I penned this for my blog. I know it’s a bit ‘negative’ but I wanted to discuss the topic anyway.
I’ve been closely monitoring the evolving cost dynamics within the sport over the last few years. The comparison between 1990 and 2024 reveals a staggering 90% increase in the inflation-adjusted price of brand-new karts. For context, in 1990, a decent kart, like a PCR, could be acquired for approximately £790 +VAT (non-adjusted price), whereas today, a modern OTK kart, preferred by most competitors, commands around £3550 +VAT. Cost pressures also exist in other areas such as tyres and culture.
Disclaimer: These relate to ‘fixed’ costs mainly related to new kart purchase. Competition costs can fluctuate up, and down, depending on many factors. Karting can be done on a budget!
Key Observations
• Rising Costs and Contributing Factors: Several factors contribute to this significant cost surge. Mandatory crash protection features alone add approximately £300 to the price tag of modern karts, with additional expenses such as sticker kits amounting to another £160.
• Persistent Increase Despite Deductions: Even after deducting these specific add-ons, the overall cost remains substantially higher, marking an increase of approximately 65% from 1990 levels.
• Impact of Tyre Costs: Motorsport UK and dominant classes like Rotax and X30, in the UK, require drivers to use CIK homologaed rubber, even at club level. This has further inflated costs without necessarily improving the sport’s accessibility or experience. In contrast, the dominant tyre in 1990, was the Bridgestone YBN, which offered a more affordable and durable alternative.
• Cultural Shift Towards Big-Spenders: Karting has witnessed a notable cultural shift, with a greater emphasis on catering to individuals pursuing the ‘F1 dream’ rather than the everyday enthusiast. This shift has contributed to an environment where significant spending is normalized, overshadowing concerns about affordability and accessibility.
• Other Notable Concern: One particularly interesting example is the pricing of the Lando Norris kart, essentially a re-painted TonyKart, which is being sold for £180 more than the standard chassis. While this is an acceptable function of the free market, it also underscores the pervasive influence of F1 in creating an inflationary environment within karting.
Looking Ahead
Addressing these escalating costs and cultural shifts requires collaborative efforts from stakeholders within the karting community. Taking care not to undermine karting’s sporting integrity, by prioritising affordability, accessibility, and sustainability, we can ensure that karting remains a vibrant sport for enthusiasts of all backgrounds.
According to the BOE inflation calculator £790 in today’s money is equal to £1,870.43. Add in the cost of the stickers and crash protection as mentioned above and that number goes to £2330.43.
I’ve changed percentages. I made a calculation error. I had adjusted the 790 in them, but was asking the wrong question lol So it’s 90% price increase over all and 65% like for like.
The cost of karting is certainly increasing but I have to say motorsport in general is increasing at a faster rate. This has left Karting in a good financial position atleast here locally where the fields are big and the facilities seem to be financially healthy.
As someone who has worked on the sales side of the sport (business), im not defending the price increases.
However……there’s a lot of factors that go into the rise in pricing that are out of a single manufacturers control.
I think a big thing to consider is that as technology and specialization of the industry has moved forward, so too has the cost of specialized manufacturing.
Karting even on a ‘big’ level is still small potatoes. Hard to keep a lid on COGs when you’re making 4,000 widgets vs another client of the same facility asking them to make 400,000.
Still, the costs are inflated for systemic issues and cultural issues beyond the simple numbers as well.
A lot of this is due to FIA more or less marketing karting as a steppingstone towards F1, In practise it has turned into F5.
Things has gotten out of hand, please tell me why a OTK nassau panel is going for 220 euro when a “normal” (non aerodynamic) is around 30-40.
The tires keep getting more and more sticky and dont last very long.
If you want to have team support a European race of anykind be ready to pay silly money,
FIA have no clue how to keep cost down, and they apoarently have no clue why it has gotten out of hand
As a junior karter I had to fund my own racing, no financial support from my parents. I relied on sponsorship soley and actually had one particular company that was very generious and without his support I never would have been able to compete, mind you I contacted 300+ companies each year. But it was tough.
Cost wise I haven’t noticed much of a difference after returning to the sport after 20 years.
A round of kz at club level still costing me 500-800 euro, depending if it rained or not (new wets). I’m sure you could do it cheaper. Thats without rebuild/maintaince costs etc.
In my country karting was always a rich’s sport, especially in the 80s and 90s, when the national situation wasn’t very good. All drivers where rich people, like bankers or producers; bolts, washers, nuts, zip ties, etc where sold in dollars, not the local currency, there was a driver who owed a team like $20k at the end of one year. (Upper)Middle-class people entered in the 90s but they were very very few and most raced only KT100.
It was in the 2010s when more people in general entered the sport and more teams were created.
I know I’m like a broken record staying this… but.
What does affordable mean? If we can’t define it, it’s hard to accomplish it or measure how far off the mark we are.
The followup question then becomes…. Is the sport sustainable at that level of “affordability”.
My thought is to work backwards from the sustainability point and find more of the kind of people that it appeals to at that value point.
Two observations:
Inflation numbers provided by official government statistics are notoriously underestimated! Governments routinely underreport them, to protect the reputation of the party in power at the time. They typically get manipulated. If you believe that inflation in the USA for example is 3% today, I have some swampland to sell you! Gasoline and insurance is up 20% plus, health costs will bankrupt an arab sheikh, 1 year of college is now 90,000 dollars, etc etc!
From 1990 to 2024 it’s 34 years, even a 1% yearly underestimation ( and I am being very generous) will compound to 40% higher costs, while 1.5% will get you 68% higher!
The pound in 1990 was worth a lot more than other foreign currencies, compared to today.
for example against the dollar it was worth 1.77 vs 1.25 today.
so 790 pounds were equal to 1400 dollars, while 3550 pounds are now worth 4437 dollars. Take away 300 pounds, or 375 dollars (seems way too low, but whatever) and you get to 4060 dollars.
If I use the official USA statistics , 1400 dollars should be worth a factor of 2.4 today, or $ 3360. If I use my 40% compounded 1% yearly fudge factor, we are up at 4704 dollars, so much more than the expected costs, at least in dollars. I think looking at inflation in dollars makes more sense, since the karting world is predominantly dollar and euro based, not pounds. The uk inflation statistics are comprised of predominantly domestic inflation, not world prices, and when the the pound devalues by 40% from 1.77 to 1.25, it stands to reason that imported price inflation will be higher than domestic inflation. Although I don’t have real data, my 1% fudge factor should still be in the ball park…so even in pounds my assumptions are realistic. Even since the introduction of the Euro in 1999, the Pound has lost 25% of its value…
In reality though, it doesn’t make any sense to look at the kart from 1990 and assume that it should cost the stated governmental inflation numbers. First of all, the karts are not the same, the manufacturing standards are not the same, the competitive situation is different (OTK has dominated the market in the last ten years), etc etc etc
The karting industry is now doing well, but it’s no software industry, with 80 percent gross margins! And many small producers went belly up between 2006 and 2010, during the last strong recession… If you really analyze the racing budgets, the initial purchase price of the equipment is one of the relatively affordable costs of a racing season.
I understand all this, but I don’t have a government is lying calculator We do have real wage growth data, and that suggests for most men that has stagnated since the 90s, possibly even gone down. So if we apply the same rule of thumb, which is government data paints a rosier picture than reality, then real inflation rate is higher and real wage growth is worse (i.e negative), we can assume karts are still pricier, in real terms. It should be noted the PCR I used was the most expensive chassis. I could have used the Deavinson Sprint, which was popular at the time, at a few hundred quid less which would make the ‘real’ inflation rate a fair bit higher.
I don’t buy into the notion that manufacturing standards are all that higher. We have robotics, sure, but when it comes down to it I know guys brazing their karts together in the oldskool of oldskoolist of ways, and the modern stuff isn’t exactly a step above them. What makes these chassis nonviable from a business perspective, is perception and things like the Veblen Effect
Either way, it’s about getting a conversation started. There’s a myriad of other economic mechanisms that decide what ‘spend’ really means in karting. I know this is one single data point, but it’s one with an abundance of data. Also, how we view the sport can drastically change how this is calulated. For example, if we take Joe Turney. I imagine the ‘cost’ of his racing with KR would be $250,000+, yet he is professional, so he’s earning out of that deal. So there’s a ton of aspects here.
Yeah, I probably shouldn’t have used those terms! I might change them
All the above are prevalent issues here in Australia, the largest in my opinions being tires and the cultural shift.
Very rarely do you see Dad and son tackling a weekend, 80% of the field are in one way or another tied to a team with endless amounts of data, resource and hands to help, costing thousands a weekend.
Here in Aus there is only one tyre importer allowed to bring in the specified race tire, the price of a set of le cont slicks are approx 15.6% higher when compared to the MG range of slicks.
You are correct, “cultural shift” is a big component of it. Call it cultural, customer preference or economic model or adapting to how the world is changing…it is vastly different than 10 years ago. Any program that goes towards “let’s make it simpler and cost affordable and it will al be ok” will not work well anymore.
People race less, target bigger events and want pro support. Teams cater to that and it’s the only viable way forward (they have bills to pay too, their costs are also increasing and frankly, it’s more satisfying). I don’t see karting ever expanding, it will keep contracting in terms of users and become more elite/pay to play and geared towards quality programs. Still plenty of opportunities to grow the industry, just not through big numbers and cost friendliness.
Even the amateur scene is changing, because the entire economic system has changed. Free time comes at a premium and it’s much more valuable today than 10 years ago. The “gateways” to motorsports have also shrunk significantly…so the two factors can only coexist in an elite type of format.
Alan,
there is no question that salaries on average have not kept track even with the official government (underestimated or not) inflation. For the USA since 1990 the official inflation multiplier is 240, but what it takes into account does not reflect what an average person really shells out. The price of the median home in the usa is up over 300pct, rent 320 pct, health care 343, etc etc.
back to go karts, steel is up over 300 pct, and petrochemicals over 320 …
Inflation is created when governments print money, and spend more than tax receipts. Government employees often get annual inflation adjustments, but Salaries for the average worker were slaughtered by China and east european competition. Let’s also say that in may countries it has been impossible to build or even keep karting tracks open, due to environmental or noise issues, or just the expansion of a city that made it more profitable to build housing or, in the case of Parma, shopping centers. This has made the total number of karts sold relatively stagnant, or declined since 1990. Therefore investments and fixed costs are spread over a smaller number of units. Most small italian mechanical industries have folded, or moved production out of Italy. Only “luxury” goods are produced in the country today.
But hey an ounce of gold in 1990 was 400$, and it’s 2400 today, ( or 220 pounds to 1900 pounds) so aren’t we lucky that karts are not made of gold!
We do have real wage growth data, and that suggests for most men that has stagnated since the 90s, possibly even gone down. So if we apply the same rule of thumb, which is government data paints a rosier picture than reality, then real inflation rate is higher and real wage growth is worse (i.e negative), we can assume karts are still pricier, in real terms. It should be noted the PCR I used was the most expensive chassis. I could have used the Deavinson Sprint, which was popular at the time, at a few hundred quid less which would make the ‘real’ inflation rate a fair bit higher.