Could Formula One prove more expensive than its worth? That is a question that car manufacturers must ask themselves after new research revealed the true cost of being involved in the sport.
The five car manufacturers that owned Formula One teams last year needed to sell more than 25,000 cars just to break even on their investment according to industry monitor Formula Money. It found that Ferrari, Mercedes, Renault, BMW and Toyota spent a total of £539million on F1 but in the year to date they sold 1.7million fewer vehicles than in the prior year leading to BMW, Renault and Toyota cutting their involvement in the sport.
Research calculated the number of cars the manufacturers would need to sell to cover the cost of competing. Ferrari leads the field when it comes to covering costs – it makes €275,000 per car sold and so only needs to sell 153 vehicles to break even on its €42million investment. In the nine months leading to September 2009, it had sold 4,680 cars – even though this was a fall in sales of 6.9 per cent it was the smallest among any of the car manufacturers that owned F1 teams.
By sharp contrast, it’s easy to see why Toyota has moved away from the sport. Its latest quarterly figures for the six months to the end of September 2009 show it sold 1.1million fewer cars compared to the same period in the previous year – the biggest drop of any of the car manufacturers involved. It was previously pouring around €178million a year into F1 meaning it would need to sell more than 9,700 cars, more than any of its rivals, to cover its costs.
Mercedes is one of the few manufacturers to buck the trend – it sold its stake in McLaren and then bought into the world championship winning Brawn team. Even though its latest results show a 20 per cent fall in unit sales it receives €37,797 in revenue per car sold – that’s more than any other manufacturer with the exception of Ferrari.
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