MAY 27, 2005

Tuesday in Munich

On Tuesday in Munich the management board of BMW will meet to discuss the company's plans in Formula 1 in the years ahead.

On Tuesday in Munich the management board of BMW will meet to discuss the company's plans in Formula 1 in the years ahead. The decision will rest with chairman, Helmut Panke and fellow board members Ernst Baumann, Michael Ganal, Burkhard Goschel, Stefan Krause and Norbert Reithofer. They will be presented with a plan, proposed by BMW Motorsport boss Dr Mario Theissen, to take over the Sauber team, probably with some form of lease-purchase deal. Sauber has some demands which must be met, which probably include the undertaking from BMW will maintain the facility in Hinwil, in Switzerland.

An in-house F1 project would be a major undertaking for the Munich company but the world's largest premium carmaker is doing well at the moment, despite the effect of the weak dollar on its profits. The United States is BMW's biggest market and accounts for nearly a quarter of group car sales.

The performance of the BMW shares has not been very impressive in recent years but the company said recently that it intends to buy back up to 10% of its shares, which will involve a lot of investment. The company already spends around $250m in F1 and that will need to increase, depending obviously on the team's sponsorship. BMW has insisted with Williams that the team runs the cars in BMW style and that has meant that some sponsors have not got involved with the team because the blue and white livery does not suit their marketing aims. That may also be the case for Petronas and Credit Suisse.

Embarking on an F1 programme will be an additional financial burden for BMW and the rewards may be a long time in coming as it is going to be a long haul to make Sauber competitive and there is going to be a dip in performance if Williams decides it does not want to stay with BMW.

At the recent launch of the company's new Leipzig factory, Panke told reporters that "we are not satisfied with the sixth and seventh places and we are in intensive discussions on how to do better, but F1 and BMW belong together".