How will Honda quitting affect F1?

Posted on | Author Keith Collantine

Honda is expected to confirm its immediate withdrawal from Formula 1
Honda is expected to confirm its immediate withdrawal from Formula 1

It now seems inevitable that Honda will announce in a few hours’ time that it is going to sell its F1 team or close it.

F1 could be left with only nine teams, drivers will be left without seats, and the continued participation of other manufacturers may be in doubt. How will Honda’s departure affect Formula 1?

Three-car teams?

Formula One Management is understood to be required to bring at least 20 cars to each Grand Prix (there is some doubt over the exact figure – some suggest it could be as little as 16). If no buyer for the Brackley team is found, F1 will have only nine teams with 18 cars.

Therefore it may be necessary for some teams to field three cars. This potentially creates all kinds of complications:

How would it be decided which teams run three cars? Would all three be eligible for championship points?

Are the FIA and FOM able to demand teams run three cars if they have to? The commercial deal that governs F1, the Concorde Agreement, lapsed some time ago.

Are Toyota next?

Will other car manufacturers follow Honda in ending their F1 teams? Honda are by no means the only car manufacturer taking a hammering on sales and profits at the moment.

Once one team has been pulled we could see a domino effect where other car manufacturers look at what Honda has done and reason: ‘if they can cut their F1 programme, so can we’.

Given Honda’s decision to pull out, Toyota’s continues participation suddenly looks decidedly vulnerable. Toyota originally entered F1 in 2002 to go up against its major domestic rival which, at the time, was an engine supplier.

Toyota has reported a similar huge fall in its American market sales within days of Honda doing so: Honda’s sales fell by 32%, Toyota’s by 34%. Toyota has slashed its profit forecast for the current fiscal year from ??1.25tr to ??550bn ($13.4bn to $5.9bn).

Its $445.6m F1 budget may seem small by comparison but as the company drastically cuts back on car production and faces a huge fall in profits, sustaining an F1 team at great cost for little reward seems indefensible. There is already speculation that Toyota is not interested in competing in F1 without its chief rival and is preparing to pull out.

Meanwhile Renault has shed 6,000 workers and made deep production cuts. Could it be next in line?

What about their drivers?

Will Jenson Button have an F1 drive in 2009?
Will Jenson Button have an F1 drive in 2009?

Honda were expected to continue with Jenson Button for 2009 and pair him with either Rubens Barrichello, Lucas di Grassi or Bruno Senna. Barrichello, F1’s oldest and most experienced driver, may find it hard to get a seat with another team.

Jenson Button has been with the team since 2003, scored their first win (for the modern incarnation of Honda), and has stuck with them through their 2007-2008 slump. If he is able to get any seat for 2009 his options seem limited to Toro Rosso or possibly Force India.

And its IRL programme?

It’s not clear whether Honda intends to continue its exclusive engine supply deal with the American-based Indy Racing League.

If Honda indeed decides to keep its IRL programme and drop its F1 team Bernie Ecclestone should take note – he allowed both of F1’s North American races to be priced off the calendar, despite objections from many fans and team owners, including Nick Fry.

What about the future cost-cutting plans?

The prospect of losing one of the manufacturer-backed F1 teams will surely harden the resolve of FIA president Max Mosley to increase the size and scope of his cost-cutting proposals, including the demand for standard engines.

The Formula One Teams Association met today to discuss future cost-cutting plans and claim they have “agreed to further measures implementing substantial cost cutting for 2009 and 2010”. Details of how this will be achieved are not known yet.

They also called for a move to a new specification of engine from 2011 – a 1.8-litre turbocharged unit using energy recovery systems, which it claims will use 30% less fuel. Will that be enough of a fuel saving to offset the development cost of these new engines?

And will it be a strong enough proposal to delay Max Mosley’s effort to impose standard engines on F1?

Could it affect the Japanese Grand Prix?

Will Honda-owned Suzuka keep its place on the 2009 F1 calendar?
Will Honda-owned Suzuka keep its place on the 2009 F1 calendar?

Ollie on BlogF1 points out that as Honda operates Suzuka Circuit its role as a Grand Prix host could be in doubt. Suzuka is set to return to F1 as the host of the 2009 Japanese Grand Prix.

As well as the loss of the race’s owner from F1, it could lead to a significant downturn in local interest.

Will someone step in and buy the team?

There is a lot of speculation about whether a buyer for Honda might be found. It is not clear whether Honda would allow a new owner to continue using its engines (James Allen thinks not, Autosport suggests it might).

Inevitably speculation will fall on companies who most tried to enter F1 most recently, such as Dubai’s Magma Group and Germany’s Weigl Group, who looked into purchasing Super Aguri in April, or David Richard’s Prodrive company, which was originally going to enter a team this year.

Autosport suggests that Brawn could bring a Ferrari engine supply to the team. Ferrari is no longer supplying Force India and so in theory may have engines available.

But the chances of finding a buyer able and willing to pump hundreds of millions of dollars into running an F1 team – however cheaply Honda sell the team – seems extremely unlikely in the current economic climate.

That said, if Ecclestone really does have a vested interest in finding a buyer due to the ’20 cars’ clause, then he is the man to get it done.

I hope it happens. Not just for the future of F1, but for the hundreds of workers at Brackley.

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61 comments on “How will Honda quitting affect F1?”

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  1. Honda doesn’t supply the engines for the IRL, they only supply the name. Ilmor Engineering builds the engines from a contract, that i believe, runs through Penske.

    Either way, their investment there is pennies compared to F1. It has less to do with the market and more to do with the cost. F1 is a huge cost and for Honda, little gain. If honda were serious about the American market they’d be in NECKCAR.

  2. Should Toyota follow suit, as has been speculated, I would be concerned for the Williams team. Now that would be a shame if they could not go racing anymore. Had a fabulous day out there watching the 2000 Belgian GP at Spa and saw THAT overtaking move in the Ayrton Senna theatre. Never heard cheering like it!
    Bernie said a few years ago that the western world would be more like a third world economy and that was part of his reasoning to move F1 to other countries. I was tempted to think he was nuts at the time and then I decided he must know much more than we do!

  3. I think the countdown clock on Toyota’s F1 project has already started with this news on Honda. I wouldn’t be surprised to see them slash the programme and simply go back to concentrating on the engines and pool resources with Williams – in effect merging two teams into one – which would probably be mutually beneficial to both Williams and Toyota.

    I can seriously, for the first time, see the three-car team situation on the horizon.

  4. I see very dark days ahead for formula 1. Toyota now has no reason to continue in formula 1 their main competitor is gone. Its is very sad to see such a great company leave the sport! I understand that at the moment the cost of motor sports is not a smart business decision. I just hope no more teams pull out or I might pull myself from watching.

  5. We might find F1 in a maasive amount of trouble. I’m not saying dead in the water, but we might not see a 2009 season if more manufacturers pull out. This has happened in other sport’s before – US baseball being the first to mind (obviously for different reasons). Is it possible that the sport may take a sabbatical?

    One thing I think is for sure. Customer cars will be allowed quicker than you can blink, and possibly the standard engine too. Any of the current manufacturers could pull out at any time, as we know, so why should Mosley listen to any complaints or demands they may have?

    While I feel sorry for the HondaF1 employees, and those of other teams who get pushed aside for more talented ex-Honda people, I can’t help but feel just as sorry for us, the fans. We could be in for a very rough ride, thanks mainly to greedy people.

    F1 has/had become an investment. Where are the new teams who joined to race, not to sell drinks or road cars? There hasn’t been one since Prost. Even Super Aguri was only there to help Honda’s image in Japan (re: Takuma Sato). With F1 having deeper links to the world economy year after year, just the oil “crisis” would have been enough to worry the sport, but if anything happened in the financial world, of course it was going to have a large effect on F1. How large, we’ll have to wait and see, but it doesn’t feel good.

    Strap yourselves in tight fans, we’re going on a bumpy ride. And don’t worry Honda, as long as your shareholders are happy, the board gets a bonus and the profits keep ticking over, you’re doing the right thing, right?

  6. This is a shame,I was looking forward to seeing Ross Brawn take this team and Jense back to the front. If Toyota doesn’t withdraw now I am sure they will not make it through the whole season….they really don’t have a reason to stay now.

  7. Thats a real shame about Honda. i think a lot of ppl had hoped that they would be relatively competitive next year. there are a lot of great ppl on the Honda Team. I wonder if Red Bull will snap some up?

  8. Honda quit F1 and but still race LMP1 with Acura for 2009.
    ALMS is certainly cheaper and you can run at Le Mans.

    Will this enable Max to leverage more drastic changes like a single engine? Oh dear, F1 could just drop like a stone now.

  9. I’m sitting here slightly surprised, yet secretly hoping that F1 really does fall in on itself now, and that something far better will rise from its ashes.

  10. Pseudohendrix
    5th December 2008, 0:55

    If F1 goes the way of the pear, it’s had it coming for a long time. I think a total collapse followed by a ground – up rebuild would be beneficial for the long term future.

    I personally won’t miss Toyota in any way although Glock was showing some promise. Honda, Button, Brawn and possibly Suzuka are great losses although it does not surprise me that it was Honda who blinked first.

    Not only have they spent too much in comparison to their points tally but they were also very hesitant about entering a full blown F1 team in the first place.

  11. Soulore Solaris
    5th December 2008, 1:03

    well, unsurprising really, I’d not be too surprised to see the season canceled.

    I’m a huge fan of F1 and motor racing, but realistically, how ridiculous is this Formula in the face of climate change and an economic disaster…?? this is no mere downturn, this is a disaster we have not yet seen the proportions of, it’s only just beginning.

    and without any rational plan for an environmentally friendly formula, and domination by the utter greed and sickening politics of arrogance by people like Eccelstone, i can only see the whole thing heading for disaster, and now I’m finally of the mind to say i hope the whole ship goes down… actually i think its inevitable…

    but not to worry, something new will rise in its place… lets hope its for the better

  12. Well, Clive predicted this exact scenario months ago. If we – the fans – can see the writing on the wall what the h*ll does it say about the dunderheads in charge that they couldn’t? Of course we all know the answer – the poison dwarf only sees $$$ and S&Max only sees power.

    Both may find out soon enough that such myopic vision will mean that they end up with nothing. Couldn’t happen to nicer blokes IMO.

    I really do think this is the beginning of the end for F1, but I too hope that like the Phoenix something better will rise from the ashes.

  13. Soulore Solaris
    5th December 2008, 1:36

    yeah I agree Pink…

    I often wonder how people can be so greedy stupid and power hungry…??? but i guess its the same blindness that leads to their behavior, the false esteem reinforced by years of supreme arrogance and the world has been run by people like this…

    but the games over…

    i suggest they step aside gracefully now, and let the future emerge, or go down with their miserable sinking ships and let history judge…

  14. i highly doubt there will be a buyer for the team.

    they have no revenue at all – no sponsors, it’s a total loss for whoever buys them.

    the no sponsors was a branding tact by honda, so it’s no too bad for them to go sponsorless – they are the sponsor. but to spend 400m on buying a team that’s only going to cost money is a big stretch right now – especially since the only interested parties are investment companies that have lost most of their money and oil rich countries that have lost 70% of their oil value.

    they’re done. all of them.

    the only ‘safe’ teams out there are ferrari, mclaren, force india, toyota and redbull.

    ferrari and mclaren profit from f1.
    force india and redbull have sugardaddies.
    toyota still makes good money, but they also have sponsors and they made 56 points compared to hondas 14 last year. (points = $).

    toyota can scale back their budget and still be ok.

    renault, bmw, are safe-ish

    renault and bmw are 50/50 between safe and dropable, renault wants to pull the pin to save money, but when they are on form they make good points ($) and they do well from sponsors. they aren’t short on cash, but renault still spends more then they want to put a car on the grid.

    bmw are in the same boat as renault, they spend a bit but they are in a good position points wise, good bank of points to help the funding, and their sponsors are picking up the rest of the bill. bmw are still paying for the privlidge and they could want to save some cash. but if they do, i can see that team still surviving beyond bmw.

    toro rosso and williams could be dropped very soon. toro rosso dosen’t really have a home and williams is self reliant by people with not too much bank. their sponsors are the guys who are being hit hard financially and their points pull is minimal.

    imo the sport is all about manufacturers, without them it’s just high speed karting. everyone using 2-3 different chassis and engines.

  15. My wife is Russian, and I often tell her about this sport and the way it is run. She says it reminds her of communism, and I would have to agree with her.
    The rich have got richer whilst the poor have got poorer. Bernie Ecclestone could not care less if F1 sank without a trace, he has been hiding his billions in offshore banks for years, he’ll make sure he is alright, mark my words.
    This does not just come down to cash, it comes down to how this sport has been handled. The non stop scandal, the non stop biased rules handed out yearly, the extorsionistic fleesing of teams, circuit owners, and fans.
    I agree with what was said by a blogger a couple of weeks ago in which he said that fans just cannot afford to attend these races anymore, $2,000.00 can get you a vacation somewhere nice. In F1, what, a day out in a Northamptonshire field in the rain for four people!!
    The IRL charge $40 a ticket to watch the St Petersburg race, $40. This is why this sport is terminally ill, it has been milked bone dry by corrupt, evil people.

  16. Tomorrow Honda quits F1 and then, the next day the world comes to an end!!!

    Come one people!! Get a grip! Grand Prix racing has been around and backed by manufacturers in some form or another for over 100 years. Even through the Great Depression, which was far worse than where we are now.

    This may be the beginning of end of Formula 1 as we know it, but it’s not the end of Formula 1!

  17. Pseudohendrix
    5th December 2008, 2:45

    Yeh good point Jonatas. The only economic crisis in history that is comparable to this one is the Wall street crash and that was somewhat rectified by WWII. Grand Prix racing felt little or none of the rejuvenating economic effects of the US arms and export industry and then Marshall plan which re-stimulated the world economy. However, it kept going. People are always going to want to go racing and there will always be drivers. I see a couple of outcomes in the long run:

    – Middle grid teams pull out and are replaced by smaller independents that last one or two seasons but then are replaced by yet more independents of decreasing size and some privateers (not every crazy millionaire is going to go bust)

    – The top teams remain until the profit margins start to fall. This would be caused by a loss of competitive edge for whatever reason.

    – This would lead to a situation where 3 big teams would become 2 as the top two get an advantage over a couple of seasons, thus rendering the third team an unsustainable middle-gridder. The top two eventually become equilibrious or one becomes dominant, like Auto Union and Mercedes in the pre-war era.

    i don’t see the sport collapsing but it sure is gonna get ugly in the interim.

    One thing that will happen for sure is a discontinuation of F1 history.
    Top 100 lists and all time stats tables will be rendered useless as the series convulses through rule changes. Bernie’s medal system is an example. The F1 season of 2050 will be utterly incomparable to the 2008 season and the legacy of the next generation of drivers will be overshadowed by the lack of any relevant context against which to judge them.

  18. I agree with Jonatas. So Honda is going to pull out, its not a big deal. If there are 18cars, its not the end of the world. Contracts get re-negotiated, people arent going to boycott F1. Although some of the above comments seem to want it to end. Its got me beat why they are following the sport if they dont like it.
    Its sad to see Honda go, i hope they will return in a few years; and as far as 2050, hopefully F1 will be like Pod Racing in Star Wars. Hahahaha

  19. I wonder if this will herald the return of the independent – team/constructor or engine supplier?

    Manufacturers have dominated in this sport which used to be dominated by independents (Williams being the 1990’s top team) but now are looking more weakened as their need to survive lies at the hands of the consumer. If people don’t buy their products, they are done for.

    If Honda and Toyota are to pull out, I’m sure that there will be those companies/individuals that will take them over and a more independent look could come back to F1 circles. If they stop making engines, then those (and other) constructors may need to look at independent engine suppliers, such as Cosworth.

    We will have to wait to see the developments over the next few months, particularly the closing of the first GP in Australia to see what happens.

  20. yorricksfriend
    5th December 2008, 3:01

    If, like some of you have suggested – F1 sinks like a ship and something rises from the ashes, I shall turn my back on it

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