How the last global recession affected F1 teams ?σΤιΌΤΗ£ and how the next one might

Jaguar was the last manufacturer team to leave F1 before Honda

Jaguar was the last manufacturer team to leave F1 before Honda

The true impact of the global recession on Formula 1 became clear week as Honda suddenly axed its F1 team.

It?σΤιΌΤδσs not clear how deep and how prolonged the recession will be, but we can get an idea how it will affect F1 by looking back on what the 1989-1992 recession did to the sport.

Yesterday’s Daily Telegraph offered this comparison of the emerging global recession of today with the last major financial downturn:

?σΤιΌ?τThe last recession, between 1989 and 1992, had a five-year impact on the car industry,?σΤιΌ?Ψ says Professor Garel Rhys of Cardiff Business School. This year, around 2.2 million will have been sold in Britain, but Prof Rhys believes that will be 1.75 million next year, and as low as 1.6 million in 2010. ?σΤιΌ?τI?σΤιΌΤδσm not being alarmist about this,?σΤιΌ?Ψ he says. ?σΤιΌ?τI?σΤιΌΤδσm merely tracking the last recession ?σΤιΌΤΗ£ and this one?σΤιΌΤδσs worse.?σΤιΌ?Ψ

Recessions force companies like car manufacturers to make sudden, deep cuts in expenditure, which is exactly what Honda did to its F1 team last week.

So what happened to car manufacturer involvement in F1 during and after the last recession? Here?σΤιΌΤδσs a summary:

1989 ?σΤιΌΤΗ£ In: Renault (engines), Lamborghini (engines)
1991 ?σΤιΌΤΗ£ In: Porsche (engines; Out: Porsche (engines)
1992 ?σΤιΌΤΗ£ Out: Honda (engines)
1993 ?σΤιΌΤΗ£ Out: Lamborghini (engines)
1994 ?σΤιΌΤΗ£ In: Mercedes (engines), Peugeot (engines)
1997 ?σΤιΌΤΗ£ Out: Renault (engines)
2000 ?σΤιΌΤΗ£ In: Honda (engines), BMW (engines), Jaguar (team); Out: Peugeot (engines)
2002 ?σΤιΌΤΗ£ In: Renault (team), Toyota (team)
2004 ?σΤιΌΤΗ£ Out: Jaguar (team)
2006 ?σΤιΌΤΗ£ In: Honda (team), BMW (team)
2008 ?σΤιΌΤΗ£ Out: Honda (team)

There are two patterns here: first, car manufacturers have largely switched from just being engine suppliers to running entire operations.

Second, car manufacturers join F1 during general economic stability and prosperity, and leave when financial conditions worsen. Granted, some have left because they just can’t cut it at the top level: Peugeot in 2000 was an example.

And that’s what makes figuring out the Honda withdrawal difficult: did they go because they were struggling, or because of costs? As I explained yesterday, I’m leaning towards the second explanation, but the coming months will show us whether Honda was just the first in a series of manufacturer withdrawals.

Read more: Honda: a one-off or the first of many?

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16 comments on How the last global recession affected F1 teams ?σΤιΌΤΗ£ and how the next one might

  1. I see what you’re getting at but I just don’t believe the FIA could enforce it.

    I was talking to someone the other day about the possibility of an FIA-imposed budget cap.

    We agreed that F1 was about the neverending quest of talented engineers cunningly exploiting loopholes in the ever more restrictive technical regulations to find an unfair advantage. However, if a budget cap was applied then it would become a neverending quest by the accountants instead…

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