BMW withdraws from F1

• Source: Xinhua
• [07:55 July 30 2009]
• Comments

German luxury car maker Bayerische Motoren Werke AG (BMW) will quit Formula One in November at the end of 2009 season, Chief Executive Norbert Reithofer confirmed on Wednesday in its Munich headquarters.

BMW became the second carmaker following Honda in less than a year to withdraw from the auto-racing series amid slumping sales.

"The board decided yesterday that we would change our involvement in motor sport. The BMW group will end its involvement with Formula One at the end of 2009 season," said Reithofer. The importance of Formula One is reducing as BMW "places stronger focus on sustainability initiatives," he added.

At present, BMW spends an estimated 200 million euros (some 283million U.S. dollars) on Formula One every year to market its brand. However, its team only got one win in 63 races, when Robert Kubica took victory in Canada last season.

Analysts thought the high cost and the poor performance of BMW team in F1 were the reasons why BMW quit F1, but Reithofer denied that, saying the decision was made based on company's new strategy rather than the high costs and disappointing results.

One of BMW's major competitor Daimler AG has also reduced its spending on Formula One, but has no plans to leave the competition. Besides Daimler AG, another 11 car makers including Ferrari SpA, Renault SA and Toyota Motor Corp. signed up to new terms through 2012, according to the local media reports.

The BMW team formed in 2005 now has about 700 staff in Munich and Hinwil, Switzerland. However, it is still not clear now how it will be operated after the season and how many people will lose their jobs.