Recession forces Toyota off Formula One race track
Toyota's Tadashi Yamashita, F1 Team principal, gets emotional during a press conference to announce the company's withdrawal from the F1 Grand Prix in Tokyo, yesterday.
Thursday November 05 2009
TOYOTA, the world’s largest carmaker, will withdraw from the Formula One racing championship as the company cuts costs amid record losses.
The Japanese carmaker announced the decision at a briefing in Tokyo yesterday. The move may save Toyota 50 billion yen (€372m) a year, according to Koji Endo, managing director of Advanced Research Japan, a Tokyo-based equity research firm.
Honda, BMW and Bridgestone have also announced their withdrawal from the championship in the past year as the global recession cuts car sales.
“More than cutting fixed costs, pulling out of F-1 is significant in showing Toyota is focusing on its core business,” Mr Endo said.
Toyota, which announces second-quarter results today, in August predicted a net loss of 450 billion yen for the year ending March 31.
Company spokeswoman Ririko Takeuchi earlier declined to estimate the cost of participating in the racing championship.
Tokyo-based Honda spent about 20 billion yen a year operating the team, excluding engine and car development costs.
The carmaker re-assigned its racing team’s 400 engineers to speed up development of new technologies to improve fuel efficiency and emission levels for mass-produced cars.
BMW, which spent an estimated €200m a year on Formula One to market its brand, dropped out in July, a month after the biggest luxury carmaker reported a 13pc drop in car sales.
Bahrain The Federation Internationale de l’Automobile, F-1’s Parisbased ruling body, said in September that sports-car maker Lotus Cars Ltd will take BMW’s place in the 2010 championship, which starts March 14 in Bahrain. The 2009 season ended on Sunday.
Toyota, which failed to win a Grand Prix after joining F-1 in 2002, was one of four carmakers including Ferrari SpA’s team that in July signed up to stay through 2012.
Toyota finished fifth in this year’s constructors’ championship as the formerly Honda-owned Brawn GP team took the title.
Toyota unit Fuji International Speedway Co said in July it would stop hosting Japan’s Formula One Grand Prix race, citing the recession.
It was held this year at Honda’s Suzuka circuit. The $1bn series has also been marred by scandal and friction between the teams and FIA during the last three years.
Renault admitted to crashing on purpose at the 2008 Singapore Grand Prix to try to influence the outcome. In 2007, McLaren was fined $100m for spying on Ferrari.
© Bloomberg
