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Credit crisis drives tyre company Bridgestone out of F1

Text by News Wires

Latest update : 2009-11-02

The worst economic crisis in decades and waning enthusiasm for auto-sports has resulted in tyre maker Bridgestone announcing that it will stop supplying tyres to Formula One cars at the end of next season.

AFP - Tyre maker Bridgestone's exit from Formula One is part of an exodus by Japanese automotive industry giants from the multi-million-dollar sport amid the worst industry slump in decades.

Toyota has said it would stop hosting Japan's annual Grand Prix, Honda Motor has sold its F1 racing team, and several other industry players from Suzuki to Subaru have also turned their back on motor sports.

Industry watchers say the pull-out reflects the need to slash costs -- but also waning enthusiasm for high-octane auto sports as consumer demand is shifting toward more fuel-efficient and greener cars.

"Once a car was cool for its high speed, competitiveness, design and style," said Tatsuya Mizuno, an auto analyst at Mizuno Credit Advisory. "Winning in Formula One equated with what people thought was cool.

"But now people want more environmentally friendly, fuel-efficient and safe cars. Auto and autopart makers are questioning what they can gain now by spending hundreds of millions of yen in taking part in Formula One."

Bridgestone Corp said Monday it would stop supplying tyres to Formula One late next year after its main rivals Michelin of France and US maker Goodyear withdrew from the sport years earlier.

"We need to concentrate our management resources on strategic areas and technological innovation," said spokesman Makoto Shiomi, adding that a priority would be developing more environmentally friendly products.

Toyota Motor, the world's largest auto maker, in July pulled out of hosting the Japanese Grand Prix at its Fuji Speedway circuit from next year.

The economic downturn had made it "extremely difficult" to continue to stage the event, Hiroaki Kato, president of operator Fuji International Speedway Co., said at the time, bowing before the cameras.

Japanese carmakers since the start of the worldwide economic slump have been cutting production and thousands of jobs as consumer demand has plummeted and a strong yen has eroded overseas earnings.

Honda Motor has since said it would host the 2010 race at its Suzuka Circuit "to avoid discontinuity in the history of the F1 Japanese Grand Prix" -- but the company's enthusiasm for the sport has also dimmed.

Last December it quit the premier autosport tour as a racing team in order to cut costs. The company was reported to have spent 20 billion yen (200 million dollars) on running the F1 team.

Honda sold the team to former principal Ross Brawn in March, allowing it to compete in this year's world championship. Brawn driver Jenson Button of Britain has since been crowned the new F1 champion, with the team at the top of the constructors standings.

Honda and Brawn did not disclose the cost of the deal, but a Japanese newspaper said the price was just one British pound.

Honda has also said it would scale down its motorcycle racing activities, notably skipping this year's Suzuka Eight Hours endurance championship.

Other Japanese companies have also backed away from motor sports.

Suzuki and Japan's Fuji Heavy Industries, maker of Subaru cars, have withdrawn from the world rally championship.

Ikuo Mori, the president of Fuji Heavy Industries, said last December: "Our business environment has rapidly deteriorated. In order to protect the Subaru brand we were forced to make this decision."

The Subaru team won three manufacturer's championship titles and three driver's championship titles in its 19-year WRC participation.

Mori -- who fought back tears as he announced the decision, thanking fans -- did not disclose the amount required to run the team but said the cost was in the order of "several billion yen."

In February Mitsubishi announced it would no longer compete in the Dakar Rally despite a dozen victories, blaming "the sudden deterioration of the global economy."

Mitsubishi Motors president Osamu Masuko said at the time: "Since 2004, we continued to participate in the rally even in difficult times by cutting costs. We gained much technologically during this time. It pains me to say we will no longer be able to participate."

Daihatsu Motor has also withdrawn from a domestic auto rally.

Date created : 2009-11-02


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