Toyota pulls out for Formula One for 2010

2009/11/05

TOKYO: Toyota is pulling out of Formula One racing, saying Wednesday that it needs to cut costs and focus on its core business.

“Based on the current economic environment, we realize we have no choice but to withdraw from Formula One,” Toyota president Akio Toyoda said. “This has been a very painful decision for the company.”

Toyota, the world’s largest automaker, follows Honda as the second major Japanese company to withdraw from the sport in the last 11 months. Honda pulled out in December 2008 amid worsening economic conditions. Brawn GP, which took over the old Honda team, won the 2009 F1 championship.

Toyota officials said the withdrawal was complete, making it unlikely the company will return to F1 when and if conditions improve.

Governing body FIA said it would undertake a “legal review” of the pullout since it comes only weeks after the team committed to the sport through 2012. FIA had pushed for drastic cost-cutting measures to ensure the sport’s future, something that the leading teams believed consolidated Wednesday’s decision.

“The particular financial pressures within the car manufacturing industry — together with a period of uncertainty and unnecessary confrontation in F1 that is now finally over — created conditions which have made it difficult for Toyota to stay in the sport,” the Formula One Teams Association said in a statement. “The departure of an important car manufacturer cannot be underestimated and its reasons need to be addressed.”

Toyota, which posted its worst ever loss in the financial year that ended March, is seeking to cut costs as it expects to post an operating loss for the six months that ended Sept. 30. It is due to report earnings Thursday.

In July, Toyota-owned Fuji International Speedway announced it would not host the Japanese GP from 2010 and beyond.

Like other Japanese exporters, Toyota is hurt by a strong yen. The dollar has recently hovered around 90 yen. Toyoda, the grandson of the company’s founder who became president this year, has vowed to avoid a third straight year of losses.

On Monday, Japanese tire manufacturer Bridgestone Corp. announced it would not renew its exclusive deal to supply tires for F1 when its contract expires in 2010.

F1 is not the only motor sport to be affected by the economic crisis. Citing similar concerns to Toyota and Honda, fellow Japanese automakers Subaru and Suzuki pulled out of the World Rally Championship ahead of the 2009 season.

Ferrari, however, said the fraught relationship between the FIA and the F1 teams was part of the reason for why teams are quitting the sport.

“The reality is that this gradual defection from the F1 fold has more to do with a war waged against the major car manufacturers by those who managed Formula 1 over the past few years, than the result of any economic crisis,” Ferrari said in a statement, comparing the F1 withdrawals to Agatha Christie’s novel “Ten Little Indians.”

“In Christie's work of fiction, the guilty party was only uncovered when all the other characters died, one after the other. Do we want to wait for this to happen or do we want to pen a different ending to the book on Formula 1?”

Toyota made its F1 debut in 2002 but never won a grand prix race. The team’s best results came in 2005 when Jarno Trulli posted second-place finishes in Malaysia and Bahrain.

Toyoda said the team’s poor results were not a factor in the decision to leave the sport.

“Our decision would not have changed even if we had a victory,” Toyoda said. “The fact that we are unable to give our drivers a chance to compete is very sad.”

Despite a promising start to the 2009 season, Toyota finished fifth in the constructors’ standings.

Trulli and Timo Glock raced for Toyota this season. Trulli finished eighth in the drivers’ standings and Glock was 10th.

Kamui Kobayashi filled in for an injured Glock in the last race of the season and finished sixth at the Abu Dhabi GP.

As well operating their own teams, Japanese manufacturers have supplied engines to various constructors over the decades. Toyota’s withdrawal from F1 will mean that for the first time in eight years there will be no Japanese constructor on the grid for the 2010 season.

The withdrawal also leaves just three manufacturers in F1 — Ferrari, Mercedes and Renault.

Ryoichi Saito, an auto analyst at Mizuho Investors Securities Co. Ltd., said Toyota’s move underscored a severe slump in the global auto market.

“The withdrawal from F1 is part of Toyota’s cost cutting efforts amid a global downturn,” Saito said. “The company can no longer stay in costly F1 while making massive losses. Toyota’s decision means that the company wants to invest more in hybrid vehicles rather than F1.”

Toyoda echoed that analysis.

“Eco-friendly cars are our top priority,” Toyoda said. “I have called for Toyota to service our customers one at a time with exciting vehicles that meet our customer’s needs.” -- AP