Honda website
Honda website

OCTOBER 15, 2005

Coca-Cola and Formula 1

The idea of a Coca-Cola sponsorship in Formula 1 is to some extent at least a logical move. Red Bull has been cutting into the market share of Coca-Cola in various markets around the world and as Red Bull is big in motor racing, it makes sense for Coca-Cola to be there as well to counter-balance the visibility. But a series sponsor in F1 is not an easy thing to achieve for a number of reasons. Normally a series sponsor would have a visible presence on all of the cars and one cannot imagine a situation in which Red Bull cars would run with Coca-Cola branding. And it is not in the Formula One group's interest to drive Red Bull away at the moment. The trackside signage is another element in the picture and this has been sold several years ahead at some of the race tracks. The terms of the deal will be hard to work out. Secondly there is the question of whether the FIA-FOM contract allows for a title sponsor for the World Championship because the official series brand is the "FIA Formula One World Championship" and the federation's brand would be subjugated with a sponsorship. This is not really an issue because the contract could probably be altered if the series sponsor was willing to throw some money in the direction of the FIA.

It is more likely that the Coca-Cola sponsorship - if it exists at all - is being used as a negotiating tool in the talks with the manufacturers. If the Formula One group can show that it is doing more to promote the sport, it can only be a good thing to help placate the teams and bring about a peaceful solution to F1's troubles.

It is more likely that if Coca-Cola is coming to F1 it will do with a team or perhaps even two teams and compete head-to-head on the track with Red Bull. Coca-Cola is a company that likes to be associated with good health and wants nothing to do with tobacco. Thus if Ferrari is retaining links with Philip Morris and Red Bull, Coca-Cola will not do a deal with the Italian team.

Our feeling is that Coca-Cola may be the sponsor of the new Honda team. This would be particularly useful in Asia where much of the soft drinks war is being fought, particularly in China where Coca-Cola has had a presence since the 1920s and has had a close relationship with the Chinese government since the 1980s when Deng Xiaoping began to open the country to foreign investors. Today Coca-Cola is involved in 24 bottling joint ventures in China.