Toyota Quits F1?

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Joe Saward, the terrific F1 journo and Delphic Oracle of rumors such as these, says that Toyota’s board has made a decision on F1. They are quitting effective immediately. This is being reported in the Japanese paper Mainichi Shimbun.

So Tokyo has brought us two damning stories in as many days with Bridgestone’s shock announcement and now, although not shocking, Toyota’s final curtain call. As Saward points out, the board members were to meet this month to determine budgets for 2010 and the F1 teams fate was certainly in the balance. The news of their exit is not the most shocking of news as Toyota has failed to achieve their goals after a decade in the sport.

Toyota

Reality could be leveraged against the team as they were most likely drawn into the sport by Honda’s presence and it could be argued that Honda’s exit left little for Toyota to prove from a Japanese car manufacturer’s standpoint. This is indeed sad news as Toyota had their best year in 2009 from a pace standpoint and looked to be moving in the right direction. It also is equally sad as the team may have found the long-lost Japanese driver that actually has pace in Kamui Kobayashi.

Like BMW, Toyota’s building blocks were coming together but unlike the German marque, it took seven additional years to get it right. I am saddened by the news as Toyota, to me, has relevancy in F1. Why do you ask? Because Toyota is the worlds largest automaker and they have certainly felt the credit crunch like everyone else. Additionally I offer a brand equity issue they face.

They have a large presence in the US and several plants that employ many Americans. They have a good product yet the juggernaut that has been the Camry has lost it’s pizazz in the US. It isn’t the go-to car like it used to be and their involvement in NASCAR hasn’t done much to pump up their image as there is nothing “stock” about the stock car series. The only thing Toyota related is the body shape. I think Toyota has become the Oldsmobile of the US market…cars for older people.

I still think Toyota has a lot to prove but alas, it won’t be in F1 and I don’t think NASCAR is the best fit for them. The NASCAR truck series, however, is relevant to me as their trucks have done very well in the States. Please understand, I think Toyota makes a terrific product and this news saddens me to the core. Particularly for all the men and woman working in Cologne but there is little one can do to convince a board that staying in F1 is a good idea when your main competitor has bowed out, a top German car maker has bowed out to be more “green” and the image you want the entire world to see is an electric car named Prius for the guilt-ridden smugness it both sates and offers. In this light; loud, gas guzzling F1 cars may not attract the eco-conscience of the discriminating and idealistic world citizen.

The next question? Will there be homes for the displaced Cologne workers or will Toyota find a buyer for the team? One considers the Hinwill-based teams need for a slot on the 2010 grid and perhaps the two can work together to form one terrific team from two quitters. Perhaps this news will allow Dr. Mario Thiessen to sleep tonight.

UPDATE: According to iStock Analyst-

Toyota Motor Corp. will withdraw from Formula One at the end of the current season, joining a number of other Japanese automakers leaving major motor racing events due to the tough business environment, sources close to the matter said Wednesday.

The move to pull out of F1 comes as Japan’s top automaker decided that it would be difficult to continue bearing the costs of joining the F1 race, as it anticipates remaining in the red for the second consecutive year in fiscal 2009 through next March, the sources said.

With Japan’s second-largest automaker, Honda Motor Co. (NYSE:HMC) , having also exited F1 at the end of the 2008 season after carmakers were hard-hit by the global slump in auto demand, Toyota’s decision erases the presence of Japanese teams in the F1 race circuit.

Toyota aims to cut its F1-related spending as its annual cost amounts to several tens of billions of yen, the sources said, adding that Toyota is expected to look for a buyer for its F1 team.

The Aichi Prefecture-based automaker is expected to make a formal announcement later Wednesday.

Toyota joined F1 in 2002 to enhance its technological capacity and boost its image in Europe. Toyota ranked fifth out of 10 teams in the F1 constructor championship for the 2009 season.

In July, Toyota’s subsidiary Fuji International Speedway Co. said it will stop hosting Formula One Japanese Grand Prix races at its circuit in Shizuoka Prefecture from 2010, citing sour business conditions.

For fiscal 2008, Toyota reported a consolidated operating loss of 461.01 billion yen, the first operating loss since fiscal 1937. For the current business year, it anticipates an operating loss of 750 billion yen — its worst-ever on record.

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