Another credit crunch casualty — this one slightly more glamourous than its automotive brethren in the US and UK.
Honda pulled out of Formula One on Friday, dealing a major blow to the sport and ending a dream for Japan’s number two carmaker.
Amid slumping car sales triggered by the global economic crisis, Honda was no longer willing to bankroll the Formula One team and its estimated annual budget of $500m.
Takeo Fukui , Honda’s chief executive, told a news conference that a return to the sport could take time and added that there were no plans to continue as an engine supplier.
“We will enter into consultation with associates of Honda Racing F1 and its engine supplier Honda Racing Development regarding the future of the two companies. This will include offering the team for sale.”
There’s talk of Honda selling the unit off for a nominal one pound — with the buyer to assume what’s likely to be millions in wages and additional costs. Honda itself spent £200m on the team last year, according to the Times, presumably without much of a profit to show for it. Honda’s F1 team ended up with 14 points in the constructors championship season — coming in ninth out of err, 10 teams (The only team to score lower was Force India-Ferrari with zero points). For Honda, that works out to something like one point for every £14m spent. Not exactly a great return.
Makes us wonder how RAB Cap’s investment in Formula One rival the A1 Grand Prix is faring — if it hasn’t already been written down to extinction.
Negative car equity – FT Alphaville