by Frank Beeton
auto alert
A probing review
of significant global
motor industry news
Formula One – A
(Corporate) Political Path
Forward?
Auto Alert does not often enter the realm
of motor racing – there are a number of
other columnists writing in aBr that are far
more focused on the subject, and provide
quality regular updates on the goings on
in the world of automotive competition.
However, the latest version of the sport’s
supreme category, Formula One, which
came into force at the beginning of
2014, has been highly controversial,
with voices having been raised by a
number of stakeholders questioning the
appropriateness of the latest regulation
changes, and asking if they are good
for the sport. Issues such as the much
lower levels of noise generated by the
latest cars, the emphasis on reduced fuel
consumption contained in the current
rules, and potential reliability problems
stemming from the now elevated levels of
complexity have been debated at length.
The outcomes of the recent Bahrein
and Barcelona Grands Prix, which
featured epic internecine duels between
Mercedes-Benz drivers Lewis Hamilton
and Nico Rosberg, as well as numerous
intense battles for the minor placings,
should have eased concerns about the
spectacle provided by the new formula.
However, it would be naive to think
of Formula One in purely sporting or
entertainment terms. The new formula,
which has been devised to increase
the technological relevance of this
very expensive activity in the modern
world, was designed specifically to
retain the involvement of major motor
manufacturers in financing its future
existence. Mercedes-Benz is unique
in having its own branded team, while
its power units are used by “customer
teams” McLaren, Williams and Force
India. Renault is also involved in providing
power units for the likes of Red Bull,
Lotus, Toro Rosso and Caterham, while
Ferrari, firmly in the Fiat empire, builds
and races its own iconic cars, while also
providing power units for Sauber and
Marussia. It is also highly significant that
Nissan’s luxury nameplate Infiniti is the
brand sponsor for Red Bull.
The current situation, where Mercedes
appears to be gaining a level of Grand
Prix domination seen before in the
years before World War II when the
same manufacturer, and German
rival Auto Union, were the top teams,
and in 1954/5 when Mercedes once
again proved dominant, has, in our
view, the potential to shake up the
Formula One status quo considerably
in the years ahead. If this domination
were to continue, four-times World
Championship-winning Red Bull Racing
can be expected to desperately seek
a return to competitiveness. Bearing
in mind the Red Bull’s Renault-Nissan/
Infiniti connections, and the increasingly
close global working relationship
between Renault-Nissan and Mercedes’
parent Daimler, there is an intriguing
possibility that the French/Japanese
alliance’s boss, Carlos Ghosn, who is
well known for his hard-nosed approach
to business, may wish to extricate
Renault from the very costly F1 power
unit game. He could then, of course,
obtain these components, on behalf
of Infiniti Red Bull, and possibly Toro
Rosso, from his business partner,
Mercedes, to make the resulting Red
Bull Mercedes combination ultracompetitive.
The aforementioned close relationship
between Daimler and Renault-Nissan
could also be cause for closing the
door on other teams, with the Mercedes
power unit restricted to only its own
and the two Red Bull-owned outfits.
McLaren, of course, will be unaffected,
as they are destined to team up with
Honda in 2015.
| words in action
20
june 2014
Williams and Force India, however, along
with Lotus and Caterham, will need to
find an alternative power unit source
if the above mentioned scenario plays
out fully. But wait, with Mercedes-Benz
dominant, what about their luxury car
arch-rivals BMW and Audi (in other
words, Volkswagen)? They will surely not
wish to allow the three-pointed star to
go about shouting its F1 success story
with impunity, and are sure to follow
Daimler into Grand Prix racing. After
all, BMW have been there before, and
Volkswagen has recently shouldered its
way into the World Rally Championship
with immediate success. Both of
them could easily pick up one of the
“powerless” teams, some of whom have
already developed very efficient chassis.
This, we believe, is the type of outcome
that Formula One may have envisaged
with its latest rule changes.
Fiat Chrysler Automobiles
Plans the Way Ahead
With the formalisation of the merger
between Fiat and Chrysler having been
completed early in 2014, the management
of the conglomerate, which is presently
the world’s seventh-largest carmaker,
has outlined its strategy for the next five
years. Significantly, the presentation of
this business plan by charismatic CEO
Sergio Marchionne was delivered in
Auburn Hills, Detroit, clearly signaling
the importance of the North American
market to FCA’s future success. Global
group sales, which ran at 4,4 million
units in 2013, are forecast to increase to
nearly seven million by 2018, which some
observers have labelled as an optimistic
objective, but others believe that
Marchionne has the ability to pull it off.
The core Fiat brand’s own expansion
is expected to come mainly from Latin
America and Asia, given continuing
economic difficulties in its traditional
European markets following a six-year