The fast-growing country will be only the third Southeast Asian nation to host an F1 race as the glitzy franchise seeks to tap new regional markets after an $8 billion takeover by U.S. firm Liberty Media last year.
Hanoi, confirmed as host on Wednesday, was far from an obvious choice: it’s not the richest city in the region, and motorsports remain on the fringe in the football-mad nation.
But with its 10-year F1 deal worth tens of millions, Vietnam has promised to succeed where some other Asian countries, India, South Korea and Malaysia, have not.
Facing financial strains, all three pulled the plug on hosting the race in the past five years, a warning sign for ambitious cities tempted to enter the costly sport.
“They (F1) can’t really afford a failure,” said Laurence Edmondson, ESPN‘s F1 editor.
Asia’s shining example is Singapore, whose glittering, downtown night race quickly became a mainstay of the F1 circuit.
In the right market, F1 races can rake in tens of millions of dollars from ticket sales, merchandise and broadcasting rights.
But the event requires huge up-front investment from first-time hosts, and needs to be meticulously organized and properly promoted.
Success also hinges on a passionate motorsports culture that does not yet exist in Vietnam, where most people drive motorbikes instead of cars.
“You can’t just hold a race and believe people will go out to buy go-karts and build go-kart tracks,” Edmondson told AFP from London.
The city has a few cost-cutting factors in its favor: the 5.6-kilometer (3.5 mile) street course will use some existing roads instead of building an entirely new track from scratch, a costly endeavour that has helped to derail some past hosts.
Vietnam has also vowed not to dip into government coffers and has secured full financial backing from the country’s largest private sector company, VinGroup, run by Vietnam’s richest man who is worth an estimated $6.3 billion.
Formula One would not disclose the race fees, which will be paid in full by VinGroup, but Vietnamese press put the number at $60 million per year.
The actual price tag after building the track, paying for security and promoting the event around the world is likely to be much higher, said Truong Anh Ngoc, sports correspondent at the official Vietnam News Agency.
“The figures could be in the hundreds of million dollars… and the most important thing is to profit from it,” he told AFP.
F1 organizers in Malaysia are all too familiar.
The country cancelled its F1 race last year after hosting it for almost 20 years, saying it wasn’t turning a profit.
South Korea did the same in 2013 after facing low turnout to their race in remote Yeongam, and India pulled out in the same year also over money troubles.
Formula One boss Chase Carey said some past flops might have come from near-sighted planning, which he hopes to avoid.
“It’s important to have a long-term perspective. I think in the past there was a bit of a short-term view towards many of the things we did,” he told AFP.
He hopes to rope in younger fans by promoting F1’s digital media, including its eSports world championship rolled out last year, and is trying to groom more Asian and female racers to diversify its audience.
But the bottom line for many is to provide a spectacle that will keep audiences coming back for more.
Singapore has managed just that.
The wealthy city-state has been hosting F1 races since 2008 and has boosted annual attendance with its Marina Bay Street Circuit race, drawing some 263,000 to the three-day event this year.
Some hope Hanoi, a sleepy, tree-lined capital still oozing with colonial charm, will be able to do the same.
“You have to create events that are interesting, you cannot make something with no soul, with no romance about it,” Alex Yoong, a Malaysian former F1 driver and Fox Sports Asia commentator, told AFP.
“You need to know what you’re doing and how to spend the money,” he added.
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