JULY 29, 2009

BMW to host press conference

BMW has called a press conference for today in Munich to discuss "current developments in motor sport". This has led to speculation that the company will be quitting Formula 1. Whatever the case, it is a press statement that will involve not only BMW's motorsport director Dr Mario Theissen, but also his boss Dr Klaus Draeger and the overall boss of the company Dr Norbert Reithofer.

The team has had a very poor year in Formula 1 and in the World Touring Car Championship, but BMW has been a major player in the Formula One Teams' Association. Pulling out now, when the new Concorde Agreement is set to be signed, tying the company into F1 until 2012, would be an odd decision. There is, in any case, a commitment that was made by BMW to remain in the sport until 2012 and the signing of a new Concorde Agreement should release a considerable sum of money to each of the teams. If BMW pulls out and closes the team, it would face legal action from Formula One Administration. Thus the best option if Munich wants to reduce its involvement, would be to continue as an engine supplier and hand the team back to its original owner Peter Sauber. The money that will arrive from the Concorde settlement would help to pay for the team in the future, along with the existing sponsorship. BMW was previously an engine supplier and could revert to that position, although it did not win the World Championship with Williams and therefore decided that it needed to control its operations in F1 and so acquired Sauber. There was heavy investment in the team and until this year the team had been on an upward trajectory.

BMW is doubly upset by the developments in motorsport at the moment as it is unhappy about the way in which things are going in the WTCC as well.

Quitting F1 would be a radical step for the company, but it is trying to cut cost at the moment as it aims to improve its finances after a very difficult 2009. Sales in the important US market are now much better than they were, although still around 18% down on last year and it seems that the firm is doing better in the US than its major rivals, notably Audi, Mercedes-Benz and Lexus.