Formula One: Racing Against Time
In just over a month, Melbourne will once again, be filled with the screams of high-revving engines and the scent of Formula One petrol fumes.
A potential no-show from this season's curtain raiser -- Team Honda. Japan's second biggest automaker announced it was pulling out of motorsports' premier racing event in December, due to the current global economic crisis. Honda is still looking for a buyer to takeover the running of the team, but time is running out. The January 31st deadline for interested parties to sign, seal and deliver their intent has come and gone. Looks like it’ll just be 18 cars on the grid in March.
Also facing an uncertain F1 future is Renault. The French manufacturer cut 100 jobs at its racing headquarters in Oxfordshire, and its key sponsor ING, is cutting its budget and reviewing its Formula One commitments. Renault’s CEO, Carlos Ghosn had previously said the team’s participation in F1 will be evaluated on a year-by-year basis.
The end is probably near for Renault in Formula One, despite having won both driver and team titles in 2005. Charismatic team owner, Flavio Briatore is looking at retirement in a couple of years while its No. 1 driver, Fernando Alonso, is constantly linked with the Ferrari stable. With two of its principals gone by end 2010 at earliest, we're looking at 16 cars left in the starting line-up.
Wait, it might just be 14. Toyota , which has one of the biggest budgets around, has nothing to show for it to date. The Japanese team now has to register a win this 2009 season or it could mean "Exit – Stage Left!"
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It’s not just Formula One that’s facing challenging times ahead. The World Rally Championship is another event that's shaken through its very foundations by the economic downturn. Subaru and Suzuki's decision to withdraw from the WRC leaves just two manufacturers, Citroen and Ford , in the series. And given how we’ve seen the Detroit 3 go to Capitol Hill pleading for cash, Ford's future in the sport is tenuous, to say the least.
Professional motorsport competitions are big business. TV money, sponsorship dollars, gate receipts and related merchandising, translate into billions of dollars. Some F1 teams reportedly spend nearly half a billion dollars each year. And for the manufacturer teams, getting on to the podium is part of the sales effort. "Win on Sunday, Sell on Monday" is the mantra. And winning also brings along new friends in the form of financial supporters and investors -- all hoping to cash on brand prestige.
The challenge is, for motorsports is to stay relevant in the current gloomy economic environment. With oil prices and its recent $147 a barrel spike, CO2 emissions remaining a hot topic, and the associated image of glamour, exclusiveness and excessiveness amid times of austerity -- things must change.
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Executive compensation looks set to be capped, perhaps F1 spending might be next in line. The countdown has begun for the season opener in Melbourne, and so has the search to find a sustainable future for Formula One.