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FEBRUARY 9, 2006

Renault boss not helpful for F1 marketing men

The news that Renault chairman Carlos Ghosn is going to look at the Formula 1 programme each year is going to go down like a lead brick at Renault F1 in Enstone where the marketing department is just getting down to finding a replacement sponsor for Mild Seven for the 2007 season. For the marketing men in F1 the biggest problem at the moment is the political instability in the sport and the fact that Renault cannot go along to potential sponsors and offer them a guarantee of a long-term deal with the French manufacturer is going to be a real handicap when it comes to signing up a title sponsor.

"We are going to see how things go year by year," said Ghosn. "We'll look at the situation in 2007, then 2008, and again in 2009."

Given that title sponsorships are generally very long-term by nature (the new deal between McLaren and Vodafone is due to run for 10 years and Ferrari latest deal with Marlboro runs until 2011), in order to enable a sponsor to properly exploit such a programme, the year-by-year pronouncement seems decidedly odd and it is very unlikely that a man of Ghosn's acumen, surrounded by relatively intelligent executives, does not fully understand the implications of a year-by-year policy. This may not be something that the team wishes to hear (indeed Flavio Briatore got very hot under the collar recently when the French press suggested that the team had little future) but if there is to be a replacement for Mild Seven the team is going to need to offer rather more guarantees or else Ghosn will have to face the prospect of paying for the whole operation himself.

Ghosn's overall message was that he wants to make Renault Europe's most profitable volume car company and is aiming to sell 800,000 more cars in 2009 to the 2005 figures. In order to do this Renault will be launching 26 new products between now and 2009, including a drive into the luxury range where Renault has traditionally failed to do very well.

Ghosn also announced a cost reduction programme and plans to optimise investment. This will involve reducing costs across the board and pinning down research and development costs. The company revealed its 2005 figures, saying that European sales have dropped and debts have increased sharply.

The good news is that at the moment the Renault R26 seems to be the class of the F1 in 2006, although it is really too early to be sure that this is a correct picture.