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Page last updated at 05:29 GMT, Friday, 5 December 2008

Honda to pull out of Formula One

Takeo Fukui
Takeo Fukui made an emotional announcement

Honda is pulling out of Formula One, blaming the world economic crisis for plans to sell its team, which costs �200m a year to run.

Sources told BBC Sport the team were "optimistic" they would continue, but an investor had not yet been found.

A deadline of January has been set to find a buyer but workers at the UK Brackley base have been told to expect redundancy letters before Christmas.

In addition, Honda said it would no longer supply Formula One with engines.

"Honda Motor Co. has come to the conclusion that we will withdraw from all Formula One activities, making 2008 the last season for participation," said Honda president Takeo Fukui at an emotional press conference.

"This difficult decision has been made in light of the quickly deteriorating operating environment facing the global auto industry... and the sudden contraction of the world economies," he added.

Rubens Barrichello at the Brazilian Grand Prix
Honda were the lowest-placed of the points-scoring teams in 2008

According to the Reuters news agency, team bosses Ross Brawn and Nick Fry told a meeting of the Formula One Teams' Association: "They have a month to find a buyer, otherwise they are closing the team."

Honda appointed Brawn, the man who masterminded seven world titles for Michael Schumacher, as their team principal prior to the start of the 2008 season.

His arrival was seen as the signal for the start of a concerted push for success by Honda after several seasons as also-rans.

The company returned to F1 as a team owner and car builder in 2005, having spent five years as an engine supplier to the British American Racing team.

But they have struggled to make an impact at the top levels of the sport.

Their sole victory of the modern era came at the Hungarian Grand Prix in 2006, which was won by Englishman Jenson Button.

But they have been uncompetitive in the last two seasons, a fact that would have made their decision to quit the sport easier.

Button will be left unattached for the 2009 season, though some places with mid-ranking teams remain.

Honda's decision could also spell the end of the F1 career of Brazilian veteran Rubens Barrichello.

The 36-year-old winner of nine Grands Prix was competing with his novice compatriot Bruno Senna, the nephew of F1 legend Ayrton Senna, for a seat at Honda in 2009.

Honda recently cut road vehicle production as a response to the global economic crisis.

A notoriously expensive sport in which to compete, F1 teams have spent recent months in intensive discussions over cost-cutting measures.

Max Mosley, president of world motorsport governing body the FIA, recently urged teams to find ways to reduce costs.

"Formula One is becoming unsustainable," said Mosley in July.

"The major manufacturers are currently employing up to 1,000 people to put two cars on the grid. This is clearly unacceptable at a time when all these companies are facing tough market conditions."

In October, a deal was reached to reduce costs for smaller teams in 2009 and 2010.

Considered a major player within Formula One, Honda bankrolls more than 800 staff at the team's Northamptonshire base and had the largest budget in the sport.

"I am told that for �1 you can now buy the Honda F1 team," said BBC sports news correspondent Adam Parsons.

BBC Radio 5 Live's F1 commentator, David Croft, said Honda's withdrawal could have profound consequences for the sport.

Jenson Button
Honda team created in 2006 after BAR team was taken over
Finished fourth in 2006 constructors' championship with 86 points, but struggled to eighth in 2007 (six points) and ninth in 2008 (14 points)
Team costs Honda �200m annually with more than 800 staff at Brackley
Honda ran F1 cars with minimal advertising, meaning more funding had to come from Japanese parent company
English driver Jenson Button (above) could lose his place in the sport if the team were to fold
"This has serious implications for F1, not just because there will be only 18 cars on the grid," said Croft.

"It's the start of the sport as a whole feeling the pinch. Williams are reported to be in financial difficulties, Toyota are trimming down their budget as well.

"Honda are a car company whose sales have dropped by 41% in the last quarter, they're closing their Swindon factory for two months at the start of next year, and obviously feeling the pinch on a global scale."

In November, Honda announced it would build fewer cars in Japan, Europe and the United States to reflect bleak economic prospects in the vehicle manufacturing industry.

Sales of new cars in the UK suffered their biggest monthly drop in 28 years, while carmakers Ford, GM and Chrysler have asked the US Congress for multi-billion dollar loans to guarantee their survival.

The last team to leave Formula One were Honda-backed minnows Super Aguri, which folded for financial reasons in April.

Honda's own F1 team endured a deeply disappointing 2008 season on the track, earning just 14 points, leaving them the lowest of the nine points-scoring teams.

Button found himself ranked 18th in the drivers' list, contributing only three points.

Only four drivers, each without a point to their name, ranked below him. Team-mate Rubens Barrichello earned the remaining 11 points.

Honda initially entered F1 as a constructor in the 1960s, withdrawing at the end of 1968.

The company returned to F1 in the 1980s as an engine supplier and then purchased a stake in the BAR team from British American Tobacco (BAT) in 2004.

Honda bought out BAT in 2005 to form the Honda team for the 2006 season.

While the team finished fourth in the 2006 constructors' championship, they have subsequently struggled to make an impact.

The 2009 Formula One season begins on 29 March, in Australia.

see also
New car sales fall by one-third
04 Dec 08 |  Business
Japanese juggling act for jobs
04 Dec 08 |  Wiltshire
US carmakers publish rescue plans
03 Dec 08 |  Business
Car makers bid to save the industry
02 Dec 08 |  World News America
Honda plans to reduce workforce
01 Dec 08 |  Wiltshire
Japan carmakers slash production
21 Nov 08 |  Asia-Pacific
Europe car sales in steep decline
14 Nov 08 |  Business

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Reuters UPDATE 1-Motor racing-Honda set to exit F1, to brief media - 1 hr ago
Guardian UnlimitedHonda pulls out of formula one - 1 hr ago
Guardian Unlimited Formula one: Honda pulls out of formula one and leaves Button in limbo - 2 hrs ago
Guardian Unlimited Honda pulls out of formula one and leaves Button in limbo - 3 hrs ago
Observer Honda poised to quit formula one and leave Button in limbo - 4 hrs ago
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