Honda’s withdrawal in context

I had planned on my next post being the second part of my driver rankings. Unfortunately, real life events have intervened. In the meantime, events have overtaken me as Formula 1 was hit by a huge news story on Friday — Honda’s sudden withdrawal from the sport.

Now, normally such an announcement wouldn’t raise too many eyebrows. Ever since I started watching Formula 1 in the mid-1990s, I have watched teams and manufacturers come and go on a regular basis.

I saw Renault withdraw from the sport as engine supplier to Williams and Benetton in 1997, only to return as a fully-fledged constructor when they bought the Benetton team just a few years later in 2000. Ford came to the party when they bought the Stewart team in 1999, only to leave the sport entirely a few years later in 2004. Peugeot left the sport in a huff at their own lack of success in 2000, having only joined the circus in 1994.

I learnt quickly, therefore, that manufacturers’ interest in F1 is almost always transient. For every Mercedes that appears fully committed, there are a handful of Renaults and Hondas who will enter and exit the sport according to the wind direction.

Honda’s announcement was shocking partly because of its suddenness. The speed with which the decision was taken is made clear when you read James Allen’s account. There is also the fact that at the start of this year Honda owned not one but two F1 teams. Now they have dramatically trimmed right back to zero, and will not even offer an engine supply to any teams next season.

There is also the fact that Honda were massive spenders in F1. This appeared to signify a magnificent commitment to the sport, despite the relative lack of success. But the flipside of this is that it made Honda an absolute laughing stock within the sport.

The huge amount of money the Honda F1 team spent also made it more vulnerable to the red pen of the bosses. No other manufacturer will save as much money by axing their F1 team. It may be true that Honda’s withdrawal is for political reasons, as former BAR-Honda driver Jacques Villeneuve posits. But it is Honda’s huge costs, coupled with the utter lack of success, that made it vulnerable to such political manoeuvring.

As such, the withdrawal of Honda is not such a shock when you think about it, even though I wouldn’t have predicted it. Moreover, Honda is not a fixture of Formula 1 like Ferrari, or even Mercedes. The current incarnation of the Honda F1 project only got the nod in 1998, and even then it was quickly reigned in to become a mere engine supply deal with BAR. Honda bought the team when tobacco sponsorship left the sport just a few years ago. Despite having run a team in the 1960s, and the huge success of the corporation as an engine supplier in the 1980s, an F1 institution it is not.

What makes people worried, though, is the economic climate in which this news has come. Whereas Ford found a buyer for Jaguar Racing easily enough in Red Bull in 2003, buyers for Honda will be thin on the ground due to the lack of credit that will be available to interested parties.

Next season’s Formula 1 calendar has already lost two races — Canada and France — and China and both German circuits currently in use have recently warned that they may not hold races for much longer. Again, it all comes down to money, with circuit owners being unable or unwilling to pay Bernie Ecclestone’s fast-increasing costs of staging a grand prix at the same time as attendances are tumbling.

Meanwhile, car sales are in freefall on a global scale, with a number of large car manufacturers seemingly in serious financial danger unless drastic action is taken. In the backdrop of these events, participation in motorsports looks like an extravagance. Even if the old “win on Sunday, sell on Monday” mantra holds true in normal times, right now western consumers are tightening their belts meaning that any increase in sales may be too small to be justifiable.

As such, Honda’s withdrawal is seen as just another sign that Formula 1 faces a crisis. We have a slimmed-down calendar that relies increasingly on flyaway races away from the sport’s European heartland to help pay CVC’s bills, and no races in the vitally important North American market for the first time in five decades.

Now there is a slimmed-down grid of just 18 cars — a number that is getting smaller. When you consider that the 2008 season was originally destined to contain 24 entries, F1 has essentially lost a quarter of its teams in a matter of months. Formula 1 is beginning to look like a shadow of its former self.

Now the question everyone is asking is, “who is next?” Initially the finger pointed at Toyota. Many pointed out that Toyota are only really in F1 because Honda were there. Toyota are also, like Honda, huge spenders with little to show for it.

But Toyota quickly put the lid on the speculation by issuing a statement that appeared to affirm their commitment to F1 — although, as James Allen pointed out, the word “currently” in front of “committed” looks like a carefully worded way to give them an easy exit should things take a turn for the worse. After all, if Honda’s decision was so sudden, why would a decision from Toyota not be?

BMW and Mercedes-Benz have both also affirmed their commitment to F1. But one manufacturer has spoken with a deafening silence.

I always suspected that the first manufacturer to go would be Renault. Its CEO, Carlos Ghosn, is said to be sceptical of motorsport participation, and there has been a question mark over the team’s future ever since he joined Renault in 2005. Besides which, Renault’s history in F1 has shown that it will come and go as it pleases.

Even though some news websites have reported that Renault is committed to F1, I have seen no quotes which the other manufacturers have been happy enough to provide. Was the media palmed off with a stock answer from a Renault spokesperson?

Meanwhile, rumours circulate around Red Bull. Dietrich Mateschitz recently re-bought Gerhard Berger’s 50% stake in Toro Rosso, but many think he did this so that he could sell it more easily. But with billions to play with and no car sales to drop off a cliff, I see little reason why he would pull the plug on both teams.

Williams has been perceived to be in a vulnerable position for a few years now. It is the last brave privateer team that is in it not to sell cars and not to sell drinks, but purely for the love of racing. It has been hit hard, but it doesn’t have to be seen to be reducing costs for political reasons like the manufacturers have to. Ironically, Williams may be safer than some of the manufacturers now.

We will just have to wait and see. It’s clear that Formula 1 is currently undergoing a massive change. Could the ground be being laid for a return to a privateer era? If so, you won’t find me complaining too much, no matter how painful the current events are in the medium-term.


  1. the more I think about it the more I think this Honda pull out is a good thing. I however hope that the team will be picked up by someone like David Richards and not by another car manufacturer ( speculates about Citroen/Peugeot) or some billionaires that would care about everything but not about racing.

    F1 needs to go back to the racing people.

    Yes, it is good to have manufacturers involved in the sport, but they can’t rule it (and ruin it).

    As you mentioned above, when Renault left in 1997 nothing happened, Williams took another engine, when Honda left in 1993 nothing happened, McLaren went for another engine …

    when F1 becomes the ridiculous arms race between corporate rivals – Honda vs Toyota or BMW vs Mercedes, nothing good can come out of it …

  2. Maybe you should take an Spanish dictionary and pay a visit to:
    Currently analysing team’s budgets and guessing who’s next.
    And now, my view. Toyota has to stay a little bit more to show that they are more powerful than Honda. They spent too much. For example, Button was the 4th highest paid in the grid. Each of his points cost 3M$ (!). The points of Lewis Hamilton cost 6k$ and the ones of Alonso 220k$.
    Furthermore, Honda paid the 87% of the team, while Toyota is paying 67%. Ferrari only costs 14% to FIAT.
    All this data are being posted in the mentioned blog BTW.