. It also built its own transmission, which helped to create technological independence for Hyundai.

An Indian division began production in 1996, but the big break came in 2004 when J.D. Power named Hyundai the second best brand in initial quality. Hyundai also gained significant market share after its sponsorship of the 2002 World Cup, a deal which still continues today.

Phin Upham

Phin Upham is an investor from NYC and SF. You may contact Phin on his Twitter page.