Why Mercedes Will Leave F1 Before 2021
Discussion
WickerBill said:
Why would Mercedes leave if thy can make the sport virtually cost neutral?
Remember reading somewhere when taking into account car sales, advertising, exposure from hamilton etc etc it only costs them about £40 million to go racing each year, with the new cost cap in place Mercedes could be going racing for ‘free’
What I do see happening is Mercedes separating out the Mercedes name and running it as the performance arm under AMG rather like what DS have done with Citroen in FE and Alpine in F1.
It keeps the eco mentalists happy and the branding ‘clean’ but also gives advertisement for the performance arm to petrol heads
I'd be interested how the £40m comes about. Total costs are around £300m pa. £40 seems like a figure someone would put in front of the board to prove how effective he or she's been. It does have the feel of smoke and mirrors about it. Remember reading somewhere when taking into account car sales, advertising, exposure from hamilton etc etc it only costs them about £40 million to go racing each year, with the new cost cap in place Mercedes could be going racing for ‘free’
What I do see happening is Mercedes separating out the Mercedes name and running it as the performance arm under AMG rather like what DS have done with Citroen in FE and Alpine in F1.
It keeps the eco mentalists happy and the branding ‘clean’ but also gives advertisement for the performance arm to petrol heads
Merc are, it is suggested by commentators, in F1 for brand management purposes. That requires them to win, and win convincingly. The lower cost of competing is, if anything, a reason for them to leave. Their most significant advantage is their overwhelming superiority in funding. If they feel it is useful to keep a toehold in the sport, then engine supply might be enough.
Their recent run of WDCs and WCCs is how they are going to be judged. If they struggle to beat midfielders, they will be seen as going off the boil, and it might well hurt the brand.
Merc's battle with RB today was thrilling to see. It was brilliant, and will get considerable air time. But it suggests Merc is beatable; sort of negative advertising. It's like Rolls Royce admitting that their cars are not as reliable as Toyotas (I have no figures, just a suggestion). It harms the image. What viewers will see is a drinks manufacturer having a car that was catching the Merc hand over fist at the end, and only didn't win because of some technical issue.
One thing I do know about is advertising. That's got to hurt.
HardtopManual said:
Mercedes makes a profit from their F1 activities.
That's without considering the global advertising that they get by taking part.
That's without considering the effect on new car sales that winning 8 consecutive WCCs brings.
Why would they leave?
They really don't make any tangible profit from F1. Until last year they were pumping tens of millions into the team each year. They should be cash neutral now, especially with the cost cap coming in, but they only own 33% of the team now, so any potential profit will be split three ways with the other shareholders.That's without considering the global advertising that they get by taking part.
That's without considering the effect on new car sales that winning 8 consecutive WCCs brings.
Why would they leave?
thegreenhell said:
HardtopManual said:
Mercedes makes a profit from their F1 activities.
That's without considering the global advertising that they get by taking part.
That's without considering the effect on new car sales that winning 8 consecutive WCCs brings.
Why would they leave?
They really don't make any tangible profit from F1. Until last year they were pumping tens of millions into the team each year. They should be cash neutral now, especially with the cost cap coming in, but they only own 33% of the team now, so any potential profit will be split three ways with the other shareholders.That's without considering the global advertising that they get by taking part.
That's without considering the effect on new car sales that winning 8 consecutive WCCs brings.
Why would they leave?
I think the question that first has to be answered is what direction F1 is to take - the wants and imagery of large car manufacturers has changed, once they were sold as fast, exciting and menacing - perfect compatibility for what a sports/entertainment series needs which is escapism from the humdrum normality for its fans. Now cars are marketed as safe and responsible and kind to the environment, all admirable of course but utterly irrelevant, their participation today is based on proving some kind of technological standing with this constant waffle about the power units being "relevant". But they're not, any more than carbon brakes or 5G cornering or tyres that wear out in 50 miles are, so we need basically for the tail to stop wagging the dog.
jsf said:
Derek Smith said:
jsf said:
In a downturn the companies that heavily invest in product and advertising always win.
Mercedes are going nowhere.
Tell that to Proctor & Gamble, one of the biggest companies in advertising in the world. Mercedes are going nowhere.
Derek Smith said:
Both P&G and Merc make the same thing; profits. They have no other product, no other function.
Your answers make no sense.As i said, companies that invest in the bad times and continue to advertise always come out the other side in better shape than those that don't.
Mercedes are going nowhere.
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