Red Bull to become an engine supplier?

Could we see Mark Webber driving a Red Bull powered Red Bull next year?

There’s an interesting theory going around at the moment that Renault could be planning to sell off their engine operation to Red Bull. This could make a lot of sense as it would enable Red Bull Racing to design the engine, chassis and aerodynamics in a parallel fashion – very much in the way that Ferrari operate. They could also supply the engine to their ‘junior’ team Toro Rosso. In the past Renault have sold off (or at least licensed) their engine operation and then picked it back up at a later stage. When they officially withdrew from their very successful engine supply programme in 1997 (having powered both Williams and Benetton to World Championships) the engine operation was taken over by Mechachrome, a specialist French engineering company, working mainly in the aerospace sector. When Renault came back into F1 in 2001 the engines were rebadged as Renault – the designs were Renault but the manufacturing was still undertaken by Mecachrome. If Renault did sell off the engine operation to Red Bull what would happen to the operation at Enstone? This operation has recently benefitted from a new CFD system powered by state of the art super-computers. If Manor’s Nick Wirth is able to prove that you can design a competitive F1 car with CFD alone then the Renault facility could be a valuable asset for someone to acquire, including Red Bull.

Three reasons why Honda, BMW and Toyota left F1

The lemming: A role model for strategy makers in many organisations

There’ve been various theories thrown around as to why some of the manufacturers have left F1 recently, here are three of mine:

1. Changes in the global car market: With the car market dropping by around 30-40% in unit sales the car makers are having to cut production and clear inventories in order to stay in business. This means closing or moth-balling plants. Despite the millions of dollars required to be involved in F1, the costs are not hugely significant for the car makers budgets, but the symbolism is. F1 is a luxury product and if times are hard and people are losing their jobs a more frugal profile is needed and that is not one of F1’s brand attributes.

2. Changes in the regulations of F1: The freeze on engine development in F1 essentially reduced the opportunity for manufacturers to innovate and develop their engine technologies, it became less exciting for their engineers and it also meant that engines became a less critical factor in performance (unless they failed of course) and so there was less coverage of engines, in the same way that Bridgestone experienced reduced coverage on tyres when they became sole supplier.

3. The lemming effect: This should not be underestimated. Much research on business strategy refers to the kind of convergence that happens in many industries. With increased benchmarking and use of the same consultants firms strategies are getting more and more similar, so if one firm does something different (Honda pulls out) then everyone starts to wonder if they know something they don’t, and suddenly they’re all jumping over the cliff. It’s interesting that one of the most successful manufacturers in F1 in recent times is Mercedes and they seem to be going in the opposite direction, investing more when their competitors are pulling out. All of this is part of a cycle that’s been going on in F1 since 1950, manufacturers come and they go and then they come back again.

The irony is that the cost inflation in F1 over the last ten years has been largely driven by the entry of large manufacturers such as Toyota and Honda. Now they are leaving it is likely that costs will reduce to a more sustainable level, this can only be good news for F1, and perhaps over the next few years we’ll see some different manufacturers entering the race and the lemming effect will start all over again.

The F1 grid for 2010: the story so far

So who will be in the Paddock in 2010?

The following table summarizes where we are now in terms of cars and engines for 2010 compared to my post on the subject in June this year.

June (FIA List)	November Prediction
Ferrari/Ferrari McLaren Mercedes/Mercedes BMW Sauber/BMW Renault/Renault Toyota/Toyota Toro Rosso/TBA Red Bull Racing/Renault Williams/Toyota Force India/Mercedes Brawn/TBA Campos/Cosworth Manor/Cosworth Team US F1/Cosworth	Ferrari/Ferrari McLaren Mercedes/Mercedes Sauber/Ferrari Renault/Renault ToroRosso/Ferrari Red Bull Racing/Renault Williams/Cosworth Force India/Mercedes Brawn/Mercedes Campos/Cosworth Manor/Cosworth Team US F1/Cosworth Lotus/Cosworth

This current prediction assumes that Toyota will not have a Brawn type rescue package – the reasons for this are primarily that the F1 operation is more integrated into Toyota’s motorsport and corporate operations in Cologne (it is located in ‘Toyota-Allee’) than was the case with Brawn and Honda, and therefore while Toyota may decide to sell various assets (including the 2010 design?) they would be unlikely to sell the operation off as a going concern. The indications from the team also suggest that there will be a reorientation into other motorsport activity and so some of the assets and workforce will be needed going forward.

I am also optimistic that Sauber will find a place on the grid – although this cannot be taken for granted at this point, it seems likely that Toyota will fully withdraw and Sauber will take their place to make thirteen teams. I am also hopeful that Renault will compete in 2010, this is in part as they have a budget and have made commitments to drivers (which Toyota had not). I suspect that they will be looking to sell all or part of the chassis operation during 2010.

So this just leaves the newcomers. The one which seems to be in most doubt (on the basis of rumours and press speculation) is USF1. The idea of designing and building a car in North Carolina is a brave one, and is not helped by the lack of a Grand Prix in North America and the apparent lack of a high profile US driver. The absence of news regarding driver contracts is also of concern, although, with the exception of Campos, who recently announced that Bruno Senna would drive for them in 2010, all of the newcomers have yet to confirm their driver line-up.

Renault to make announcement ‘before the end of the year’

Will Renault move back to being an engine supplier rather than a constructor?

Renault CEO Carlos Ghosn was quoted by Reuters as saying that Renault will make an announcement regarding their future in F1 ‘before the end of the year’. The fact that he has made such a comment suggests that it will not be ‘carry on as normal’, as Renault have already said they plan to do this, so why make another statement?

It can only mean two things, either they will withdraw as Toyota have done, which would be in direct breach of their signing of the 2009 Concorde Agreement, which committed them until the end of 2012. Toyota clearly didn’t feel they had to adhere to the Concorde Agreement and neither will Renault, if they make a decision to pull out, they will pull out. If Renault do leave F1 it will be far more devastating than the loss of Toyota, Renault have a strong history in F1 (as did Honda) and have also committed to supply Red Bull Racing with engines for 2010.

My theory, as suggested in my post of 3 November, is that Renault will at some point follow Mercedes down the engine supply route. This would mean that they keep their engine design and manufacture operation at Viry-Châtillon in the southern suburbs of Paris, but not their UK operation in Enstone. They do not need to make an instant decision, but it is clear that they have little additional sponsorship for 2010 and so the team will be probably a bigger drain on Renault HQ than it has been in the past. It may well be that they do a Brawn/Honda with Bob Bell and his team of dedicated staff taking over the chassis operation and Renault continuing to supply them with engines.

Toyota to withdraw from F1, announcement expected today

 

So it looks like Toyota never will achieve that elusive Grand Prix win

An announcement is expected later today that Toyota will be withdrawing from F1, as I’ve posted before on this blog, the signs were never good, and even the fact that GM have pulled out of the sale of their European operation due to ‘improving business conditions’ was not enough to save Toyota. Clearly like Honda, BMW and Bridgestone they’ve decided that their strategic priorities are elsewhere.

It certainly resolves the problem of finding a place on the grid for the Sauber team, at least one less headache for Jean Todt to deal with as the new FIA President.

A New Approach for Automotive Manufacturers in F1

Will Renault follow the Mercedes approach to F1?

If we put Ferrari to one side as a special case, and omit Toyota, as it remains unclear as to whether or not they will continue into 2010, we are seeing a new kind of involvement from those automotive manufacturers who plan to remain in F1.

The emerging model appears to be far closer to that of the eighties and nineties where the car manufacturers focus on engine supply, but with the added commitment of full or part ownership of teams. The engine scenario for 2010 looks to be dominated by Mercedes (McLaren, Brawn, Force India) and Cosworth (Williams, Campos, USF1, Manor, Lotus) with Ferrari and Renault also supplying engines to Toro Rosso (and also Sauber if they secure a place) and Red Bull Racing respectively. It looks likely that Mercedes will be aligning their brand more strongly with Brawn, but also that they may be seeking to identify a separate identifiable brand in the way that Cosworth will no doubt do. The other interesting question is Renault. Will the team be looking to find a buyer and shift to the kind of model which Mercedes are developing? – I suspect so.

Who will take over from Bridgestone in 2011?

So who will supply F1 tyres from 2011?

The news today that Bridgestone will withdraw from F1 at the end of 2010 cannot be a total surprise, but it is a situation that raises some interesting challenges for the FIA and Formula One Group (FOG). When Michelin withdrew from F1 at the end of 2006 and Bridgestone became the single tyre supplier, tyres became a basic commodity rather than a source of competitive advantage. No longer would commentators talk about Bridgestone vs Michelin and the superior performance of one over the other in the wet. At that point it became a costly PR exercise rather than a core marketing strategy for Bridgestone. OK they would always be on the podium, but no-one wanted to talk about tyre companies winning (or losing) races.

So who could replace them? The big five global players in tyre manufacture are Bridgestone, Michelin (who between them control around 40% of the market), Continental, Pirelli and Goodyear, it could be one of these, but there are also a number of players in emerging markets, such as MRF who are market leader in India and Kumho and Hankook from South Korea. Hankook are an interesting example who have recently been involved in endurance racing and sponsored a team for the Le Mans 24 hours race. With new Grand Prix planned in India and South Korea it will be interesting to see who steps in to replace Bridgestone.

A Few Contracts Left to Sign

Nico Rosberg has announced he will be leaving Williams - to go where?

As the F1 teams gear up for their final Grand Prix in Abu Dhabi there are quite a few loose ends to tie up before we get a clear picture of the 2010 season. First the fate of the team formerly (after the weekend) known as BMW Sauber is looking rather bleak, with no place on the 2010 grid and no sign of anyone coming forward to admit they now own the team. Second there is still much uncertainty over the fate of the British Grand Prix which is currently scheduled to take place on 11 July 2010, the same day as the final of the World Cup in Johannesburg (and also a total solar eclipse in the Southern Hemisphere). It now looks like Donington’s attempts to host the British Grand Prix have sadly failed and so we hope that Silverstone will be the venue for the 2010 British Grand Prix. However this will all depend on the nature of the contract which the Commercial Rights Holder (represented by Bernie Ecclestone) has put to the promoter and owner – the British Racing Drivers Club – and their appetite for taking on the financial risks that will inevitably come with it. In addition to the above there are a wide range of driver contracts yet to sign, such as both drivers for Toyota – who will not know until 15 November whether or not they have a budget to go racing next year – and of course the two seats at Brawn GP. Nico Rosberg confirmed today that he is leaving Williams, so presumably he has a place to go to (most commentators believe this to be Brawn in exchange for Rubens Barrichello, although some say he could go to McLaren). The biggest question is whether or not Jenson Button and his management team will do what Damon Hill did at Williams and fail to keep his place in the quest for richer pickings, let’s hope this is one contract that is signed in the next few days.

Jean Todt is the new FIA President

Jean Todt now faces a challenge as difficult as the one he faced when he joined Ferrari in 1993

Jean Todt is the new man at the helm of the FIA, almost two years after stepping down from his position as CEO of Ferrari. Todt has a reputation for hard work and real commitment to whatever role he takes on, he was certainly the major architect of the transformation that took place at Ferrari in the mid and late nineties, let’s hope he can bring a similar transformation to Formula 1 and move it forward after what has been a very difficult year for the reputation of the sport.

F1 Steps in a greener direction

WilliamsF1 Flywheel based KERS system may become standard in 2013

At the meeting of the World Motorsport Council on 21 October 2009 the proposals put forward by the Environmentally Sustainable Motor Sport Comission (EMSC) were supported. These proposals were significant in that they made an unequivocal statement that ‘Motor sport must move from a power per unit.. as basis for engine performance regulation , to one of power per unit energy.’ In short this means that rather than defining engines in terms of volume or rpm, they will, in future, be defined in terms of brake horse power (bhp) per litre of fuel. They also state that it will be necessary to limit the amount of fuel/energy consumed: so we may go back to the days in the 1980s and early 1990s when F1 cars had a fuel capacity limited to 195 litres and we had cars running out of fuel on the last lap – some of us remember when victorious Nigel Mansell gave Ayrton Senna a lift on (yes on, rather than in) his Williams back to the pits during his celebration lap after Senna’s car had run out of fuel at the end of the 1991 British Grand Prix.

The other interesting note in the EMSC proposals relates to KERS systems: ‘Energy consumption and CO₂ emissions should be regulated on an onboard energy reservoir to wheel basis’. This implies that although KERS will not be used in 2010 it is planned to reintroduce it, potentially on a single spec basis to save cost. Later in the document they make the statement that ‘Technology such as fly wheels reducing dependence on batteries and concentrating on ICE load shift [ICE = Internal Combustion Engine I think!] proves to be the most promising way forward.’ Good news for Williams who have been developing their own flywheel system as a potential spin-off from the F1 operation.

However, there is no mention of when or how any of these proposals will be implemented. Clearly they will be on the table for the next Concorde agreement to run from 2013, it will be interesting to see whether or not they really do come to fruition.