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JULY 26, 1999

Peugeot's F1 future rocky

PEUGEOT's future involvement in Formula 1 looks increasingly unlikely after the 2000 season following the announcement that the French carmaker's sister company Citroen will not be allowed to enter a team in the FIA World Rally Championship. The news has not gone down well at Citroen which has won two rounds of this year's series with the Xsara Kit-Car driven by Philippe Bugalski.

The decision came about because Peugeot has plans for a full World Championship program next year with the 206 WRC model and it seems that it does not want to compete against itself. The decision underlines the importance that Peugeot management is attaching to the 206 rally program and there seems to be a general malaise within the company regarding the future of the unsuccessful Formula 1 program. Peugeot has been in Grand prix racing for six years and has failed to win a race, despite having what is clearly a very strong engine. The company has suffered badly from F1 politics, being dumped early on by McLaren and then having to spend three years helping Jordan to build up. The project was going to be axed at the end of 1997 but Alain Prost managed to convince the company to stay on with his team but that has meant that once again Peugeot has suffered as the team it supplies is developed. The choice now appears to be to double the involvement or quit and there have been rumors to support both cases.

There is a strong faction within the Peugeot management which is arguing that the aim of motor sport is to sell cars and that the 205 rally program in the early 1980s - which was run by Jean Todt - showed that rallying was a very successful way of doing that. They reckon that priority must be given to the 206 program.

Others argue that the company needs more control of its F1 activities and there have been negotiations in recent weeks for the company to buy a shareholding in Prost. Alain Prost does not want to lose control of his team and we hear that as a result Peugeot has even considered a buyout of Minardi.

Peugeot engineers in Paris are finishing off a completely new engine which should be run next year but there is very little logic in doing that if the program is to be axed. Having said that Peugeot may be delaying its decision about the future while it sees if Prost can find a new engine partner for 2001. If he can the company can fade out of F1 without too much adverse publicity - which is probably what it wants to do. One scenario which should not be overlooked is that Prost will run with Peugeot engines in 2000 and the company will then sell its engines to Supertec, which will need a replacement for the old Renault engines it is currently selling to teams.

This would give Peugeot a return on its investment while allowing it to slide quietly out of F1. It also solves Supertec's problem s for 2001. The problem is that someone is going to have invest a lot of money for that to happen and as Supertec has always appeared to be a profit-making operation for its owners rather than a charitable institution it is hard to imagine that they will dip into their pockets, although the investment would probably be paid off and profits would begin again in the year 2002.