Earlier this week I asked if Honda’s F1 pull-out would be a one-off or the first of many. Guest writer Ben Evans sees more manufacturer withdrawals in the near future.
So Honda is F1’s first credit crunch victim having, in the space of 12 months, gone from two F1 teams to none. Surprising? Well not really. The first of several? Too right.
I have been increasingly concerned about the high levels of manufacturer support in F1 for some time. Six teams – Ferrari, Toyota, Renault, BMW, McLaren (Mercedes money) and Honda – are all to a greater or lesser extent governed by global car manufacturers.
Excellent, except that car companies have shareholders, and shareholders like to see tangible returns, not £100-£200m departing into the ether to back an F1 team. In a world where dividends talk most and sales are declining an F1 team looks like an unnecessary expense, which it is. Whereas the likes of Williams go racing for the love of going racing, Honda go racing to sell Hondas, and F1 is an increasingly precarious place to do that.
Honda’s plunging balance sheet (like those of all car manufacturers) is largely a result of the diving US market. This is where the sales happen and this is where the profits are made. A bid US advertising push is what’s needed which 5 years ago with Indianapolis and Canada on the calendar was ideal. In 2009 it looks a little different – I cannot see a single person in the US sitting at home watching the Bahrain GP (at 4am) seeing the Honda tooling round in 17th place thinking ‘I gotta get me one of those’. Let alone £200m’s worth.
The bottom line is that for the teams F1 works well as a sporting spectacle, less well as a marketing exercise. As it is most F1 teams’ sponsorship deals usually come about because of serendipitous co-incidence – such as the team that got an £80m deal because the MD took a fancy to one of the PR staff – rather than being part of a global strategy from the sponsors themselves.
Let’s be honest, how often have you popped down the shops to buy product x because you saw it on the side of a racing car? In my case, not a lot. Given that I’ve been watching racing since I was three I should be smoking 200 a day now, while yapping on my Vodafone and banking with Santander.
The link between F1, the manufacturers and business is pretty boring because ultimately it detracts from what’s happening on track. However in 2009 it is likely to become the key issue as manufacturers pull out or dramatically reduce their investment.
The major plus side of all this is that we may see some more pure privateer ‘race’ teams in F1 and if some of the rumoured Honda buyers materialise then it could be very exciting. Hopefully the FIA and other teams will encourage the sale of the team to keep 20 cars on the grid.
Motor sport at all levels is the ultimate luxury pastime, from the weekend warriors right through the highest echelons, everyone goes racing because of a substantial financial indulgence somewhere along the line. But 2009 is not looking good as a year of monetary benevolence and it seems very unlikely that Honda will be F1’s only casualty. For the manufacturers it will be extremely difficult to justify thousands of layoffs where the combined annual salaries come to less than one weekends’ operating budget for the F1 team.
- Honda: a one-off or the first of many?
- More signs that manufacturers are starting to favour specification racing
- How the last global recession affected F1 teams – and how the next one might
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