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Fresh round of cost cutting hits F1
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Fresh round of cost cutting hits F1
Posted By: James Allen  |  07 Jul 2009   |  8:13 am GMT  |  8 comments

The belt tightening in F1 continues. Today Toyota confirmed that it is withdrawing from a deal to host the Japanese Grand Prix at Fuji Speedway, as it deals with mounting losses. Earlier this year the company said that it expected to lose over $1 billion in 2009.

The race will now be held at Suzuka, which, ironically is owned by Honda, who withdrew from F1 last year.

The actual cost of hosting the race is relatively modest compared to the running costs of the F1 team. The event sanctioning fee will be in the $20 million per season range, around 10% of what Toyota is likely to spend this year with the cost cutting measures put in place last December by FOTA and the FIA. But Toyota is able to recoup much of that from ticket sales, so the withdrawal is saving quite a modest amount and is clearly symbolic more than anything else.

Toyota, as part of the Formula One Teams Association, is in the process of finalising the rules and cost saving measures for 2010 and 2011, as agreed two weeks ago in the breakthrough deal with the FIA.

Although there have been rumours all season that Toyota may be pulling out of F1 soon, the team has always denied this and implied that the rumours were being spread by people who would like Toyota to leave F1.

Today’s announcement does not make it more likely that the team will pull out, after all they recently committed to stay in F1 until 2012 as part of FOTA’s side of the deal with FIA and FOM, but it does show that the red pen is out at Toyota and it sends a strong message to the FOTA negotiators that the board is calling for deep cuts in F1 spending when the 2010/2011 rules are finalised. FOTA has committed itself to getting budgets down to early 1990s levels, that is to say around £40 million without engine costs.

On a personal level, although I love Suzuka, I shall really miss Fuji. Being close to Tokyo helped a lot, as Suzuka is very isolated. The Fuji event was much better than I thought it was going to be and the circuit has a tremendous atmosphere. It also lent itself to exciting racing.

Meanwhile it seems that in the UK and Germany the scrappage scheme, whereby you can recoup £2500 off the cost of a new car if you scrap your old one has slowed the fall in new car sales, giving some relief to troubled car makers.

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8 Comments
  1. Meanwhile it seems that in the UK and Germany the scrappage scheme, whereby you can recoup £2500 off the cost of a new car if you scrap your old one has slowed the fall in new car sales, giving some relief to troubled car makers.

    As you say, slowed the decline – so it’s still going down, just not as quickly!

    It does seem to be having some remedial effect, however, and the they’ll be looking forward to America’s equivalent scheme which is about to launch (called “cash for clunkers” which is so much better than “scrappage”).

  2. Scott Brown says:

    It’s a shame that there’s not room for Fuji and Suzuka in my opinion.

    I fell in love with Fuji while playing Toca Race Driver having never seen the track on tv. I loved the mixture of sweeping and flicky corners and the long straight into the first corner somehow reminds me of Donington’s straight and first corner, though massively expanded!

    Although I remember being slightly annoyed at getting up in the middle of the night to watch some very expensive cars follow another quite expensive car in the rain for 45 minutes or so, it will be a loss in my eyes.

    Hopefully it will come back one day as it’s not lived on for long enough.

  3. Tom says:

    What a shame – I like Fuji. And I liked the idea of alternating circuits. With looking like going the same way, has the experiment of alternating races found to be not practical?

  4. Peter G says:

    So glad to see the race return to SUZUKA. Used to live in Japan, and would have gone to SUZUKA about 30 times between 1993 and 1997. Amazing track! Just to walk through the amusement area, through the grandstand, and then see the track, always was an amazing experience.

    I was lucky, as I had a photographer’s pass there, and covered F1 race in 1991, 1993 , 1994 and 1995.
    Also covered Japan Superbikes, 8 Hour Bike Race, 6 Hour Sports Car races, and Japan GT Championship in 1996..McLaren F1GTRs were there.

    SUZUKA has excitement, whereas, FUJI was a totally boring circuit. As awfully long straight, followed by a stupid corner at the end of it. Ralf Schumacher used to go off there normally on his second lap!

    Getting to FUJI was difficult. FUJI is closer to Tokyo, but, the difficulty in changing trains, buses,and taxis was off putting. ( James..you reckon SUZUKA is isolated ? No way ! )

    The Japanese fans always liked SUZUKA, but, there was never the same excitement about FUJI.

    I am certainly looking forward to see the Japanese F1 GP return to its rightfull home.

  5. TinyJim says:

    “Meanwhile it seems that in the UK and Germany the scrappage scheme, whereby you can recoup £2500 off the cost of a new car if you scrap your old one has slowed the fall in new car sales, giving some relief to troubled car makers.”

    eerrr… but don’t you feel for the second hand car dealers, and the mechanics who serviced them who are now out of a job?

    And where does the money come from to pay for the scheme? Out of your pocket. So now you have to feel for the retailer who doesn’t get that and loses their job. Well at least the manufacturers and CEOS who were so short sighted and built the wrong cars still have their jobs!

  6. Frenchie says:

    As James pointed out, it is quite close to Tokyo and the bullet train takes you there in less than 1 hour. Once at the train station, there was a shuttle to take you to the speedway. The vibe was fantastic, the Japanese who ususally don’t open up were very approachable.

    Both races where fantastic (despite getting seriously wet on the Sunday in 07) and Kangaroo TV allows you to view the race/qualifying in different places quite easily between corner 5 and the chicane with a general admin ticket.

    Fuji will be sorely missed to anyone who attended the 2007 or 2008.

  7. Stevie P says:

    “The actual cost of hosting the race is relatively modest compared to the running costs of the F1 team”… and “the withdrawl is saving quite a modest amount and is clearly symbolic more than anything else”.

    James – do you feel then that these are steps taken by Toyota to postpone their (inevitable *) withdrawl from F1?

    * – c’mon folks, it’s only gonna get worse, before it gets better! And from talking to a financial advisor, I know, he claims the economy in Japan is “shafted” (his words, not mine!)

    Best thing about Fuji? Hunt (the Shunt) taking the crown in the teeming rain in 1976… I was 5. I didn’t know Lauda had almost died in a fireball in Germany. I didn’t know anything about the politics or the bad safety record or this or that… I just knew I loved watching racing cars :-) Real heroes, risking their lives, purely for the buzz of going flat-out.

  8. Hammad says:

    Good riddance. It was a terrible circuit, just a shadow of what it used to be,

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