Toyota to withdraw from Formula One racing after 2009 season

TOKYO, Nov. 4 Kyodo - Toyota Motor Corp. said Wednesday it will withdraw from Formula One at the end of the current season to cut costs, erasing the presence of any Japanese team on the F1 circuit, and shift its focus on its core business of car production due to the tough business environment.

The move to pull out of F1 after this year comes as Japan's top automaker
concluded that it would be difficult to continue bearing the costs of
participating in the racing event, as it anticipates remaining in the red for
the second consecutive year in fiscal 2009 through next March.
''In light of the current business environment and mid- and long-term
perspective, we had no choice but to make this tough decision,'' Toyota
President Akio Toyoda said at a news conference in Tokyo.
The automaker's departure from the world's top auto race comes after Honda
Motor Co., the second-largest Japanese automaker, exited F1 at the end of the
2008 season.
Toyoda, who is himself an avid motor sports fan and has taken part in car
racing events both at home and abroad, stressed that the company did its utmost
in cost-cutting measures to enable its continued participation in F1, but
ultimately had to back out due to the economic downturn.
For fiscal 2008, Toyota reported a consolidated operating loss of 461.01
billion yen, the first operating loss since fiscal 1937. It aims to cut 900
billion yen in costs as it anticipates an operating loss of 750 billion yen --
its worst-ever on record -- for the current business year.
With that in mind, the president said the automaker must redirect its resources
to making cars.
In withdrawing from F1, Toyota will focus its resources on developing
fuel-efficient cars and low-cost cars targeting emerging economies such as
China and India, which is a potential source of growth for the company.
''Eco-cars are extremely important (in the wake of global climate issues),''
Toyoda said. ''Strengthening them are a key challenge (for us).
Toyoda said the carmaker decided to completely pull out from the race and does
not intend to supply engines to F1.
According to sources close to the matter, the automaker is looking for a
possible buyer of its F1 team in Europe.
The president said, however, the company will continue other ongoing motor
sport activities, apart from F1, as well as its baseball and figure skating
teams.
The Aichi Prefecture-based automaker joined F1 in 2002 to enhance its
technological capacity and boost its image in Europe, and had said it would
remain until 2012. Toyota ranked fifth out of 10 teams in the F1 constructor
standing for the 2009 season.
Satoru Nakajima, who became the first Japanese racer to fully take part in F1
racing in 1987, was downcast by Toyota's decision, saying, ''I'm filled with
sadness. The economic conditions must be really bad (to force Toyota to quit F1
participation).''
According to Toyota, it took part in 140 competitions and had 13 podium
finishes, but failed to garner the top spot.
Toyoda declined to comment on how the announcement will impact its interim
earnings report, which is scheduled to be announced Thursday.
Toyota's pullout from F1 comes on the heels of similar decisions by other
Japanese automakers and auto-related companies.
In July, Toyota's subsidiary Fuji International Speedway Co. said it will stop
hosting Japan's F1 Grand Prix races at its circuit in Shizuoka Prefecture from
2010, citing sour business conditions.
On Monday, Bridgestone Corp., the solo tire supplier to F1, said it will stop
supplying the top auto racing series at the close of the 2010 season in the
fall, citing the need to save costs and redistribute resources to environmental
areas.
Fuji Heavy Industries Ltd., the maker of the Subaru brand, and Suzuki Motor
Corp., also announced their withdrawal from the FIA World Rally Championship
last year, while Mitsubishi Motors Corp. announced in February its withdrawal
from the Dakar Rally.
==Kyodo