Why Merceds Will Leave F1 Before 2021

Why Merceds Will Leave F1 Before 2021

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PGN

Original Poster:

158 posts

166 months

Monday 9th December 2019
quotequote all
I reckon Mercedes will leave F1 at the end of 2020 but continue in the sport as an engine supplier.

Having had so much success it would be sensible to quit while they’re at the top. The only way for them from here is down. To remain competitive from 2021 they’d have to spend massively in 2020 before the cost cap comes in. The current senior management don’t appear to be as keen on F1 as the previous team were. Having gained a lot of great publicity from their success over the last few years there’s a risk that it won’t continue under the new regulations and that reputation could be tarnished.

By remaining in the sport as an engine supplier to McLaren they are partnered with a major team so a good showcase for the engine side. Engine development costs will be relatively small compared to developing a whole car and supplying engines to three teams will recoup much of those costs anyway.

It’s also interesting to consider Mercedes entry into Formula E. They probably feel that this is more relevant to the road car business as the move to EVs appears to be gaining pace. They could use 2020 for development and then try and tempt Toto and Lewis into the Formula E team from 2021.

Just a thought.

TheDeuce

4,707 posts

18 months

Monday 9th December 2019
quotequote all
PGN said:
I reckon Mercedes will leave F1 at the end of 2020 but continue in the sport as an engine supplier.

Having had so much success it would be sensible to quit while they’re at the top. The only way for them from here is down. To remain competitive from 2021 they’d have to spend massively in 2020 before the cost cap comes in. The current senior management don’t appear to be as keen on F1 as the previous team were. Having gained a lot of great publicity from their success over the last few years there’s a risk that it won’t continue under the new regulations and that reputation could be tarnished.

By remaining in the sport as an engine supplier to McLaren they are partnered with a major team so a good showcase for the engine side. Engine development costs will be relatively small compared to developing a whole car and supplying engines to three teams will recoup much of those costs anyway.

It’s also interesting to consider Mercedes entry into Formula E. They probably feel that this is more relevant to the road car business as the move to EVs appears to be gaining pace. They could use 2020 for development and then try and tempt Toto and Lewis into the Formula E team from 2021.

Just a thought.
Similar thoughts to my own, that I have expressed in a couple of threads with varying levels of agreement from others..

But yes, the fact is that whilst they stand an excellent chance of winning next year (and pre- cost cap they can and probably will throw everything at next year, to cement their historic winning spree), 2021 and beyond is simply too much of an unknown. They don't need to risk a year where they get it wrong, they can, as you say, leave on a high. Why would they jeopardise that for the sake of a gamble in 2021?

The only alternative way of judging the situation that I can think of is; what if they don't actually care (at the board level) about winning? Toto etc will care very much of course, the board bank-rolling and backing the team might think "We probably won't be able to continue our winning streak into 2021, that's a bit sad but what the hell - we'll still be somewhere near the top and that alone makes F1 more attractive than any other form of marketing we could sign off on". It's a bit dull I know, but we have to keep in mind that in the end, it could come down to black and white numbers more than passion/pride.

I personally still think the first scenario is most likely, and they will leave end of 2020. The way I see it, so long as they provide the engines they're still 'in' F1, and more than that, whenever any other team have a success, the commentators and press will always compare it to what Mercedes achieved. They will remain the standard bearers in the sport and get plenty of mentions even if they aren't it anymore. Just like every conversation about Lewis Hamilton's achievements includes a mention of Michael Schumacher. So long as you're the one to beat, you will get a mention each time until the day you actually are beaten.

The Moose

19,348 posts

161 months

Monday 9th December 2019
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In my opinion, the best time to sell the team is now. Allows new owners to get their foot in the door while still a high likelihood of a successful campaign next year and with the best driver on the grid/all time contracted.

La-spoon

22 posts

22 months

Monday 9th December 2019
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The more i think about this the more i think its likely 2020 is their final year. Go out on a high. Throw everything at securing the 7th which will create a legacy for a long time. They can dine out on that while the formula e gets up to speed. I think they could then enter into a more of a partnership with McLaren like before. It wouldn't surprise me to see more of Merc staff to move over, design team etc and possibly Lewis to go back and complete his career where he started and staying with merc to a certain degree.
The only issue it what happens with the merc team amd if it is to be sold off who has the capital to buy it and they would want a lot of investment in the format. Would merc leave like honda so it could be sold?

TheDeuce

4,707 posts

18 months

Monday 9th December 2019
quotequote all
La-spoon said:
The more i think about this the more i think its likely 2020 is their final year. Go out on a high. Throw everything at securing the 7th which will create a legacy for a long time. They can dine out on that while the formula e gets up to speed. I think they could then enter into a more of a partnership with McLaren like before. It wouldn't surprise me to see more of Merc staff to move over, design team etc and possibly Lewis to go back and complete his career where he started and staying with merc to a certain degree.
The only issue it what happens with the merc team amd if it is to be sold off who has the capital to buy it and they would want a lot of investment in the format. Would merc leave like honda so it could be sold?
I think the headline purchase amount needn't be that great for the team. I doubt Mercedes AG see their F1 team as an asset so much as a tool to get the marketing return they're looking for. Once they're done with it... It's just a well staffed factory for sale. And as you allude, if a sale is to occur, probably a fair few key team members will at the same time jump to other teams (McLaren..) so it won't be as if they're selling a 'ready to win' team as such.

I love the idea of Lewis ending up back at McLaren too! For sure, out of sheer common sense he has to consider Ferrari and even Red Bull I guess. But he's 100% McLaren fan from day one, he's said as much whilst wearing Mercedes outfits! 100% McLaren fans don't generally end up driving for the red team...


TheDeuce

4,707 posts

18 months

Monday 9th December 2019
quotequote all
The Moose said:
In my opinion, the best time to sell the team is now. Allows new owners to get their foot in the door while still a high likelihood of a successful campaign next year and with the best driver on the grid/all time contracted.
That kinda suggests Mercedes would time the sale based on when the team is most valuable. I don't think they're looking to make money from the sale though - the opportunity to cement the longest winning streak in the history of the sport next year is surely more valuable overall.

Or if you mean they're already looking for potential buyers for a pre 2021 sale after next season.. I would think that there is a good chance they are. I can't believe anyone would tie up about £1bn spending commitment in such a purchase withou having the best part of a year for due diligence and their own strategists mapping out the potential return on such an investment. To sell at the end of 2020 season, there would already need to be at least informal discussions going on.

The Moose

19,348 posts

161 months

Monday 9th December 2019
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At the end of the day, F1 and the teams are businesses.

jsf

15,586 posts

188 months

Monday 9th December 2019
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PGN said:
I reckon Mercedes will leave F1 at the end of 2020.
No chance.

Graveworm

3,912 posts

23 months

Tuesday 10th December 2019
quotequote all
PGN said:
I reckon Mercedes will leave F1 at the end of 2020 but continue in the sport as an engine supplier.


By remaining in the sport as an engine supplier to McLaren they are partnered with a major team so a good showcase for the engine side. Engine development costs will be relatively small compared to developing a whole car and supplying engines to three teams will recoup much of those costs anyway.
The one thing they have said, for sure, is that, if they leave as a constructor, they will no longer supply engines to the customer teams.

TheDeuce

4,707 posts

18 months

Tuesday 10th December 2019
quotequote all
jsf said:
PGN said:
I reckon Mercedes will leave F1 at the end of 2020.
No chance.
Noted, and on record for that wink

Also, it's a 'forum' You're welcome and fully entitled to bring an opinion but it's simple good manners to also give a basis for such opinion.. I'm sure many of us are very interested to understand why Mercedes leaving at the height of their achievement is so unlikely that there is 'no chance' of it happening.

TheDeuce

4,707 posts

18 months

Tuesday 10th December 2019
quotequote all
Graveworm said:
PGN said:
I reckon Mercedes will leave F1 at the end of 2020 but continue in the sport as an engine supplier.


By remaining in the sport as an engine supplier to McLaren they are partnered with a major team so a good showcase for the engine side. Engine development costs will be relatively small compared to developing a whole car and supplying engines to three teams will recoup much of those costs anyway.
The one thing they have said, for sure, is that, if they leave as a constructor, they will no longer supply engines to the customer teams.
The fact they have said that... The fact they have chosen to say that when they need not have said anything...

It's either completely true or completely engineered and not true at all. It depends who they're really talking to when they make such a statement I suppose..

Exige77

4,926 posts

143 months

Tuesday 10th December 2019
quotequote all
The cost of F1 to Mercedes is very small. After prize money and sponsorship I heard it costs them around $30/40M per season which is not huge for the exposure the brand gets.

I think it will be another 10 years before EVs become mainstream so it’s well worth continuing for one more set of rules.

After that, I can’t see any of the car companies continuing and budgets will become tiny,

HustleRussell

17,434 posts

112 months

Tuesday 10th December 2019
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I speculated about all of this when Mclaren to Mercedes was rumoured, I think I’ve cooled off on it now. It may be hopeful thinking from me but I have seen no credible buyer for Brackley rumoured and there is no way it’s simply going to shut up shop.

The end of 2020 is only a year away to state the bleedin’ obvious.

The regs change isn’t much of a thing because any team is going to need to have work in progress for the following year otherwise where is the value in the team?

Work on the 2021 car will have begun to some degree in 2018 or even earlier.

Wolff and Hamilton are probably nearing the end of their Mercedes stints and maybe it is even the case that Mercedes would sell but I simply don’t see any probability in such a short timeframe.

Megaflow

6,926 posts

177 months

Tuesday 10th December 2019
quotequote all
Exige77 said:
The cost of F1 to Mercedes is very small. After prize money and sponsorship I heard it costs them around $30/40M per season which is not huge for the exposure the brand gets.

I think it will be another 10 years before EVs become mainstream so it’s well worth continuing for one more set of rules.

After that, I can’t see any of the car companies continuing and budgets will become tiny,
Correct. One of the websites downloaded the accounts from companies house and did the analysis. The actual cash from German is 30-40m, I cant remember if it was GBP, USD or EUR. Which when factored against the world wide exposure it gets, must be consider bargain of the century.

Now factor in a cost cap in 2021, if the team management are sensible, that’s a very small if, they net cost to Mercedes could be nothing.

DaveTheRave87

1,637 posts

41 months

Tuesday 10th December 2019
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I can see a possibility of them selling the team at Brackley but keeping the engine stuff at Brixworth going.

They'll be supplying McLaren in 2021. An ever improving chassis, Lando Norris with another year's experience under his belt and Carlos Saintz hitting the prime of his career. That could be the team to beat in 2021.

rdjohn

4,084 posts

147 months

Tuesday 10th December 2019
quotequote all
jsf said:
PGN said:
I reckon Mercedes will leave F1 at the end of 2020.
No chance.
It’s costing Mercedes $40million a year and that is unlikely to increase with the cost cap. The advertising alone makes it a bargain, but the infinite global schmoozing opportunities are probably worth even more.

EVs may be the long term future, but there is still a long way to go with ICEs and Hybrids.

TheDeuce

4,707 posts

18 months

Tuesday 10th December 2019
quotequote all
Exige77 said:
The cost of F1 to Mercedes is very small. After prize money and sponsorship I heard it costs them around $30/40M per season which is not huge for the exposure the brand gets.

I think it will be another 10 years before EVs become mainstream so it’s well worth continuing for one more set of rules.

After that, I can’t see any of the car companies continuing and budgets will become tiny,
It costs Mercedes so little because they're winning and because of Lewis Hamilton. Lose those and the whole show starts to cost a lot more for lesser effect marketing-wise. However, as I said in my first post - we don't know at what point Mercedes draw the line for cost Vs ROI on marketing and it is possible they would continue even if there was a decline in value. It could still be worth it for them.

As for the shift to EVs becoming mainstream, that's held up by the same technology that once improved would overnight make EV suitable for F1. However that transition might occur taking into account FE and F1. Motorsport doesn't stop just because ICE are phased out and ICE is not a fundamental part of F1, it's simply been the only practical option up to now and for the next several years.

cholo

999 posts

187 months

Tuesday 10th December 2019
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Personally i would be suprised if they leave after 2020.

Yes, they have had such a good run of success, but surely Mercedes themselves couldn't have predicted that ithey would have been as successful as they have?

They probably know that winning is never guaranteed and the rule changes will mix things up, but surely they stand as good a chance as anybody in 2021??

Yes, there are some big changes to the aero in 2021, but with the engines remaining the same, surely this is a big factor (in their favour) in deciding whether they will stay.

Originally, F1 were planning a 'revolution' for the rule change in 2021, but is what we have ended up with really that much more of a big change than what we had in 2017, and look how well merc did then?

Edited by cholo on Tuesday 10th December 13:04

RemarkLima

804 posts

164 months

Tuesday 10th December 2019
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I'm another for saying they'll stay in for a number of years more. The transformation of Mercedes being the vehicle of choice for the Dictator, or the ol' geezer with it in champagne is a thing of the past. The plastic AMG bodykit and badges sold onto A and C classes alone would pay for the F1 teams several times over I'd reckon!

So even without Wolff and Hamilton, their cost would go up but even if it's doubled to 80M that's absolute chicken feed for a company that size.

Also, from a sporting point of view, I'd imagine they'd want to prove they can do it over different eras - it's not just a technical fluke, but actual acumen.

farm

2 posts

4 months

Tuesday 10th December 2019
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Has anyone thought what F1 would be like in 5/10/12 years when we haven't all drowned in an overheated world and still have enough oil left to run V8 or 10s and all the EV's are looking a bit silly

Edited by farm on Tuesday 10th December 14:51