Worrying trends in Japan

The news that Bridgestone is to quit Formula 1 is the latest announcement in a series of similar decisions from Japan. In recent months the sale of new cars in Japan has sunk to a 32-year low in part because of the economic troubles in America and in part because of Japan’s shrinking population. The high value of the yen against the dollar means that profts from America are worth less and things have got so bad that the industry is now looking to shift production out of Japan and, at the same time, is looking for alternative markets in the Middle East and Asia.

This year’s Tokyo Motor Show, normally one of the biggest in the world, was a shadow of its former self with no major international brands exhibiting and the floor space half what it was two years ago. The only good news in the industry at the moment is that reduced taxation on hybrids and other cleaner cars has led to an increase in this sector and the Japanese car makers have been scrambling increasingly into that market. Hybrid vehicles are becoming part of the mainstream.

This trend, however, means that the involvement in high profile areas of the sport appears to be considered less important than once it was. There is no serious global competition for hybrid/electric racing cars and so the move in that direction is bad for the motorsport in its current form.

In December last year Honda quit F1, Subaru and Suzuki quit the World Rally Championship. Mitsubishi announced soon afterwards that it was stopping its highly successful off-road programme with the Dakar Rally.

Nissan has stopped its activities in South Africa, where it was a big player in the national rallying and production car series. The company however continues to race in the Japanese GTs and says that motorsport is an important part of Nissan’s strategy for building a strong brand and is “a dynamic proving ground for automotive innovation”.

Having said that Nissan supports a lot of grassroots racing around the world, a strategy which Mazda also uses, particularly in the United States where the company claims that there are more Mazdas racing on any weekend than any other brand of vehicle. These include series for MX-5 Miatas, RX-8s, Mazda 3s, Mazda 6s, RX-7s and other vintage Mazda models. The Miata is reckoned to be the most-raced production car in the world with nearly 1500 of them appearing in SCCA events across the US each year. Mazda also sponsors the Laguna Seca raceway and the Skip Barber Schools, for racing and for safe driving.

Toyota has axed its support of a Japanese Grand Prix at Mount Fuji but remains the Japanese company with the biggest global motorsport footprint at the moment with its high profile NASCAR and F1 involvements. Honda remains the sole supplier of engines in the Indy Racing League. With no opposition in the series it concentrates on minimizing costs instead of competitive development and the engines each last 1200 miles between rebuilds. They are leased from Honda at a cost of around $2.9m per season per car. In the future there are plans for a new engine formula with several manufacturers apparently interested, but these have been delayed until 2012 at the earliest.

The Formula 1 world has made some token gestures towards being seen to be green but it is clearly not enough to convince anyone. This is a problem that needs to be addressed as if F1 does not make a move in that direction someone else will and that will attract manufacturers. We have seen that already at Le Mans where Audi and Peugeot have gained a lot from their diesel development for the 24 Hours. Le Mans problem is that while there is a serious of races other than Le Mans there is no great interest in them. Only the 24 Hours is big. There is a similar problem these days with Indycars as it is fair to say that the series survives only because of the interest that exists in the Indy 500.

21 thoughts on “Worrying trends in Japan

  1. The two apparent exceptional cases of Nissan & Mazda are possibly invalid if one considers the extent of their foreign ownership, by Renault & Ford respectively.

    If you ignore these two manufacturers, Japanese involvement in world motorsport shrinks to near-Korean levels of non participation.

  2. Joe,

    Do you think that Bridgestone (via their Firestone brand) are about to pull out of their Indy Car race supply contract and title sponsorship of Firestone Indy Lights as well as F1?

    Or, conversely, do you think Indy Racing League are about to announce an increased involvement for Bridgestone/Firestone in IRL?

    I heard that a title sponsor announcement for IndyCar is due this week, but I think everyone is expecting that to be IZOD.

  3. Joe,

    I can say from experience that the atmosphere at this year’s Tokyo Motor Show was positively dreadful. My full report is coming, but the general impression among Japanese motor fans is that the country has turned down a very practical and uninteresting path.

    With every stand pushing green initiatives, only Nissan, Subaru and Lexus even dared hint at performance and fun. This goes right along with the trend with Japanese youth to see performance as superfluous. I’m genuinely unsure what direction the domestic market will take here, contingent on any recovery at all.

    One can only imagine how interest in motor sport can be rekindled.

  4. What happened to the idea of a ‘global’ engine muted some time back? I seem to remember the idea was a 2 litre four cylinder engine, that could be turbo (or super) charged for bigger categories. This way the manufacturers could use the same basic engine for everything from F3 or touring cars up to IRL or F1.

  5. “Having said that Nissan supports a lot of grassroots racing around the world…”

    Sounds a bit like “Motorsport 2.0”

  6. What seems dangerous to me, it is that in the eye of the mainstream audience being green & being a competitor are antinomic…

    The young japanese (quite a minority down there) are very interested in the civic behaviors to preserve our planet but they’ don’t see the point to race to achieve results in this area.

    This could lead to a global loss of interest in motorsport not only in Japan but in all developped countries when you see all the media frenzy about “going green” !

    What’s your opinion Joe ?

  7. nice piece Joe. F1 HAS got to stop paying lip service to green initiatives and start doing something concrete if it wants to lead in this area. I’m not sure how feasable any type of hybrid design would be for an F1 car but they could definately persist with KERS and quite possibly the reintroduction of turbos which would have relvance for road cars.
    The other area where they should be leading is in alternative fuels, whether bio-fuel or diesl or whatever, the amount of R&D that the oil companies put into F1 is phenomenal and I’m quite sure that, again, its an area where F1 could lead thus making it more attractive to manufacturers, oil companies and sponsors. Just about every major company in the world has some sort of green initiative on the go, no matter how weak, they’d all love the chance to crow about it in the worlds most watched sport.

  8. Sustainability issues go far beyond the fuel the cars use. The ridiculous excesses of new circuits such as Yas Marina far outweigh the fuel consumption of F1. Calculate fuel usage of an airbus A380 on a return trip Asia – Europe and compare it to the usage of the whole F1 circus in a year – it is not that much. F1 and motorsport are often picked on as being profligate but it is the ‘entertainment’ aspect that is unsustainable – petrolheads would be happy standing in mud watching fast cars driven by heroes round circuits Bernie and his gang haven’t visited in 50 years. Please can we put this into some kind of factual perspective? Otherwise we are adding kindling to the fires that will fuel Toyota’s exit from F1- though that decision is probably a done deal. Where is the well-deserved criticism for all these boring new circuits from a sustainability perspective?

  9. I wonder if Max would like to consider a new hobby for his ‘retirement’. Start an F1 equivalent for hybrids, or electric cars – start from the Tesla Roadster, or similar. These cars have the performance and the range for it now.

    It could be the start of a real revolution in car design, as was sponsored by racing a little over 100 years ago.

    If the car racers aren’t careful, the bikers will get ahead: there’s already an electric Isle of Man TT (TTxGP), and a short series of six races (I think) in 2010 with the same kinds of bikes.

  10. Joe,

    Any thoughts on the reports that Toyota’s announcement re its F1 future is being moved forward, and that bad news is expected?

    Ash

  11. Well, I guess that would explain why they don’t have anyone under contract for 2010, and why they let Williams out of the engine deal without a whimper.

    Howett GP, anyone? Although, as I think Joe said a few days ago, if you were looking for the absolute worst place to establish an ungainly 700-person motor-racing team, Germany, far from the heart of F1, and in a jurisdiction where redundancy is extremely difficult and expensive, would be high on the list.

    Toyota’s costs for severance etc even to get the team down to the new proper size are likely astronomical — and the successor liability of anyone coming in and purchasing the team would presumably be similar. Anyone know what German law says about the ability to make staff redundant when a business is purchased?

  12. @ Jim Hughes

    Ford sold 20% of its stake in Mazda, so its less than 15% now. And more Gulf region, or local gov’t money is in car companies than home ownership. Take GM for example, the US gov’t invested (loaned) $57.6 billion 61%, UAW (backed pay?) (17.5%), Gov’t of Canada (about $10 billion) (7.9%) and Gov’t of Ontario 3.8% ($?).

    Whereas the Nissan Renault issue is more complitcated. Nissan owns 15% of Renault and Renault owns 44.5% of Nissan, its thus more of an Alliance as their own documents name it.

    In any case your point is fair, foreign ownership skews this issue. But I believe most Japanese companies are mostly islander owned, despite foreign held debts but that does not mean foreign ownership.

  13. @Ash.

    I’m not certain about Germany but the way around it in the UK is not to buy the company but to buy it’s assets using a seperate corporate identity and then use that company to employ the desired staff under new contracts. Any residual employment/redundancy responsibilities remain with the original business.

  14. I have a more general question. What is the benefit for auto manufacturers to be in motorsports at all? There’s technological/engineering benefits. There’s the promotional/advertising benefits. Is there any other major category of benefits to be extracted from motorsports by the manufacturers?

    I ask this, because if the technology and motorsport are going in opposite directions, then there’s no engineering benefit. Without the technical benefits, surely the manufacturers can find better and more cost-effective advertising than motorsports.

    It seems like motorsports have to either roll over to the manufacturers and be tech proving grounds (racing competition be damned), be spec series where the primary focus is driver talent instead of car ability (technology be damned), or go back to being a privateer sport of enthusiasts who are okay with throwing money down a pit for the love of the car in general. The last one could create a think tank of sorts for new ideas in automotive technology, but if they can’t get anyone to buy the ideas, how do they sustain the sport?

  15. “It seems like motorsports have to either roll over to the manufacturers and be tech proving grounds (racing competition be damned), be spec series where the primary focus is driver talent instead of car ability (technology be damned), or go back to being a privateer sport of enthusiasts who are okay with throwing money down a pit for the love of the car in general. The last one could create a think tank of sorts for new ideas in automotive technology, but if they can’t get anyone to buy the ideas, how do they sustain the sport?”

    The paradox that has governed auto racing for quite a few decades. A book could be written on this debate, and as far as I know no one ever has because most people are not interested in the debate as much as they know their own personal answer to the debate and do not want their answer questioned.

  16. I’d be happy to see the F1 teams given a couple of barrels of fuel (bio, or otherwise) for the race, and told to get on with it.

    The teams would have to make more efficient engines, simply to get to the end. The lessons learned may well even feed back into road car engines. Everyone wins.

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