Honda poised to leave F1

Brogan

🦶 Leg end
Staff member
Just been reading about it.

It doesn't bode well for them or F1.
I can't see many buyers queuing up to buy them in the current financial climate sadly

You have to wonder how much longer Williams can continue bearing in mind their relative lack of performance as of late.

I expect now we'll see the rules rewritten to reduce the minimum number of cars but something drastically needs to change to reduce costs if F1 is to continue.

Some thoughts on this news from ITV's James Allen here
 

cider_and_toast

Exulted Lord High Moderator of the Apex
Staff member
Premium Contributor
This news came as something of a shock, especially as I was reading this weeks Autosport at the time, which contained an article on which two drivers were most likely to get the Honda drives next season. It just goes to show what a lot of people have been saying for some time that with the number of big manufacturers in the sport something like this was bound to happen. Teams like Williams can't just walk away from F1 because they are F1 where as for Honda F1 is nothing more than a way of pushing the company name. Manufacturers can walk away from the sport with a lot more ease than independant teams.

I am truly concerned that we are seeing the end of Formula One as the pinnacle of motorsport. I know that sounds a little dramatic but when you look at some of the circuits that have left the callander (France, Canada, Hockenheim) and now one of the most heavily funded teams pulls out as well, you have to wonder what's going on. I've wondered how much longer Toyota will continue to shell out all their cash on their F1 operation? If you consider that both teams have stumped a combined total of around 5 or 6 hundred million pounds in the last year or so to score a couple of podiums you have to ask questions.
 

slickskid

Points Scorer
Supporter
I have the Spare £1 to buy the Honda team but unfortunately i don't have the other gazillion notes to actually run it. :givemestrength:

A very sad state of affairs for F1 in general and it won't get any better any time soon. I could almost see the other big manufacturers left having witnessed Honda's decision no revisting their own status in the series, and perhaps even more crucially alot more countries looking at the financial viability of actually running a race.
 

fat jez

Race Winner
Valued Member
Well, China are already looking at not renewing their contract to run a race and I can imagine Toyota's board looking at the millions spent on their F1 team and the shockingly bad return they have had for it - particularly as their number 1 rival in the Japanese car market is pulling out of F1
 
There is money in the middle east, where racing is very big. The global recession will turn around and formula one will recover.

Honda are possibly a very appealing prospect. Their results previously have been appalling but with Ross Brawn, Button, Senna, big Sponsorship from Petronas, and a year of r&d behind this years car the team should be a fairly appealing prospect especially if they can ditch their rubbish power plant and stick a Ferrari one on the back.

New owners could always cut back operations to reduce the running cost. Give Jenson Button a pay cut for starters. As a short term opportunity Honda is appealing as they are likely to be quite good this season and the next. As a longer term proposition they are good also - The infrastructure has been in place for some time.

I think some arab consortium will be interested in Honda.

Renault and Toyota are different propositions altogether. Renault have always been cool on F1 and current economic conditions will probably be all the excuse they need. No French GP next year remember. Toyota could go and I don't see them lining up a buyer. Williams, STR and RBR are clearly going to sign up run to Max's cossy, but who else I wonder? When Renault pull the plug Flav will almost certainly be able to sort out a buyer. I think Williams, STR, RBR and Force Flavio will make up the four. This could actually be an interesting situation.
 

bogaTYR

Points Scorer
and we're not out of the woods yet.

bmw a sales drop of 25% and already pulling out of certain motor sort events if i heard the news properly, renault about the same losses as bmw and ze big boss already talking about huge cuts, toyota the same as honda... sponsors getting nervous so teams like williams also getting nervous. even mercedes slowly getting nervous. if this goes on, we could end up with one team on the grid next year. a red one.

argh
 
As I understand it Williams are already seriously in debt to a bank that has been nationalised. They could easily fail to make it on to the grid next year.

Toyota and Renault have got to be likely to follow Honda. BMW I don't know about, I'd have thought they'll try 2009 and see how they do.
 

Galahad

Not a Moderator
Valued Member
I think there is a bit of a kneejerk reaction in the press to all this.

Much depends on how the next few months play out, but is the fall in demand for road cars going to be permanent? Not flippin' likely.

Of course it looks bad for Honda when their workers in Swindon are "rested" for two months while Ross, Jenson, Rubens and co. and flying backwards and forwards to Spain testing the new cars. The plan had been to bring conventional sponsorship back onto the cars for 2009, but in the current climate I doubt whether this was forthcoming and Honda Corp. were no doubt unwilling to plug the shortfall.

Renault and Williams both look on slightly shaky ground for different reasons, but even with the loss of RBS backing I expect Sir Frank to pull through this year - fortunately his engines aren't costing him anything, and cost savings can be made within the company as required - not ideal, but it's survival of the fittest after all.

In the meantime I would expect interest from the Middle East in taking over Honda - it is a competitive proposition and opportunities like this don't come along very often. Of course times are tough now, but what self-respecting entrepreneur is going to turn down the opportunity to buy a business for £1 that very recently was valued at in excess of £400m? In ten years' time it could be worth even more.

All of this doesn't mean there shouldn't be efforts made to cut costs within the sport, and there are sensible proposals coming from FOTA in that regard. Max is lobbing grenades in left right and centre as usual, but so far nobody seems to have gone along with any of his more outlandish suggestions. But overall it's no more the end of the world than it was when Ford/Jaguar left. Manufacturers cannot be expected to make an indefinite commitment to F1, so F1 should not make itself dependent upon them.
 

slickskid

Points Scorer
Supporter
Hummmm.... something just doesn't add up here and can't put my finger on it right now.

Could it be there are technically only 4 independants left, Red Bull (tied to renault), TR (tied to ferrari), Force India (recently tied to maca / mercedes), Williams (toyota?).

So unless these 4 break free of current contracts where are the 4 coming from?

To get more cost savings and 8 i guess mercedes, bmw (handing back to sauber), renault (handover to who) & toybota (totally lost) would have to leave giving the only true team to ferrari, unless of course anyone can invisage more teams joining, something i can't see happening any time soon.
 

Brogan

🦶 Leg end
Staff member
Agreed slick.

I can't see where the 4 teams are going to come from that would use a Cosworth engine.
Unless of course we see at least 2 new teams joining for next season....
 

bogaTYR

Points Scorer
GM, i had an interesting discussion with someone in the investment industry about the current downturn. i brought forward the, i thought, sensible remark that stocks go up and down as these things do. i was kinda unprepared to hear that the stock market in japan is down now for about 10 years! and still no real sign upwards. so relying on certainties like car sales coming back seems to me a bit too easy.

i think the financial problems in f1 are now getting to a point its too late for anything to be done. maybe car sales will recover one day but who says the manufacturers we have in f1 are still around by then and who says that any team mainly paid for by sponsoring or tv rights will still be arond?

and thats what really disturbs me. if this situation goes on for most of 2009 and will worsen, then an expensive 'hobby' like f1 will suffer. and what will be left by the time things are 'back to normal'? i honestly don't see honda (or any other team forced to drop out cos of the current financial situation) coming back when they start selling cars again.

you mention potential interest in the middle east. i hope you're right but to be honest, i don't see that as something structural. i know there is middle east interest in f1 (spyker comes to mind right now plus one sponsor for ferrari) but i don't seem them buying more then 1 team. plus they have their a1 toy already. so to me that does not seem an answer.

and for my understanding: at what point does f1 stop? not trying to be a prophet of doom, but just for my understanding. can you have races with only 3-4 teams (america comes to mind and very few teams taking part). is there a minimum of teams and/or races?
 

bogaTYR

Points Scorer
and talking about sponsors

at&t have announced 12 000 redundancies, about 4% of its total workforce. philips has issued a profit warning. so frank williams has not only rbs but also at&t and philips as potential problems.
 

Galahad

Not a Moderator
Valued Member
Thanks boga. Of course the domestic economy in Japan has been in some trouble - they had 0% interest rates for about 8 years if I remember correctly - but it didn't mean they didn't still have a lot of very successful companies increasing sales and making impressive profits over that period (Toyota being one example, of course).

Falls in the stock market are no joke of course but they don't affect the underlying profitability of these companies. Inefficient car manufacturers will suffer - GM and Ford look unlikely to see the end of 2009 unless the US Government steps in to rescue them - just as poorly-run companies will fail in every sector. But the demand for the products remains strong in the long-term irrespective of this - it's hardly worth pointing out that in the realm of personal transportation these companies have no competition, only each other.

Now, just because the car manufacturers will survive this period doesn't mean they will continue in F1 of course - in a recession it's perceived (who knows, perhaps rightly) as just a high profile waste of money. But if people are buying fewer cars in the established economies, it becomes more important to get your products out in the developing markets, and F1 is, apparently, a good way to do this. Maybe it won't always be the case, but for the time being that is the feedback from companies investing in F1.

If other manufacturers withdraw, F1 will have to take radical steps in the short-term to preserve the sport. Under the old Concorde Agreement, if the grid falls below 16 cars the FIA can ask other teams to run a third car (such a car would be ineligible for championship points or prize money). The FIA would have discretion to decide which team(s) would run a third car in this situation.

One question though - how many manufacturers were in F1 ten years ago? The answer is actually three - Ferrari, Mercedes and Peugeot. That was it.

Spending has rocketed since then and will have to be curbed. But I'm still confident these teams represent a good investment for individuals or companies looking to take advantage of F1's global popularity. So it may be we have fewer manufacturer teams on the grid but I think, I believe, I hope, there will be new private teams taking over their assets and taking their places on the grid. Such has always been the way of it in global motorsport, peaks and troughs, and F1 is no different.
 

Boyle

Race Winner
Contributor
Sad days for F1 but as the saying goes...


'Always look on the bright side of life'
:whistle: :whistle: :whistle: :whistle: :whistle: :whistle: :whistle: :whistle:
 

Brogan

🦶 Leg end
Staff member
Just found this interesting snipped on Wikipedia:

In the long run, the FIA intends to introduce greater restrictions on testing and the introduction of standardized electronics, tyres and brakes to reduce costs and entice more new private teams into the sport. Proposed new rules for the year 2008 led to 22 teams applying to race that season, but since currently only 12 teams can race at one time, 10 of those applicants were turned down.
Is that true?
If so, who were the 10 teams that were refused a licence to race?

More importantly, why did none of them take up the slot left by Super Aguri?

Edit: I have since found it on another page with some expanded text:

On 14 February 2006 the FIA President Max Mosley announced that all teams interested in competing in the 2008 World Championship would have a seven-day window during which they would have to submit an application to compete. All eleven current teams applied, as well as several others. On April 28, 2006 the FIA announced that all of the current teams' applications for the 2008 season were granted, along with a new team Prodrive, fronted by the ex-BAR and Benetton principal David Richards.

There were 21 applications (including the current teams and Prodrive), of which the following were notable: European Minardi F1 Team Ltd, Jordan Grand Prix, Direxiv and Carlin Motorsport. However despite the Prodrive application being accepted Richards later announced that the team would not race in 2008 due to a dispute over the legality of customer cars.
Taken from here: 2008 Formula One season
 

bogaTYR

Points Scorer
that was before the situation we are in nowadays.

think about it, its called a credit crisis, companies are having a hard time getting credit. so where would the money come from? i cannot imagine any team anywhere in motorsport pulling hundreds of millions of lolly out of their back pocket. they need to pre finance the team with cash in the bank now since they cannot go to the bank for short term loans to tie them over.

thanks for your usual well thought through comments, GM. its all a chain, isn't it? banks don't give out loans, people don't buy cars, car companies need to make cuts. and how companies can buy an f1 team in these teams is way beyond me. ok, one pound makes sense but what happens after that? i agree that the need for cars or transport will remain. but how will this demand look when the dust settles and will there be a place for f1 in this scheme of things? what if its a market for diesels or electric cars?

your remark about moving into emerging markets would make sense if the situation in these emerging markets would be different from the developed world. unfortunately what i understand from a friend in dubai, its not. they have another issue, namely an incredibly low oil price. so even they feel the crunch and have difficulties getting credits and keeping cash flows going.

so where to go? even the old battle horse china is cooling down fast. and remember, after the private plane debacle it seems not a good idea to have an f1 stable. so if this goes on and the big 3 in the USA go down, they probably won't but they will need to cut back hugely. then even a monster like toyota could be in a sticky place, the USA is the biggest market for toyota outside japan.

honestly, i don't see any place for f1 to go right now. and its this enormous increase of costs which will be the downfal of this sport. maybe in a renewed version with a format kinda like A1GP. or maybe with local garagists.
 
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