Toyota’s F1 team principal Tadashi Yamashima has issued a stark warning today that the involvement of the world’s biggest car maker in F1 could come to an end soon.
“We will participate for now,” he said. “We have to consider a variety of things in relation to our core business. Our participation is unclear, depending on our financial results.”
It is quite a downbeat message on the eve of the company’s home race in Suzuka, especially coming off the back of a brilliant and high-profile second place in Singapore. So how is the company doing financially? Not very well is the answer.
Toyota are poised to cut production by almost 10% in order to try to minimise losses due to falling demand. It is pulling out of a joint venture business with GM in America. It is the first time that Toyota has planned to cut production to such an extent and it shows how badly it is faring in the current economic climate. Sales of Toyota in America have fallen by 34% this year. The luxury Lexus brand, which carries big profit margins, has been particularly badly hit.
In August Toyota forecast a net loss for 2009 of £3 billion, which is less than it feared but still unprecedented for the company.
Another threat to all the car companies is the end of Government sponsored car scrappage schemes in many key markets including the US, UK and Germany. These have prevented a total wash-out in the automotive sector during 2009, but are set to end in many countries in the coming months.
Although the company has signed up to the Concorde Agreement, it faces no financial penalty for walking away from F1. It has some obligations, but nothing significant enough to prevent a walk-out if the business case for it was clear.
The team has yet to set a budget for the 2010 season and will not do so until mid November, by which time many drivers will already have signed up for other teams. With Williams set to switch its engine supply deal to Renault (partly as a hedge against a Toyota pullout), the company has no customers for engines in the paddock.
It has already told both of its drivers that they are free to look for drives elsewhere.