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Our Expert Opinion

Nürburgring — Silicon Valley of the global automotive industry

Author: Oldenburger Hannes | 12.02.2019
Photos and videos: Manthey Racing, Nürburgring

We all know famous of Silicon Valley, located near San-Francisco, with the densest concentration of leading tech companies, promising startups, and multi-billion-dollar venture capital funds. It is home to the leading innovations related to the internet, nanotechnology and cutting-edge research. The Valley is full of money, start-ups and investments. This was the cradle of technology and the development has spread globally.

Today we offer to you to forget about the Tech dream and instead think about the Auto dream, at Nürburgring in Germany. Germany is the leader of the global automotive industry, and Nürburgring is its Silicon Valley, with the best cars and the highest speeds.

A lot of Land, but no Demand

The story began in the 80s when the local government was selling the land in the automotive technology park at a give-away price. A square meter cost about 8 Deutsche Marks at that time, but even with this price there was little demand. Meanwhile, Nürburgring had several automotive test centers, one of which was BMW, located in the very center of the Nürburg town. The rest settled in the area 5-10 kilometers from the circuit in the nearby villages, where they were buying old buildings for nothing, renovating them, and moving in. No one wanted to build their test centers in close proximity to the track because of paparazzi and media.

As it turned out the mistake that led to zero growth of the technology park was the staff. Poor marketing of the local government, and staff in charge of the process, were removed. Replacing them was a new generation of young and motivated auto-sport professionals, and soon the business started to improve. Key to the change was having the automotive manufacturers understand the value of the Nürburgring, with its potential for the business development, testing and lap speed marketing. Just add to the new car model "Nürburgring Edition", "Green Hell" or "Nürburgring Proved" and the sales immediately went up.

Automotive Industry heading to the Nürburgring

The automotive technology park of the Nürburgring, or "Volcanic valley", is located close to the Race Track in Meuspath town. Long ago this region was rich with volcanoes. This is why the automotive technology park and testing centers around it are also named "Volcanic valley".

Today all the leading automotive manufacturers and tuning companies are represented here: Audi, Mercedes-Benz, AMG, Jaguar, Lamborghini, Bugatti, Pagani, Land Rover, Aston Martin, Porsche, Yokohama, BMW, Volkswagen, Renntech and others, and the demand is growing. The local government keeps allocating new lands for new test centers. They are interested in the creation of new jobs and attraction of young professionals to the region. So, if you want to place here just for cars storage, most likely you will be refused. And it is not only about the money you are ready to invest in the region. Preference is given to big players of the automotive market who can attract more traffic and jobs.

The Nürburgring has Plenty of Room for Everyone

Despite the hype surrounding the lands allocation many small companies had a chance to purchase some good space 5-10 kilometers from the circuit. The costs of renting residences and required infrastructure are very low compared to central "Volcanic valley". A good space of 450-500 square meters with lift platforms can be rented for about 1500 EUR, and a 2-bedroom apartment for 450 EUR ( plus utilities ).

Automotive startups use this advantage. All companies great and small that are somehow connected with the automotive industry try to find a place at the Ring. It is prestigious from a development perspective. The Nürbungring has been considered to be an automotive Mecca for many years and if you have an entry point ( office, garage, house or an apartment ), this can inspire envy of your competitors.

A Small Garage for the Big Future

Raeder Motorsport can be a classic example of a small garage with the big Ego, its headquarters is now located in the technical park of the Nürburgring valley.

Brothers Martin and Nicolas Raeder founded the company in 2011 and settled not far away from the Nürburgring in a small Oberbaar Village. Two automotive engineers were doing common for the Nürburgring job: changing tires, breaks, oil, and all the technical support for those who were coming to race at the circuit. Time passed and startup became quite famous in the motor sport when the brothers started to build custom-made racing cars. Of course, to begin with they built several fast sports cars for themselves ( Honda Accord Type R, Mitsubishi Lancer Evo VII, Porsche GT3 RS and other ), step by step studying the market and making expansion plans. This led to new opportunities, and once they hired the right people in the marketing and engineering, the company started to take on the VLN ( Endurance Racing ) and the Nürburgring 24 Hours races.

The results didn't take long. After such a successful strategy the brothers decided to industrialize the sports car production, both for race professionals and enthusiasts. Everything is nice and simple: you give your car and receive a completely ready and tuned vehicle for the Race Track, even with a warranty.

Eventually the company was increasing its turnover through the service that no one could offer at the Nürburgring at that time. As a result, the garage became too small for them. So, it was obvious to move to the "Green Hell" technology park. With the investment support the company built a whole tech center with a showroom, car storage and maintenance.

The garage startup Raeder Motorsport has grown so much that at first it was acquired by Manthey-Racing, and subsequently by Porsche AG. Today Raeder and Manthey are official Motorsport branches of Porsche. The company employs more than 200 people at the Nürburgring Nordschleife and it continues to grow.

Friends, if you are interested in an excursion to the behind-the-scenes world of the Nurburgring, then we will be happy to conduct it.