NOVEMBER 25, 2007

A point of interest

Renault's troubles in Formula 1 may be weighing heavily on the company at the moment while it waits for the FIA World Council meeting in December, but the company still has to look ahead, even if there is a threat that the F1 team could be thrown out of the World Championship by the FIA.

Last summer McLaren is reported to have narrowly escaped a two-year ban from F1 during its espionage hearing before the FIA World Council and Renault has already admitted to things which were never proved against McLaren. Having fined McLaren $100m and taken away all of the team's 2007 points, the FIA cannot easily allow Renault to get away with a lesser punishment without stirring up questions about the fairness and the credibility of the federation.

Thus Renault must consider the worst case scenario which could be some form of ban. The team could, in theory, be sold to a third party and continue to compete under a new identity.

Such a manoeuvre would not be unprecedented. When Renault was privatised in 1996 it announced almost immediately that the F1 engine programme would be sold to Mecachrome. The F1 engines were then sold to customer teams via a company called Super Performance Competition Engineering (SPCE), owned by Flavio Briatore, and these were raced as Supertec V10s. Renault was paid to do development work, Mecachrome was paid by SPCE and it charged the teams for their engine supplies. Thus Renault kept the core of its engineering team together and was ready to return to F1 when the decision was taken to buy the Benetton team in 2000, although Renault did not begin to race under its own flag until 2002. A third party could be found to "baby-sit" the team for a period.

The news that Renault has just announced a new three-year contract with Mecachrome International, the parent company of the original French operation, is no surprise - the two companies have worked together for more than 30 years - but it does indicate that Renault is not about to get out of the F1 business - at least not in the short term.

While Mecachrome itself may not wish to own an F1 team, it is keen to continue its engine supply arrangements with Renault F1 (or whoever owns the team in the future) and Red Bull Racing. The relationship with Renault F1 is obviously the close but Mecachrome also admits that "we also manufacture key engine components for other Formula 1 constructors" and the company lists Ferrari and BMW amongst its customers.

Mecachrome says that it experienced "a slow-down in our Formula 1-related revenues due to the freeze in engine development announced in the fall of 2006" but added that this was offset by a new arrangement with Peugeot Sport in relation to the LMP1 programme. Mecachrome has been registered as a Canadian business since 2004, with its headquarters in Montreal. It is now headed by Guillaume Casella, the son of previous boss Gerard Casella and grandson of the company founder Eugene Casella, who set up the business in Paris in 1937.