Honda's 2007 'Earth Car'. Image courtesy Red Cyan, licensed under creative commons
The World Motorsport Council, the decision making body of the FIA, approved a series of radical cost-cutting measures following the shock exit of Honda from F1.
On 5 December, Japan’s second largest car maker announced plans to withdraw from the 2009 season because of the difficult conditions in the global auto market, brought on by the financial situation.
This put around 1000 jobs at Honda Racing F1 team and engine supplier Honda Racing Development at risk.
With most teams having already finalised their driver line up for next year, Honda’s racers Jenson Button and Rubens Barrichello could be left without a seat in 2009.
The immediate prospects for Bruno Senna are also in doubt. The 25 year-old nephew of legendary racer Ayrton Senna had earlier tested for the team and was being considered as a replacement for fellow Brazilian Barrichello.
“Difficult Decision”
In a statement, Honda President and CEO Takeo Fukui said that the “difficult decision” had been taken by Honda to “protect its core business activities and secure the long term.”
Honda was one of the highest spenders in F1 with an estimated budget of £300m in 2008. Racing success was Mr. Fukui’s personal ambition.
However, Honda had failed to see results. At the end of the 2008 season, the team placed ninth out of ten teams, having scored only 14 points from 18 races.
With Bloomberg reporting Honda sales down by around 30% in the US market, it was only expected that Honda’s interests in motorsport would be the first to be cut back.
The move brought the focus back onto the financial viability of running a Formula One racing team.
According to the BBC, teams like Williams and Toyota remain “vulnerable” due to losses and high budgets.
Earlier during the 2008 season, Japan based Super Aguri too withdrew from racing due to financial difficulties.
What next?
But the team may still be on the grid in time for the first race in Australia on 29 March 2009.
The company’s statement confirms that the team has been put up for sale.
Chief Executive of Honda Racing F1, Nick Fry said on the team’s official website that they had already been approached by “potentially suitable” investors.
Reuters reports that the Formula One Teams Association has been given till Christmas to find a buyer.
BBC’s sports correspondent Adam Parsons estimates that the team could go for a nominal price of £1. However, the costs of running the team in the expensive sport of Formula One would be at least £40m.
Honda had been in racing since the 1960s. The team had earlier pulled out in 1968 before returning as an engine supplier in the 80s and team owner in 2004.
Since 2006, the team has been exclusively owned and run by Honda Motor Co., Ltd., when it finished fourth in the Constructors championship.
Click here for original article – F1: End of the era of extravagance?
