A week after Toyota announced that it was pulling out of Formula One, the post-mortem has begun into what exactly went wrong – and what the implications are for the circuit.
A lot of attention has focused on the strategic mistakes that the Japanese team made during its eight years in the sport. But the reality is that F1 is an expensive luxury when your parent company is battling to survive a global recession. With Toyota’s investment in F1 put at around £200 million a season, it was an obvious cutback at a time when the parent company was reporting its first-ever financial loss.
Toyota – whose primary sponsor was Panasonic – isn’t the only Japanese company to pull back from motorsports in the last year. At the end of last season, Honda also withdrew from F1 – despite grand ambitions to promote its green credentials. Subsequently, we have seen Kawasaki pull out of MotoGP and Subaru quit rallying. Just ahead of Toyota’s pull-out, tyre manufacturer Bridgestone also announced that it would no longer participate in the circuit.
Those high-profile departures speak volumes about the weakness of the Japanese economy. But it’s not just Japanese car companies which are reining in their spend. General Motors has pulled back in Nascar while BMW has also quit F1. All eyes are now on Renault – which is also poised to make a decision on its future involvement in F1.
Despite such setbacks, it would be wrong to write off F1 – which has a habit of defying expectations. While Japan has backed away from the circuit, there is plenty of support from China, Southeast Asia, India, Russia and, most importantly, the oil rich Gulf States. This is evident both in terms of new sponsors (eg MegaFon, The National Bank of Abu Dhabi and Lenovo) – but also in terms of the news teams and stadia which have been (or are being) developed.
Similarly, there continues to be support from the likes of Mercedes and Ferrari – which show no desire to quit F1. In the case of the latter, a high-profile deal with Santander Bank suggests that sponsors are still attracted to the huge audience and corporate hospitality on offer by the circuit.
Next season will be particularly interesting for the domestic audience – with Jenson Button and Lewis Hamilton both expected to compete for the title. That prospect alone might be enough to lure a few Brit sponsors in the F1 fold.