MAY 1, 2000

The future of Peugeot in F1

IN recent weeks there has been increasing speculation about what Peugeot intends to do in Formula 1.

IN recent weeks there has been increasing speculation about what Peugeot intends to do in Formula 1. There have been suggestions that the company will withdraw at the end of the season and will sell its engine program to an outside organization. There are at least three organizations which would be interested in such a deal: Supertec, Sauber Petronas Engineering and Fondmetal. This would help the company recoup some of the money invested in F1 without any success.

At the same time there have been rumors that Peugeot may decide to buy a team. One rumor we heard in Imola was that Peugeot was looking at a deal with Jordan Grand Prix. This was denied by the team and does not seem very likely as EddieÊJordan is not showing any signs of wanting to stop being involved in the sport. He and his partners Warburg Pincus have agreed that each will sell 20% of their shares (Jordan has 60% and Warburg Pincus 40%) if an engine manufacturer wants to invest in the team, but it is unlikely that Peugeot will want to buy only 40% of the team because this will not give them control of the operation. We have also heard stories about Alain Prost selling but these stories are similarly unlikely. Prost may not be enjoying himself at the moment but he is optimistic that he can make the team successful in the longer term. Prost and Peugeot have not enjoyed a very good relationship in the last three years and so the idea of Prost selling control but staying on to run a Peugeot operation can be written off as fanciful.

Prost signed his deal with Peugeot in February 1997 for a three-year supply of engines in 1998-1999-2000. That was six months before Jean-Martin Folz became chairman and chief executive of the company. He has shown very little interest in F1 in the last three years and even Frederic Saint-Geours, the man who championed Peugeot's involvement in F1 in 1994, has not been seen around the racing circuits very much in recent years.

Although there is support for the F1 program amongst some Peugeot dealers, the company would probably be better off withdrawing from F1 and capitalising on its more successful World Rally Championship program with the Peugeot 206 WRC model. The company's major target for sales is in Asia where rallying is still more popular than Formula 1.

At the moment Corrado Provera, the boss of Peugeot Sport, says that no decision has been made about the future but we expect a decision soon. The announcement of that decision will depend on the decision itself as Peugeot will not want to highlight its withdrawal from F1, just as recently it ignored its 100th F1 race.