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Mercedes' Brawn buy-out makes it major F1 player
Source: Agencies |
November 17, 2009, Tuesday
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WHILE other car manufacturers fall by the wayside, Mercedes is taking a bold move to establish itself as a major player in Formula One.
By buying out 2009 champion Brawn GP yesterday, the German automaker bucked the trend of manufacturers pulling out of F1 during the economic downturn.
Brawn GP will compete under the name Mercedes GP for the next six years. Mercedes and Aabar Investments PJSC bought out 75 percent of the British team's shares while selling its own stake in McLaren.
The move comes one week after Toyota followed Honda and BMW in abandoning motor racing's premier sport, citing high costs. But Mercedes, which has acted as an engine supplier to McLaren since 1995, has decided that F1 is the best global platform for publicizing its product.
"First of all the brand of motor racing goes back to motor racing," said Dieter Zetsch, CEO of Daimler AG, the parent company of Mercedes-Benz. "You do motor racing in order to promote your brand in the world market. There's no other platform in sport - or perhaps even beyond - with such a strong presence around the globe and in emerging markets.
"With the history of Mercedes we have the best opportunity to use that program for the improvement of our brand."
Norbert Haug, vice president of Mercedes Benz motorsport, said Mercedes hopes to achieve its goals by actually spending less money in F1.
"It is our target to develop a model for our Formula 1 activities which will initially be run with significantly reduced budgets by Mercedes-Benz and which, in the foreseeable future, will be self-financing," Haug said.
Mercedes, Fiat-owned Ferrari and Renault remain the lone manufacturers set for 2010's starting grid, although even Renault's place in under question as the French team considers whether to stay in F1.
But Mercedes seemed ready to jump at becoming a full-fledged team for the first time since 1955 when the chance came to link up with Brawn GP team principal Ross Brawn.
The former Ferrari team chief has received much of the credit for transforming the Brackley, England-based outfit from big-spending underachieving Honda to champion after only two years.
"Brawn GP has been through an incredible journey over the last 12 months," Brawn said. "From fighting for our survival to forging a strong relationship with Mercedes-Benz, winning both the constructors and drivers world championships.
"The senior management group will remain in place to lead our team and ... we will be working together to do our best to reward their faith in our team."
yesterday's announcement also proved that perhaps better than any sport, F1 knows how to weather a storm.
Lying and cheating scandals were features of this season's championship, but all of that has done nothing to slow F1's growth as the sport welcomes more teams to the race grid than it has for years while more races have been added to the calendar.
With governing body FIA insistent on keeping costs down after Toyota's exit, whether all of the new teams are on the grid come March's season-opening Bahrain Grand Prix remains to be seen.
McLaren may be viewed as the loser of this deal but co-owner Ron Dennis was putting on a brave face by calling it a "win-win" for all parties.
"I've often stated that it's my belief that, in order to survive and thrive in 21st-century Formula One, a team must become much more than merely a team," Dennis said. "In order to develop and sustain the revenue streams required to compete and win Grand Prixs and world championships, companies that run Formula One teams must broaden the scope of their commercial activities."
By buying out 2009 champion Brawn GP yesterday, the German automaker bucked the trend of manufacturers pulling out of F1 during the economic downturn.
Brawn GP will compete under the name Mercedes GP for the next six years. Mercedes and Aabar Investments PJSC bought out 75 percent of the British team's shares while selling its own stake in McLaren.
The move comes one week after Toyota followed Honda and BMW in abandoning motor racing's premier sport, citing high costs. But Mercedes, which has acted as an engine supplier to McLaren since 1995, has decided that F1 is the best global platform for publicizing its product.
"First of all the brand of motor racing goes back to motor racing," said Dieter Zetsch, CEO of Daimler AG, the parent company of Mercedes-Benz. "You do motor racing in order to promote your brand in the world market. There's no other platform in sport - or perhaps even beyond - with such a strong presence around the globe and in emerging markets.
"With the history of Mercedes we have the best opportunity to use that program for the improvement of our brand."
Norbert Haug, vice president of Mercedes Benz motorsport, said Mercedes hopes to achieve its goals by actually spending less money in F1.
"It is our target to develop a model for our Formula 1 activities which will initially be run with significantly reduced budgets by Mercedes-Benz and which, in the foreseeable future, will be self-financing," Haug said.
Mercedes, Fiat-owned Ferrari and Renault remain the lone manufacturers set for 2010's starting grid, although even Renault's place in under question as the French team considers whether to stay in F1.
But Mercedes seemed ready to jump at becoming a full-fledged team for the first time since 1955 when the chance came to link up with Brawn GP team principal Ross Brawn.
The former Ferrari team chief has received much of the credit for transforming the Brackley, England-based outfit from big-spending underachieving Honda to champion after only two years.
"Brawn GP has been through an incredible journey over the last 12 months," Brawn said. "From fighting for our survival to forging a strong relationship with Mercedes-Benz, winning both the constructors and drivers world championships.
"The senior management group will remain in place to lead our team and ... we will be working together to do our best to reward their faith in our team."
yesterday's announcement also proved that perhaps better than any sport, F1 knows how to weather a storm.
Lying and cheating scandals were features of this season's championship, but all of that has done nothing to slow F1's growth as the sport welcomes more teams to the race grid than it has for years while more races have been added to the calendar.
With governing body FIA insistent on keeping costs down after Toyota's exit, whether all of the new teams are on the grid come March's season-opening Bahrain Grand Prix remains to be seen.
McLaren may be viewed as the loser of this deal but co-owner Ron Dennis was putting on a brave face by calling it a "win-win" for all parties.
"I've often stated that it's my belief that, in order to survive and thrive in 21st-century Formula One, a team must become much more than merely a team," Dennis said. "In order to develop and sustain the revenue streams required to compete and win Grand Prixs and world championships, companies that run Formula One teams must broaden the scope of their commercial activities."
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