Lola, one of the most highly regarded names in motor racing, will this year for the first time have made more revenue off the racetrack and outside the automotive industry as it echoes other manufacturing companies trying to protect themselves against downturns in their own sectors and to catch growth in others.

Increased diversification is also being advanced by technological developments that let manufacturers work across industries more easily using the same highly sophisticated tools. The trend is being given added impetus by large manufacturers, which are putting more work out to sub-contractors and offering more project assignments to small specialist engineers.

Lola’s non-racing work is surprising to those who do not know the business. When Lola, which is based in Huntingdon, Cambridgeshire, is not designing racing cars that cost anything up to £675,000, it makes drone aircraft, space vehicle parts, antennas and radar systems, communication systems, aircraft parts, and power and sailing yacht structures.

This is possible for Lola and for other specialist engineers because, in the final analysis, that is what they are providing — precision engineering to many different customers.

Martin Birrane, the former racing driver chairman, began looking at expanding Lola beyond motorsport when he bought the business from administration in 1997. Its expansion into different activities has accelerated in the past few years as the business has added customers such as BAE Systems, Airbus, the European Space Agency, the Ministry of Defence, and L-3 Communications. The recent growth in other areas has been partly a result of the long lead time in establishing strong relationships in industries outside motorsport.

Mr Birrane said: “Despite having an open door because of our name, new customers need to know that we can do what we claim we can. That can take a while and can mean us doing a number of small contracts before we get a large one.”

Andrew Churchill, managing director of JJ Churchill, a precision engineer, said that because of diversification his business is busier now than at any time in its 70-year history.

JJ Churchill, which was founded by his pilot grandfather, began as an aircraft engine parts supplier and at one stage worked entirely for Rolls-Royce. But now, along with making jet turbine blades, the Midlands company manufactures parts for very heavy high horsepower diesel engines such as those used in earthmovers. It also engineers parts for power generators and works on defence projects.

The company takes on small- volume batch work. It is trying to target work related to primary industries in the hope that they are more recession-proof.

Mr Churchill said: “Twenty years ago the problems at Rolls-Royce just about killed us. We realised then that we had to be more flexible and not be dependent on one sector, let alone one company.”

Lee Hopley, senior economist of the EEF manufacturers’ organisation, said: “A lot of businesses have diversified to cushion their business and to take more advantage of the investment they have made in technology.”

The EEF sees attempts to add more higher-value splitting into two basic strands: offering continued servicing of equipment to customers; and moving into more niche, specialised engineering, often for several industries. About 60 per cent of manufacturers now describe themselves as niche, according to the organisation.

Ms Hopley said: “To some extent this has been happening since the last recession. But technological capabilities have advanced a lot in the last few years and have enabled companies to become much more diversified.”

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