A motorsports academy may get off the starting grid with a share of £16 million from the government.
The cash, announced by trade and industry secretary Patricia Hewitt, has been given in response to a report from the Motorsport Competitiveness Panel.
The report suggests setting up an academy to improve skills in the industry, transferring its technology to other industries, and researching the environmental and economic aspects of motorsports.
Garel Rhys, a member of the panel and director of the Centre for Automotive Industry Research at Cardiff University Business School, said universities were natural bedfellows for the industry.
He said: "Racing teams will spend anything they can to beat the opposition, so they are always seeing how they can push the frontiers of what is possible."
The industry plays a key role in attracting students in many engineering departments, and 13 higher education institutions offer motorsports degrees. The industry is worth some £4.6 billion a year in the UK, and employs 25,000 engineers.
Ms Hewitt said: "The industry's high-tech, high-value, high-skills base is exactly where the future of British manufacturing lies. It is crucial it has the backing to innovate and move forward."