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. Sadly F1 is becoming a shadow of the great sport it once used to be, and all in part due to many factors and far to many people and organisations to list here…

  2. Ajokay – yep!

    DC –

    Why in the world would Toyota leave for that reason?

    For the same reason Michelin weren’t interested in being F1’s sole tyre suppliers. The point of motor racing is competition and beating the other guy. For Toyota the other guy is Honda.

    Glad to see they’re sticking with the IRL at least.

    UKK –

    It is now the time for Flavio to move and get Button in Nelsinho’s seat.

    I don’t think that’s going to happen.

  3. I think the main results of this will be that Max will have more power in his cost cutting drive, and so a standard engine will be more likely. Also the issue of customer cars will probably be back on the agenda.

  4. Keith, yep, I also don’t think it will happen, but is an interesting thought ;-)

  5. I guess if Honda is sold, and Brawn gets Ferrari engines for the new team, then that leaves Rubens with less than 0% chance of a drive next year, what with all the recent spilling of Austria 2002’s beans.

  6. Will is seem the with mad max and berni taking page out Bob Mugabe’s book on how to run things it looks like F! is heading the same way as ZIM i feel sorry for honda i thought with Ross there that next year they would be the surpise!!!! they still surprised

  7. Robert I tend to disagree with your analogy of the Williams team being to model for future racing, last I heard they were in crippling debt and are having to fight tooth and nail to keep in the sport and with news about some of their key sponsors in trouble I feel it is the wrong benchmark to use.

    If Williams (and Force India)had not no opposed the customer team proposal so hard in which kept Prodrive and was one of the fundamental reason why Honda stopped supporting Super Aguri then there would be more teams in the sport in which to soften the blow of losing a team like Honda, but Williams seemed to want their cake and eat it a demand that teams needed to spend lots of money on building and designing their own cars, which is in the mindset if all the other big racing teams, that F1 racing is about throwing as much money at the team as possible without understanding the realistic returns. In protecting Williams pedigree it kept out other smaller teams, but ensured that it was trapped in a small pond with much bigger fish in.

    Just a crazy out-there type though on this, with the global banks/car companies struggling, we are seeing the governing bodies of these countries bailing them out, I wonder if Bernie could put together a “bail out scheme” which would propose to reduce the teams cost in provision for certain returns, such as a budget cap on design and development or a maximum spend per year.

  8. Robert I tend to disagree with your analogy of the Williams team being to model for future racing, last I heard they were in crippling debt and are having to fight tooth and nail to keep in the sport and with news about some of their key sponsors in trouble I feel it is the wrong benchmark to use.

    I agree it’s the wrong model to take on manufacturers with. That’s why they are in debt, because they have to spend to compete with teams backed by companies with massive profits to boot.

    But if everyone follows the Williams model the sport can be sustained much easier. Like it was just ten years ago.

  9. For the same reason Michelin weren’t interested in being F1’s sole tyre suppliers. The point of motor racing is competition and beating the other guy. For Toyota the other guy is Honda.

    I see what you are saying, Keith, but remember that the manufacturers look at F1 as a marketing tool. (What was that famous Enzo quote: “The other guys race to sell cars, we sell cars so we can race.”)

    I can imagine Toyota pulling out, but not simply because Honda did so. Toyota would pull out because they need to cut costs, just like Ford/Jag a couple years ago and Honda now.

    In a very real sense, Toyota F1’s intrinsic value just increased because Honda pulled out. They went into F1 because they saw the marketing and R&D benefits Honda was getting. Now Honda, one of their biggest rivals, has lost those benefits.

    Think of it like a business, not a sport.

  10. @ DC (comment #36)

    Why would Toyota want to keep throwing piles of money into F1 when their reason to be there was to compete with the other Japanese competitor?They haven’t had any success and now they can withdraw with their heads up and say at least they didn’t cave in first… and clear and saving billions.

  11. Everyone is mentioning Force India as being healthy. Yes, this is true, but Dr Mallya is a billionaire a few times over. He can afford to dissolve a contract with Ferrari and come to terms for a technical partnership with McLaren-Mercedes. For the rest of the F1 world, there needs to be cost cutting, like it or not. That’s reality. But then what do fans really want–fancy high-dollar multinationals or independent teams that can at least round up enough budget to build a chassis and bolt on an engine they can afford? Racin’ is still racin’, isn’t it? Did F1 not exist in the ’60s and ’70s? Modern fans only seem to care about F1 if it has big-spending corporations involved. That seems backwards to me.

  12. Seems to me Bernie should stop threatening GP’s and reinstate the USA, Canadian, and French Grand Prix’s with immediate effect, even if they pay reduced fees. The car manufacturers need maximum help, publicity and exposure in what is a clearly a terrible global financial situation. The North American market is huge and fundamental. Come on Bernie… contain your ego and let common sense prevail for the sack of F1!

  13. From my buddy Bob when I told him:

    “Who is Force India going to race with now?”

  14. Hey, didn’t Hyundai a few years ago say that they wanted to enter F1 in the near future. Well, if they were serious about it, then this is an ideal opportunity for them.

    They can’t do any worse than Honda, now, can they?

    I bet Nick Fry wishes they never got rid of Jacques Villeneuve now, eh?

  15. I don’t buy into this idea that because Honda have quit Toyota will quit because “their reason to be there was to compete with the other Japanese competitor”. Toyota are the worlds biggest car company. Honda don’t even produce half as many cars as them. Honda are not Toyota’s main rival in terms of selling cars. Toyota are a global company who compete in a global market primarily with GM, VW and Ford (none of whom are currently represented in F1). Even if Toyota did quit I don’t think it would be because of Honda, there are bigger things to consider.

  16. Pink Peril @ No 12

    Says it all really.

    The sport may well start to implode sooner rather than later and for some of us it may be a good thing.

    We’ve seen a lot of mismanagement and a world wide community of fans disregarded in an attempt to make obscene profits.

    My sympathies are with the staff at all teams as the next year could be a very uncomfortable one for them but if the collapse of F1 brings about a new series that focuses more on racing cars & drivers then it may turn out to be for the best.

  17. For F1 to continue there has got to be some give from both the teams and management and Fans. F1 can still be the pinical of motor racing, that dose not mean they have to have all the most high end equipment in them. I mean come on most of what you see on F1 you cant buy in a street car, most of us cant afford a top Ferrai or Mercedies (sorry for my lousy spelling). As far as if this happens drivers will quit and manufacures pull out, well I say bye, bye. The sport is going on with out Honda it can go on with out ferrai. It will go on after Alanso. Someone else will come take their place. If you cut cost or your standize things or you allow this or that, it is going to make someone unhappy. For those who say if they do this it wont be F1 anymore, well maybe it wont be the old F1 but at this point F1 aint looking to good we have fewer cars and less race tracks now. There is no simple answer to how to fix the problem. In the end, everyone needs to do a little more give and work the proplem together and stop with the one answer solution to the problem. My 2 cents

  18. Hey Bernie, maybe you and Max should sit down and talk.

  19. I think this is a sad day for F1 but one has to wonder why Alonso didn’t opt for Honda at the end of the season. I think it was not fully related with the performance alone, other factors did come in to play and it may be that Honda’s quitting was one of them. Again it is a big “may be”.

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