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Why McLaren with Honda makes sense

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Why McLaren with Honda makes sense
Mar 7, 2013, 12:20 PM

There has been a lot of speculation in recent days about Honda and McLaren reviving the famous partnership, which brought domination of F1 in the l...

There has been a lot of speculation in recent days about Honda and McLaren reviving the famous partnership, which brought domination of F1 in the later 1980s and early 1990s.

It began towards the end of last season, but has grown in intensity recently. This is probably due to the fact that attention is now focussing on the major engine changes in 2014 and McLaren has every reason to want to move away from Mercedes, despite having an option to use their new generation hybrid engines in 2014 and 2015.

In the last few years Mercedes has withdrawn as a shareholder and major investor in the McLaren team, poached Lewis Hamilton and has been busy doing the same with technical director Paddy Lowe. That's not one body blow, it's a pummelling.

To say that there is no love lost between the two would be putting it mildly.

On top of that they will be aware that the 2014 Mercedes engine will be precisely what Mercedes wants it to be from their own chassis design point of view. The customers, like McLaren, will have to make do with what they are given.

For a team with McLaren's self-esteem, the loss of Hamilton and this customer status is too much; they have to act to restore their pride.

Team principal Martin Whitmarsh did little to dampen the Honda speculation when he told SKY, "There's a lot of speculation and I've heard Porsche, Hyundai, Honda, all those sorts of names. I hope for Formula One that these manufacturers come back - we need them in the sport. In the longer term, who knows what's going to happen."

Yesterday at the Geneva Motor Show there was a lot of discussion about this subject. Speaking there to Rolf Ganter, the senior automotive analyst from UBS, he sees the market conditions for Honda to return to F1 as highly favourable,

"Honda is not so well known in Europe; they are focussed on Asia and the US. But F1 engagement could bring them back to the European table," he said.

"And don't forget what is happening now with the Japanese producers. Look at the currency; how much the Japanese yen weakened - around 20% versus the dollar and the euro. And that puts these companies on a more competitive situation. This means that they can make more profit on their cars or put in more features or even sell the car cheaper.

"Honda was always famous for having high revving engines and for them it's a good place to be back in Formula 1. As a stock I like it and as a company I like it and I think it would make sense."

Another compelling reason to return is that the 1.6 litre hybrid turbo engine is core business for Honda, where 2.4 litre V8s are not. Few manufacturers are making production V8 engines any more.

However, Honda is well aware that Formula 1 is a cruel business: if you are winning and doing well, it can boost your brand image globally, as it did for Honda in the Senna and Prost era with McLaren.

But if you are doing badly, as Honda did from 2006 to 2008, it can actually damage your brand image. You are then spending millions to damage your brand, as Jaguar did for example, and that makes no sense at all. Honda was not cut out for team ownership, but partnership with a top team like McLaren is different.

Arguably since the Honda team withdrew from F1 it's model range has lost some of its glamour and sportiness and this would be restored by fighting at the front of F1 again.

History suggests it would be an engagement with a finite time period, Honda doesn't tend to stick around for more than seven or eight years, but F1's global footprint these days matches their key markets and supplying engines is much cheaper than running a team.

From a business perspective it makes sense. And as business is usually the driver for all decisions taken around F1, there is likely to be more than a grain of truth in it.

One final note - if a McLaren Honda partnership were lined up, sources say it would not happen before 2015 for logistical reasons. There would also be variations and changes from the Technical Working Group during the first year and Honda would benefit from observing that.

This would leave Mercedes supplying its engine to McLaren in 2014, knowing that Honda engineers would be crawling all over it from later this year onwards.

They would be very uncomfortable about that.

* To hear more from my discussions with Rolf Ganter about manufacturers and F1, check out the first JA on F1 Podcast of 2013, which will be live here on the site by Monday.
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