The scenario surrounding F1 racing is quite grim. Last year, Honda abandoned F1 and soon BMW withdrew itself from Formula One with Mercedes-Benz also following suit.And now we have news that Toyota may too say “Sayonara” to Formula One racing.
Toyota’s Formula 1 team principal Tadashi Yamashima warned that the world’s largest car manufacturer’s involvement in F1 could come to an end soon. The reason behind is the result of steep decline in car sales.
This information must have broken the hearts of many F1 lovers. Especially, after the Toyota F1 team finished in the second place in the Singapore Grand Prix and the F1 race in Japan is scheduled over the coming weekend.
The world’s number one car maker Toyota is not doing good business because of the Motown slump. Toyota is likely to cut production by almost 10 per cent in order to minimise losses due to falling demand. Moreover, the Japanese car behemoth is pulling out of a joint venture business with GM in America.
It has happened for the first time that Toyota has planned to cut production to such an extent and it shows how badly it is faring in the current economic climate. Sales of Toyota in America have fallen by 34 per cent this year. Its luxury brand, Lexus, has been badly hit. In August Toyota forecast a net loss for 2009 of £3 billion, which is less than it feared but still unprecedented for the company.
Another threat to all the car companies is the end of Government sponsored car scrappage schemes in many key markets including the US, UK and Germany. These have prevented a total wash-out in the automotive sector during 2009, but are set to end in many countries in the coming months.
Although the company has signed up to the Concorde Agreement, it faces no financial penalty for walking away from Formula 1. It has some obligations, but nothing significant enough to prevent a walk-out if the business case for it was clear.
The team has yet to set a budget for the 2010 season and will not do so until mid November, by which time many drivers will already have signed up for other teams. With Williams set to switch its engine supply deal to Renault, the company has no customers for engines in the paddock.
Toyota has already informed both of its drivers that they are free to look for drives elsewhere.
Toyota’s Formula 1 team principal Tadashi Yamashima warned that the world’s largest car manufacturer’s involvement in F1 could come to an end soon. The reason behind is the result of steep decline in car sales.
This information must have broken the hearts of many F1 lovers. Especially, after the Toyota F1 team finished in the second place in the Singapore Grand Prix and the F1 race in Japan is scheduled over the coming weekend.
The world’s number one car maker Toyota is not doing good business because of the Motown slump. Toyota is likely to cut production by almost 10 per cent in order to minimise losses due to falling demand. Moreover, the Japanese car behemoth is pulling out of a joint venture business with GM in America.
It has happened for the first time that Toyota has planned to cut production to such an extent and it shows how badly it is faring in the current economic climate. Sales of Toyota in America have fallen by 34 per cent this year. Its luxury brand, Lexus, has been badly hit. In August Toyota forecast a net loss for 2009 of £3 billion, which is less than it feared but still unprecedented for the company.
Another threat to all the car companies is the end of Government sponsored car scrappage schemes in many key markets including the US, UK and Germany. These have prevented a total wash-out in the automotive sector during 2009, but are set to end in many countries in the coming months.
Although the company has signed up to the Concorde Agreement, it faces no financial penalty for walking away from Formula 1. It has some obligations, but nothing significant enough to prevent a walk-out if the business case for it was clear.
The team has yet to set a budget for the 2010 season and will not do so until mid November, by which time many drivers will already have signed up for other teams. With Williams set to switch its engine supply deal to Renault, the company has no customers for engines in the paddock.
Toyota has already informed both of its drivers that they are free to look for drives elsewhere.
