Honda looking for a buyer for its F1 team

Honda is poised to quit Formula One: the Japanese carmaker is expected to announce Friday that the team is for sale with hopes a buyer can be found by the end of the year, BBC Sport reported. Formula One reporter David Croft said on BBC Radio 5 Live that he understands the team have enough money to operate until March.

Honda Racing F1 Team, Trucks.
Photo by xpb.cc.

"They have a month to find a buyer, otherwise they are closing the team," a Reuters source quoted team officials Ross Brawn and Nick Fry, who are attending the Formula One Teams' Association meeting under way in London.

Based in Brackley, England, Honda F1 employs nearly 800 people and runs at an annual cost of nearly $300 million a year. Only Force India, which did not score points, was lower ranked after the 2008 season.

The sale announcement is the first F1 shoe to drop in the wake of the global credit crisis. Honda's U.S. sales fell 31.6 percent in November, the New York Times reported. The report dropped company share price by 5 percent. The company had announced it would slow road-car production at plants in Japan, Europe and the United States. Reuters reported the company will have cut production in the United States by 50,000 vehicles this year.

Although Honda sales figures did not take as big of hit as those of top U.S. and Japanese carmakers save Ford, which reported a dropoff of 30.5 percent, a strong yen has hurt Japanese business. Bridgestone, F1's sole tire supplier, revised earnings expectations earlier this year, citing a strong yen and raw materials costs. Toyota's U.S. sales were off 33.9 percent in November; the company has offered 0 percent financing in a bid to find buyers. Panasonic, Toyota F1's major sponsor, recently cut its 2008 net profit projection by 90.3 percent.

FIA president Max Mosley announced in summer that F1 costs were not sustainable. Attempts to cut spending led to formation of FOTA and to proposals including Mosley's idea to use a single engine. Efforts to cut costs for small teams were approved in October but wouldn't be seen to affect a major player like Honda. Selling its F1 team emphasizes that Formula One remains prohibitively expensive.

The BBC's Croft reported the independent Williams F1 team faces financial troubles and Toyota is trimming expenses.

Honda entered F1 in 1963 with American drivers Ronnie Bucknum and Richie Ginther. Ginther supplied the team's first victory, at Mexico in 1965. John Surtees won the 1967 Italian Grand Prix. The team ceased competing after the 1968 season. Honda returned to F1 as an engine supplier in 1983 and continued in that capacity through 1992. Through various entities, the carmaker supplied engines thereafter until buying into a British American Tobacco-owned team in late 2004. Nearly a year later, Honda bought the remainder of the BAR team. Renamed Honda F1, the team finished fourth among constructors in 2006, eighth in 2007 and ninth in 2008.

For the past two seasons, Honda's F1 cars carried livery with Earth scenes consistent with the company's environmentally friendly road vehicles. Honda leaving F1 would leave drivers Jenson Button, Rubens Barrichello and Alex Wurz out of work. No reports have surfaced to indicate Honda plans changes to its Indycar engine supply or to the Acura Le Mans P1 project.

As teams spend the close season arranging funding, tracks already have been hit by the economic downturn. Sponsors of the French Grand Prix backed out, dropping the event from the calendar. The race in Canada was dropped by Formula One Management over financial issues and local and provincial governments have not been able to procure funding to continue the race in Montreal. Officials at the circuit in Hockenheim, Germany, have announced in the past fortnight that they cannot manage the cost of continuing a race there, even one that alternates as host with a German race at the Nurburgring.