Why more manufacturers will follow Honda out of F1 (Ben Evans column)
Will other manufacturer teams follow Honda out of F1
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.
Read more
- 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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tifosi dude said on 11th December 2008, 20:27
“On a final note, I must laugh at those who feel the lack of tobacco sponsorship is part of the financial challenges seen in F1 today. As a dedicated non-smoker, I take great delight in not seeing tobacco adverts plastered all over the F1 world”
Yeah, not having the tobacco money is good, but its hard not to look at the sport and still think it’s without dirty money. The cash that comes from sketchy governments in China, Bahrain, Singapore and Malaysia are good examples. Also, brands like vodafone or shell or even the car manufacturers themselves aren’t really selling anything neccesary – to think any corporate sponsor or multinational is squeaky clean is wishful thinking.
I think the point made earlier, that nobody needs to go racing is well taken. This sport is a massive waste of money (I love it just the same), so I think this crisis has been a long time coming. As long as the sport is still what it is and I still want to wake up at 7am on a sunday morning to sip coffee and watch the european races, I’m willing to sacrifice some of the technological whatevers and big money deals that have made the sport what it is since the 1970s
Gman said on 11th December 2008, 22:22
Tifosi Dude,
Indeed there is plenty of what you call “dirty money” in the sport: those government funds that get pumped into races in Asia and the Middle East have created a model that is forcing out GPs in North America and Europe. My tobacco stance is purely a personal opinion about an issue that, to me, is a moral issue affecting health and wellness standards. I am happy that any sport I watch is free from tobacco sponsorship- I can’t tell you how disgusted I got, even as a little kid, when the “Winston Cup” would roll into town at Pocono- it is much more refreshing now to hear about the “Sprint Cup” in the local media.
beneboy said on 12th December 2008, 19:25
Before I start I want to make clear I respect your opinion & this isn’t in any way a personal attack, although it is a bit off topic.
McDonnalds have several racing & other sports teams covered in the Golden Arches, as do Mars, Cadbury’s, Ben & Jerry’s & a very long list of other unhealthy food makers. Heart disease, diabetes & obesity are far bigger killers than cigarettes.
Playboy and other pornographers have also used sport to advertise themselves, the Pit Girls are bad enough but come on, Playboy ?
The Banks are the most corrupt organisations in the world who profit from dodgy deals & ruining peoples lives.
Vehicle emissions have also been proven to contribute to many cases of cancer, both the British & American medical researchers have published several papers in recent years documenting the correlation between your exposure to exhaust fumes & your chances of getting cancer.
Living next to a set of traffic lights or a busy junction on a busy road increases your chance of getting cancer dramatically compared to someone who lives on a quiet cul-de-sac (don’t know if you call them this in the states, imagine a horseshoe of houses with the open end entering the road).
There are several reasons that this research is not widely debated in the mainstream press that we don’t need to go into now.
There has also been some research showing that some people in Asia & South America who smoke as much as Westerners but do not get cancer anywhere near as often as their Western counterparts. These people all have one thing in common, they live in areas that do not have permanent roads & very rarely see a motorised vehicle.
While I do not deny that smoking can increase your chances of getting cancer or other related diseases I feel that the crusade against smokers & cigarettes is getting a bit silly.
The propaganda being pedalled by some anti-smoking organisations is as bad, if not worse, than some of the propaganda put about by the cigarette companies years ago.
As I said, I’m not trying to start an argument or p*@s you off. I just don’t think the ban on tobacco advertising makes sense considering the other things that advertise using sport.
Apologies to everyone else for having to read such a long winded rant, I assure you all I am seeking professional help for it :~)
Polak said on 13th December 2008, 14:02
when I was shopping around for a bank I strongly considered ING. It felt like ING was a friendly European bank in USA, and one that has an interest in F1. So yes, seeing a company in F1 builds tat brands image. It won’t make you run to the dealer and buy a Honda, but it will stick in your head and come out when you are deciding what car to purchase next.