TOKYO, Nov. 4, 2009 (Kyodo News International) --
(Editors: ADDING REMARKS, DETAILS)
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. (NYSE:HMC) , 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.
