MAY 11, 1998

Mecachrome aiming for four supplies?

ALTHOUGH officially Mecachrome bosses are saying that the company is able to supply three teams with its V10 engines next season, we believe that it is more likely that there will be four supplies of the French engines in F1 in 1999.

ALTHOUGH officially Mecachrome bosses are saying that the company is able to supply three teams with its V10 engines next season, we believe that it is more likely that there will be four supplies of the French engines in F1 in 1999. Mecachrome manufactures and services the former Renault V10 engines. This is a very lucrative arrangement for Mecachrome as Williams and Benetton are each currently paying around $20m a year for the engines. Renault is in no position to return to F1 at the moment because there are more important problems needing to be solved and it seems that Mecachrome is being left largely to its own devices.

While Mecachrome works closely with Renault it is an independent company and in recent years has been struggling because of the cutbacks in defense spending in France. To increase the F1 involvement is a good way to increase profits as supplying extra engines does not increase costs enormously. We understand, however, that it makes more financial sense to supply four teams rather than three.

This is very good news for Sauber and British American Racing both of which have been trying to sign Mecachrome deals in recent weeks. Sauber wants to get the engines and rebadge them Sauber Petronas, while BAR needs a stop-gap engine for a season or two before the team's intended engine supplier - which we believe to be Honda - is ready.

The only thing standing in the way of a quadruple Mecachrome supply is Frank Williams who has a written agreement - although not, as we understand it, a contract - that supply will be restricted to two teams. There is some doubt as to whether the agreement is with Renault or with Mecachrome but either way Williams is not likely to fight too hard. The team knows that the engines are not going to be right up there with Ferrari and Mercedes in 1999 and that it would be wiser to sell the exclusivity and use the money to invest in the Williams-BMW project for the year 2000. Williams made a similar compromise in 1994 when Benetton negotiated a deal with Renault. Williams ended up with a lucrative contract to run Renault's touring car team in the British Touring Car Championship.

We expect, therefore, that negotiations will be completed within the next few weeks for Williams, Benetton, Sauber and BAR to all have Mecachrome engines in 1999.