Toyota Exit Adds to F1 Woes
05/11/2009
The world's biggest carmaker, Toyota, is withdrawing from the F1 championship.
It is the third manufacturer to abandon Formula One within a year, following in the slipstream of BMW and its Japanese rival Honda.
Toyota blames the "abrupt economic challenges" that emerged last year for its departure. And it is not difficult to see where the problem lies.
The onset of the financial crisis sent shockwaves through the car industry. Like other manufacturers, Toyota saw its sales tumble. At the same time, the rising value of the Japanese Yen took a heavy toll on its bottom line.
In the year to the end of March, the company made a net loss of $4.4bn (£2.7bn), its first annual loss in nearly half a century. It is expected to lose even more money this year.
Several exits
Toyota's involvement in Formula One did not come cheap.
Until recently, it was spending more than $400m a year on the sport. Yet success proved elusive, and its team never won a Grand Prix.
Under those circumstances, Toyota clearly felt F1 was a luxury it could no longer afford.
Other Japanese firms are feeling similar pressures, prompting a remarkable exodus from top level motorsport.
Tyre maker Bridgestone is to follow Honda and Toyota out of F1 at the end of next year. Subaru and Suzuki have already abandoned the World Rally Championship, and Kawasaki has pulled out of motorcycle grand prix racing.