Renault looking for a fourth team

Renault Sport says that it is open to supplying engines to a fourth team in Formula 1 in 2012, if there is a team out there that would like to use the French units for just one year, before the new 1.6-litre engines arrive in 2013. It is not likely that there will be any takers given the disruption of an engine change and the fact that most teams now have contracts to get them to the end of the current formula. Renault currently supplies the Renault team (although it no longer owns the business), Red Bull Racing and Team Lotus. This would give the French engine company the best possible return on its investment in F1 and help to provide funding for the development of the 2013 engine. The price of the engine would be around $6.5 million, but this would likely be with stipulations about fuel sponsorship, which would rule out any team with a deal with a fuel company other than Total. At the moment there are not many fuel companies in F1. McLaren has a with ExxonMobil, Ferrari with Shell, Mercedes with Petronas and Williams with PDVSA, but beyond that there is only Total, which is a Renault partner. What is fascinating is that only one of these is in the top 10 oil companies in the world, a list dominated by the big national oil companies such as the Saudi Arabian Oil Company and the National Iranian Oil Company. Venezuela’s PDVSA is the odd man odd in fifth place but otherwise F1 oil companies are 14th (Petronas), 17th (ExxonMobil), 20th (Shell) and 26th (Total).

27 thoughts on “Renault looking for a fourth team

  1. I guess a fundemental difference between the big oil companies like the Saudi Arabian Oil Company and exxonmobil and shell is that the later are retail oil companies.

    Given the push to a greener engine formula it may attract the likes of BP and Texaco to the sport as well as new engine manufacturers.

  2. I thought Renault were called Lotus Renault GP now, not just Renault.
    Bearing in mind that Renault don’t own any of the team now.

    1. Richard Ferguson,

      One has to try to help readers understand which team is being referred to. If there were some grown ups involved this would never have happened.

  3. Joe,

    How are those oil companies measured? because some lists are created taking into account the reserves they have available, rather than revenue streams. Obviously state-owned companies will always come top in these situations, especially in Countries such as Saudi-Arabia. I thought that if measured by revenue, shell and exxon-mobil were further up there. However I could easily be wrong. And revenue and value are very different matters.

    Either way, I agree that it is interesting. In many ways it shows that these firms dont think that they could gain much through advertising: people generally dont buy petrol on the basis of which oil company they like; I also know that as percentage of revenue for the companies, fuel sold at the forecourt accounts for a very small percentage of their income. Ultimately, I dont see much gain for the companies which are involved in F1. Why, for example, PDVSA think that having an F1 team will help them, I dont know. Their revenue is pretty much guaranteed by the global oil consumption; as a state-owned company with large, guaranteed, national reserves available, they have little to worry about. Add to that their country’s membership in Opec, and really I dont see why they give two hoots about what we, the F1 spectators, think of them or their business.

    Seems to have rambled on for longer than I planned, but I would be interested to hear what value people think F1 exposure offers to these energy companies. I see that at best they may offer chances to make new business links across to other sponsors, maybe also if they are a PLC and want shareholders to gain some sort of value or pride or whatever…(but I think that doesn’t really work as ultimately share price and shareholder sentiment will entirely depend upon the economics involved). Anyway, I’d love to be enlightened.

    Henry

  4. Team Lotus were courting Brazilian oil company Petrobras, but this came to nothing at the same time as their Renault engine contract was signed, maybe they already have an agreement for 2013, with Renault and Total.

  5. Joe, this question is not directly related to Renault engines, but I’ve always wondered what an F1 pit garage smells like. I have always imagined it smells better than any old mechanic garage which has that greasy tang of oil in the air mixed with sweat. I don’t know why I think this but I think it is because of the hi-tech image and glamour of F1.

    So, in short, what does an F1 pit garage smell like during a race weekend?

  6. Joe, for someone with quite strong opinions on various facets of F1-related marketing you surprisingly picked up a list of oil companies ranked by their oil reserves.
    My guess is that F1 involvement makes much more sense for an oil company with large share of revenue and profits being made in retail and on markets with strong following of F1, than to those who may be sitting on zillions of barrels but make trade within a very limited inner circle of the industry (and politics). The latter probably do not need very wide-spread brand awareness.

    Therefore one also has to consider lists arranged by revenues, profits, etc. (i.e.: http://en.wikipedia.org/wiki/List_of_companies_by_revenue or http://money.cnn.com/magazines/fortune/global500/2010/full_list/ or http://www.forbes.com/lists/2009/18/global-09_The-Global-2000_Rank.html)

  7. Richard Ferguson

    Lotus sponsor the works Renault and the chassis is still a Renault. It’s like if you kept referring to McLaren as a Vodafone car.

  8. Any idea how much other engine deals go for? Or are they all comparable? Not that cosworth is terrible but if the Renault is cheaper then virgin and HRT have nothing to lose with a switch – that is if HRT makes it through this season

  9. If the rumors were true Renault F1 team vetoed engine-supply deal between Williams and Renault. If that is true they could have had 4 Renault-powered teams. I wonder if the Renault team has the same power over engine deals now that it is no longer owned by Renault…

  10. Although I wouldn’t mind seeing more money in racing. Especially in lower formulae (as they tend to hog sponsorship money for themselves thus throwing the whole lot in the F1 bin as it were). Not to completely digress but funding a few phenom drivers is not exactly the most effective way of cultivating a sport. One could think of various other avenues of allowing the rumored majority of all motorsport sponsorship income (ie F1 teams, tracks and the like make more money from sponsorships than ALL of the other flavors and divisions of motorsport combined). Large companies dump large amounts of capitol in to Formula One surely because it is viewed as the best bet for those with money to spend.
    Now then, enter the Oil Companies, all 10 of the major ones, then include all of their subsidiaries and contractors. Many of them deal with each other at some level for highly specialized services such as drilling, buying off politicians, and distribution of vast amounts of liquid in quantities that are hardly fathomable in exchange for vast mounts of money paid by consumers for a commodity whose price is set and traded upon on the worlds market. Thus profits for oil companies are easy to forecast and any trouble for the market is pennies from heaven because, after all, any industrialized nation needs fossil fuel to operate (thats what the lobbying is for).
    So then if you have a captive audience who literally cannot survive without what you produce and you and oh, say 9 of your closest ‘family friends’ have an effective monopoly on said good… WHY ON EARTH WOULD YOU WASTE MONEY ADVERTIZING? (public relations excluded of course… ie what disaster have you caused in the past 12 months)

  11. I can understand what you are saying Joe, but don’t you think that F1 fans find that a little condescending?.
    Afterall we have had one round already, and if you watch F1 you would surely know by now, who the different teams are.

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