Following Tuesday’s rumors, Toyota today officially announced its withdrawal from Formula One racing. “We are pulling out of Formula One completely,” CEO Akio Toyoda told the media at a press conference. “I offer my deepest apologies to Toyota’s many fans for not being able to achieve the results we had targeted.”
The move will save the company hundreds of millions of dollars per year and, given the company’s precarious financial situation, that might not be a bad thing. Toyota has forecasted a loss of $8.3 billion for the year.
Given the global economic recession, persistently weak new car sales, a very unfavorable dollar-yen exchange rate, and declining overall revenue, it’s no surprise Toyota’s management is pulling the plug.
What’s more, the company’s relatively weak performance in F1 racing doesn’t help. Toyota hasn’t achieved a single F1 victory in 139 races over seven years.
Toyota is rumored to spend as much a $400 million per year on F1. While there are branding and R&D benefits to participating in Formula One, it’s unlikely the extreme cost can be directly justified.
In a statement to the press, Toyota said it views its participation in F1 as “an irreplaceable experience that provided an opportunity to develop both human resources and its R&D operations.”
“TMC expresses its deepest appreciation to its F1 fans and others for their warm support,” the statement reads. “TMC also wants to express its heartfelt gratitude to all Panasonic Toyota Racing drivers to date and to all Toyota Motorsport GmbH employees who have helped make the team’s achievements possible.”
