Why are BMW really quitting F1?

BMW's disastrous 2009 season will be their last for now

BMW's disastrous 2009 season will be their last for now

The announcement yesterday that BMW is to quit F1 was a shock – at least, until Michael Schumacher announced he was making a comeback.

BMW’s statement had much to say about their corporate strategy and implied reasons to do with environmentally-friendly technology were at the heart of their decision.

Is that really all there is to it? Or, as the FIA claims, is it all to do with costs?

BMW’s explanation

Norbert Reithofer’s explanation for BMW’s decision to leave F1 is predictably smothered in corporate jargon:

Everyone knows that the BMW brand embodies sportiness with sheer driving pleasure. Sportiness and fair competition are firmly encoded in our DNA. This is why we will remain loyal to motor sports. But we will do this in series that enable us to transfer technology more directly and to realise additional synergies, while strengthening our brand values. This is in our customers? best interest.
Norbert Reithofer

One clear message is that despite leaving F1 they are not leaving motor racing:

BMW will continue to be actively involved in other motor sports series.
BMW statement

Which other sports might these be?

BMW will appear on the starting grid in the touring car series and young driver promotion program in Formula BMW. This will be supplemented by BMW?s participation in ALMS, the American Le Mans Series, endurance races and close-to-production customer sports. Furthermore, BMW Motorrad Motorsport will continue its campaigns, with the super bike world championship leading the way.
BMW statement

Which sounds like pretty much everything besides Formula 1, including the World Touring Car Championship where it races its 3 Series, despite BMW’s many (legitimate) grievances with how badly the FIA has run the championship.

So why single out Formula 1?:

Premium [brands] will increasingly be defined in terms of sustainability and environmental compatibility. This is an area in which we want to remain in the lead. In line with our Strategy Number ONE, we are continually reviewing all projects and initiatives to check them for future viability and sustainability. Our Formula One campaign is thus less a key promoter for us.
Norbert Reithofer

The statement adds:

Resources freed up as a result are to be dedicated to the development of new drive technologies and projects in the field of sustainability.
BMW statement

In other words, F1 isn’t green enough. We shouldn’t be too quick to cynically dismiss the suggestion: BMW produces among the most efficient road cars in their classes and at the beginning of 2009 was the only remaining defender of KERS. Had the FIA’s scale of ambition for the system this year been greater, and had the other teams not decided to drop it for 2010, might things have been different?

Motorsport director Mario Theissen hints that dissatisfaction with the team’s performance in 2009 may also have played a role in the decision:

Of course, we, the employees in Hinwil and Munich, would all have liked to continue this ambitious campaign and show that this season was just a hiccup following three successful years. But I can understand why this decision was made from a corporate perspective.
Mario Theissen

Nowhere in BMW’s statement do they mention the question of costs, which has dogged F1 years, particularly in the months since Honda’s departure. But would they admit to being driven out of the sport by the expense even if that was the case?

Costs

The FIA clearly believes the reason is costs. In a statement today (with a distinctively Mosleyian air of self-satisfaction) it said:

This is why the FIA prepared regulations to reduce costs drastically. These measures were needed to alleviate the pressure on manufacturers following Honda’s withdrawal but also to make it possible for new teams to enter.

Had these regulations not been so strongly opposed by a number of team principals, the withdrawal of BMW and further such announcements in the future might have been avoided.

The statement judiciously avoids pointing out that one of the teas allied to FOTA in oppossing the budget cap rules was BMW itself. Therein lies the rub: the Max Mosley’s attempt to impose a budget cap F1 was a political failure which alienated the very people it was supposed to save.

Nor can we rule out the possibility that, following the Mosley ‘Nazi sadomasochism’ scandal last year and Bernie Ecclestone’s words in praise of Hitler this year, BMW didn’t want to be tainted by association.

Mosley at least had one thing dead right: the decision to axe the F1 team is not taken by the motorsport men – the Mario Theissens. It comes from the board and, just as it was with Honda, the decision is is taken as quickly as the flicking of a light switch.

Why do you believe BMW is leaving F1?

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70 comments on Why are BMW really quitting F1?

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  1. Sebastien Carter said on 30th July 2009, 9:26

    I think it’s a mixture of all the reasons. BMW have always been pretty firm with it’s do or die targets and this year, despite all the effort put into KERS, they just haven’t risen to the challenge. That being said, I have a slight suspiscion that the “F! isn’t green” arguement is a little coy, and maybe used to cover up real reasons.

    But don’t you just love how to FIA ignore all of that and states their own reason why BMW left? It’s as if Max is trying to use them as a Pawn in his cost cutting game!

  2. pawelf1 said on 30th July 2009, 9:29

    I think that they are quiting because the car is so ugly. I watched today some races from the past 2-3 years and i think that bMw car was a beauty and what had happened now in 2009 is just a shame…
    I know that beautifull car dosent meen that it’s fast but in some way it really is. I am going back to those changes in regulations but they all made some there a mistake ferrari mclaren bmw but only the last one can’t find a solution. I hope that Kubica will find a new team becasue Nick’s carrier should be over by end of season

    • Charlie said on 30th July 2009, 12:23

      Personally I feel all this talk about beauty is post-rationalisation based on performance.

      Everyone thought the McLaren was beautiful before the start of the season and tipped it to be a winner. I didn’t hear anyone talking about it again for the first nine races of this year.

      Any engineer who truly believes that a beautiful car is a fast car (or that a car is fast because it is beautiful) needs to have their head examined.

      Fast cars are beautiful (or slow cars ugly) because of the halo effect of being fast, not because of aesthetics.

      Rant over!

      • matt said on 30th July 2009, 13:41

        No, I think the McLaren has been the best looking car all season. I thought the Red Bull was nice until they gave it a wide nose. Admittedley the Brawn probably looks better because it wins though.

  3. I think you hit the nail on the head Keith. I don’t think BMW quit F1 because of the cost. If smaller teams like BrawnGP and the new teams entering F1 next year can afford F1, then certainly a company as big as BMW can as well.

    The world greatly underestimates how focused BMW as a company is on “going green”. Although they do produce some un-green cars, they decided to rather produce a small efficient sport car (to be unveiled soon), rather than a supercar to compete against the Audi R8. This is a powerful message, and clearly states what their mission is. I believe that they have now found that without KERS F1 can no longer be a showcase for their green technologies.

    • Kovy said on 30th July 2009, 10:36

      Even KERS was a poor green initiative. It’ll never become road relevant if teams are told exactly what they must do to be environmentally friendly, and aren’t allowed to develop it freely.

  4. Chalky said on 30th July 2009, 9:37

    Perhaps they are going to concentrate on this:
    http://www.autoweek.com/article/20081117/GREEN/811179995

    and race it at Le Mans.

    What would be better for BMW. Stick with a flawed F1 or find a green supercar and take it racing.

    ALMS already have the Green X Challenge.
    http://www.americanlemans.com/index_green.php

    What does F1 have?

  5. Everything is about money. The F1 team itself doesn’t necessarily have to make a monetary profit as long as the benefits to the mother company in technology and promotion were high enough. It’s hard to put a monetary value on some of these benefits, but companies have to do it. And clearly they decided the benefits were not high enough.

    Earlier they complained about the possibility that F1 would not compete in any of their biggest markets, such as the US, UK and Germany. This devalues the value of the promotion / advertising benefits of participating in the series. We can blame Bernie for this writeoff.

    • Hallard said on 30th July 2009, 16:01

      I believe you are absolutely correct. F1 was not valuable enough for them to continue participating. Even if a team is losing money on an F1 team they can (in most cases) justify it with the brand exposure that F1 provides. And F1 has a very poor image these days. Between the constant (and overly publicized) quarreling of the sports key figures, Max and Bernie’s respective Nazi-related ordeals, akwardly proportioned cars that still dont enhance overtaking, lack of grands prix in key markets where cars are sold, key sponsor’s wavering in their commitments to the F1 teams, and BMWs surprising performance deficit this year, it makes the most sense for them to leave. Business is business, as far as the board is concerned.

  6. Ronman said on 30th July 2009, 9:47

    BMW had the wind knocked out of them when they realized that this year, they will not even be able to compete for points.

    from leading the championships almost a year ago, to playing catch up with the back markers, means that something very wrong has taken place. and if they truly wanted to get back to their competitive ways, they would have already done so, but you could sense (now confirmed with hindsight)that they were not really trying…

    Cost is the most definite thing that sealed the deal, but i’m sure their PR and strategy team get paid a lot to be able to play down the premium-ness of F1…

    my commiserations to Kubica and Heidfeld, i hope they find good teams to go to next year, neither can afford a year or two with a team under construction,.

    • toma said on 1st August 2009, 1:53

      Quality, Ronman. BMW copped out because let’s face it, being at the back of the grid was just too painful for a company which prides itself in being Germany’s sportiest manufacturer. All this codswallop about green is a diversion. Of course BMW is going green, but do you think they would be quitting if they were well in the points??

  7. Ethnic_Tension said on 30th July 2009, 9:50

    It’s not about money. BMW has simply lost the plot. They cancelled the new M3 CSL in favour of the X5M and X6M. They’re introducing the cars such as the 5-series GT. They no longer care about true sport cars and racing. It simply about maintaining a sports image whilst flogging of cars to the niche market people who couldn’t care less how the car drives as long as it has a BMW badge on it. It is a shame that BMW has left F1.

  8. patrickl said on 30th July 2009, 9:56

    The statement judiciously avoids pointing out that one of the teas allied to FOTA in oppossing the budget cap rules was BMW itself.

    Actually the whole budget cap idea was proposed in 2007 by Honda (Ross Brawn and Nick Fry) and quickly adopted by people like Frank Williams and Mario Theissen.

    There are plenty quotes of these people (and Briatore and Horner) that a budget cap is the only way to go forward.

    Even during the budget cap row Mario Theissen kept saying a budget cap would not be a problem, but on a more realistic level and with a more normal glide path.

    I wouldn’t be surprised if the lack of budget cap is one of the major reasons for them to pull out.

    Of course their lack of success is the other one, but in F1 it’s a fact that success costs money. It’s impossible to compete with a half the budget and win.

    And no Brawn doesn’t do it on half a budget, that car cost a fortune and Red Bull run two teams, I wonder what their budget really is. Besides both Brawn and Red Bull might run into trouble keeping up with the big boys soon.

  9. Jonesracing82 said on 30th July 2009, 9:59

    i am fast becoming very annoyed with Manufacturers, they have everything thier way, even get the rules written to suit them and then they turn around and leave when it suits them without caring for the sport!
    Sauber may not have had the success, but he’d be staying in the sport if he could afford to…….

    • Agree. Manufacturers are not the future of F1 and never have been. For all their faults, the FIA have been warning about this for years….

      • Charlie said on 30th July 2009, 12:26

        …and the FIA courted them beforehand…

      • dsob said on 31st July 2009, 5:11

        For all their faults, the FIA have been warning about this for years….

        And for years it has been FiA, well of course read that “Mosley”, that has done everythig possible to drive a stake through the heart of the manufacturers.

        From back when Mosley was legal advisor to Formula One Constructors Association-which did NOT include the manufacturers-Mosley has held no great love for the manufacturers and has, at any possible opportunity, done whatever he could to hurt them.

  10. Pingguest said on 30th July 2009, 10:08

    Not only the poor performances of this year play an important role, but most important motives are lack of innovation and recent scandals (“Spank-gate” and the separation).

  11. Damn suits.

  12. HounslowBusGarage said on 30th July 2009, 10:10

    I think there’s a lot of truth in DCs comment. The board of any company will examine the plus/minus euquation of being involved in any activity and if the result comes up negative consistently, they are legally bound to take action as part of their responsibility to their shareholders.
    BMW are in existence to sell cars and make money. If the company is feeling the pinch, and if their F1 racing team is consistently being beaten by one of their main car-retail rivals (Mercedes), they will have to look for an alternative arena in which to show themselves.
    That’s why BMW are involved in WTCC – they can be top German dog there. And that’s also why they won’t go into DTM – too much risk of being overshadowed by Audi and Mercedes.
    Keith, the only part of you article that I question is the that BMW may be somehow uncomfortable to be associated with the Mosley/Nazi affair. It doen’t seem to be bothering Mercedes very much – and of course, Mosley won his action against the newspaper making the ‘Nazi’ allegations.
    I think all that’s blown over, and rendered a bit irrelelvant by the close finish to last season and the turmoil of the accepted order this year.
    Perhaps one of the final reasons for BMW’s apparently ‘snap’ decision to withdraw from F1 was the return of MacLaren Mercedes to the top step of the podium. Perhaps BMW did not feel too unsuccessful by comparison when Mercedes were languishing around middle bottom earlier this season. But their return to winning might have made BMW realise that their F1 successes were totally inadequate by comparison

    • Adrian said on 30th July 2009, 11:17

      I disagree that McLaren Mercedes’ return to the top step was anything to do with this. Mercedes has been winning since the beginning of this season thanks to BrawnGP.

      I do think BMW’s lack of results played a large part in the decision and I think the “snap” timing of this was in part due to the imminent signing of the new Concorde Agreement which would have commited them to the sport until 2012…

      • Spud said on 30th July 2009, 11:25

        I think the “snap” timing of this was in part due to the imminent signing of the new Concorde Agreement which would have commited them to the sport until 2012…

        Thats exactly what the problem was.

        Its a big fall for BMW they were brilliant last year but completely rubbish this year.

      • Achilles said on 30th July 2009, 12:19

        I agree, the signing on for another 3 years, with a strong possibility of being a middle-of-the-road team, will have been a major factor, build in the lack of money to spend your way out of trouble, and you have a situation where the continuation in F1 could have been detrimental to the image of BMW.

      • HounslowBusGarage said on 30th July 2009, 13:29

        True.

  13. Ronman said on 30th July 2009, 10:29

    i have a feeling that many of the people daming budget cuts only weeks ago are now damning the suits that canceled their introduction… tsk tsk tsk… be careful what you wish for…

  14. IDR said on 30th July 2009, 11:13

    How have been managed F1:

    1) As one guy (or guys) become billionaire taking out 50% revenues of F1’s value chain for the next 100 years, those who produce the show has to reduce their budgets to a minimal fraction.

    “Sorry guys whe have taken the money out so you have to spend 80% less if you want this formula alive”

    2) Most of the traditional circuits, located in the main markets for motorcar manufacters surrendering to the fact they cannot hold a F1 GP under the current economic scheme (stablished by the same guy, btw)

    So, no races in France, Canada, USA, next one: ¿Germany?, even China is thinking not to renew the current agreement.

    3) Changing technical rules almost every year.

    V10 Engines? no more. Meanwhile, BMW launching their M-Series based on V10 engines…

    4) Standarization, new wave in F1: innovation is not allowed. All technical, and sporting rules made through “commettees”.

    As a proverb says: “A Camel is a Horse designed by a commettee”

    5) Sporting rules and guidance procedures with no consistency, allowing all kind of different interpretations according to political interests or personal ego-fights.

    “Do you want to enter into F1 champioship?, Well you must agree with Cosworth”.

    “I don’t like what Flavio have said about me so ban his team for a race.

    6) Long term in F1 means 3-4 weeks.

    You only have to download from FIA official page, 2009 sporting and techical rules (with control changes) and you will discover a “world in technicolor”.

    I wonder myself how on earth a motorcar manufacturer can match this, with their own estrategy. What is a miracle is still having the rest puting their effort in F1.

    • Bartholomew said on 30th July 2009, 11:30

      Very good comment. This world of F1 politics is enough to drive everyone crazy.
      A serious company like BMW must feel they are in a Three Stooges movie.

    • Striay said on 30th July 2009, 12:35

      Very funny and true indeed!!

      • IDR said on 30th July 2009, 12:43

        Oh!

        I was not pretending being funny, but this is what happens when one write in other language!

        • Kathryn S said on 30th July 2009, 22:25

          Hi, IDR,

          You’ve been expressing this point of view since the FIA/FOTA clash came about…and I think it really keys into the problems.

          From my point of view in the US, the recent embarrassments with Max and Bernie have really made the problem much worse. The only time non-F1 fans hear about F-1 in the US is when the powers that be do or say ridiculous (for a lack of a better word) things. What reputable company wants to their name to be associated with such goings on.

    • phoros said on 30th July 2009, 12:48

      Agree. I’ve wondered for few months how such huge economic, technical and political players like BMW, Mercedes or Toyota can stand all those more and more ridiculous ideas of Max and Bernie.

      Money? Maybe. But also dignity and PR.

      And of course successes on track. And lack of them was the last nail to the coffin.

  15. Maurice said on 30th July 2009, 11:15

    BMW are effectively admitting that they are no longer interested in proper motorsport.

    Premium [brands] will increasingly be defined in terms of sustainability and environmental compatibility. This is an area in which we want to remain in the lead. In line with our Strategy Number ONE, we are continually reviewing all projects and initiatives to check them for future viability and sustainability. Our Formula One campaign is thus less a key promoter for us.

    I read that and see Norbert Reithofer talking about marketing BMW more effectively as a caring sharing environmentally considerate company. They’re really stuck on this point. Why stick up for KERS when all other teams wanted it put back for a year? Answer green credentials. Why abandon the system in June? Answer it was a disaster that didn’t benefit their performance in the same way McLaren and Ferrari were experiencing at the time. Also, their system was clearly inferior to the Mercedes system. The coup de grace? Answer Mercedes winning and Ferrari finishing second at Hungaroring. Just as relevant was the upturn in Renault’s performance in Germany and Hungary. BMW were not progressing and like good little corporate types who thought F1 would be like delivering some road car project, they totally underestimated the intellectual resources required to pull them out of the mire. As I wrote in the other thread Sir Frank must have allowed himself a cheeky little smile when he heard they were pulling out.

    • the BMW press relese is just greenwash and short termisam alot of teh otehr series they compete in 95% of the public havnt heard of.

      the only other race with anything like the clout of f1 is Le Mans and thats Audi’s playground.

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