An Auto Union
Why Audi doesn't need F1, but F1 needs Volkswagen.
There are 2 reasons why manufacturers may wish get involved in motorsport;
1 - Improving the breed - showcasing & proving technology on the track and then bringing it back to the road.
2 - Marketing - expodure and instilling asperation.
Ultimately the point is to SELL MORE CARS.
Next there are 2 factors that determine the category of motorsport a brand will consider entering;
3 - Brand relevance - simply put does it make sense.
4 - Bang for Buck - if we accept this is a marketing exercise then the board will want to see a return of investment in terms of marketing activation.
Finally there are 2 types of program to pursue;
5 - Factory Program - I define a 'Factory' program as one that the manufacture is putting money into. This may be in a top line or prestigious class/category. Or it may be a one make series promoting a single brand. Here you completely control the marketing message and are able to enter categories that customers would find finically prohibitive.
6 - Cutomer Program - I define a 'Customer' program as one it is taking money out of. You build a product and sell it to customers around the world to race in multiple series. You service the cars and proved spare parts, for a fee. GT3 is the stand out example of this. The advantage here is in numbers, if not exposure.
So the questions here are;
A - Will VAG enter Formula 1?
B - If so, with which brand?
C - If so, as an engine supplier to an existing team, or as an outright manufacture?
First, have a look at what motorsport programs are currently operational within the group and rank the expenditure;
AUDI AG/Quattro GMBH
Spend = HIGH
Factory
WEC - Audi Sport Team Joest (R18 e-tron quattro)
DTM - 8 cars over 3 teams (RS5 DTM)
Formula E - Supporting Abt Sport line. Expected to provide power unit from next year onwards.
TT Cup - One make series supporting DTM. (TT)
Customer
GT3 - Audi Customer Racing (R8 LMS Ultra)
Automobili Lamborghini S.p.A.
Spend = LOW
Factory
Super Trofeo - One make series supporting Blancpain GT Series. (Huracán LP620-2 Super Trofeo)
Customer
GT3 - (Lamborghini Gallardo GT3 FL II) Huracán based replacement pending approval.
Bentley Motors Ltd
Spend = MODERATE
Factory
GT3/LM GTE - Make no mistake, despite the rules, this IS a factory program, and the Conti GT3 is pushing the limits of the definition of the class. They clearly want to go to Le Mans, but it seems like that are going to have to justify the budget by selling a reasonable number of GT3 cars to customers, before converting to LM GTE. Convergence talks also a factor here.
Customer
GT3 - The first customer cars are heading to the US for use in the PWC later this year.
Bugatti Automobiles S.A.S.
Spend = LOW
Factory
n/a
Customer
n/a
Porsche AG
Spend = HIGH
Factory
LM P1 - Porsche Motorsport (919 Hybrid)
LM GTE - Porsche Team Manthey (911 RSR)
Super Cup - Single make series supporting Formula 1.
Customer
LM GTE - A struggling program do to old machinery, and stubbornness. A Cayman 981 RSR is desperately needed by the customers, but not the marketing department.
GT3 - See above.
Carrera Cup - Various national one make series (991 GT3 Cup)
SEAT, S.A.
Spend = MODERATE
Factory
Leon Eurocup - Single make series. (Leon Cup Racer)
Customer
Endurance - An endurance version of the Leon Cup Racer is due by the end of the year.
Touring Cars - SEAT Ibiza SC Trophy
Rallying - Group N Leon
Škoda automobilová a.s.
Spend = LOW
Factory
Rallying - European Rally Championship (Fabia R5)
Customer
Rallying - WRC2 (Fabia R5/S2000)
Suzuki Motor Corporation
Spend = LOW
Factory
n/a
Customer
n/a
Volkswagen AG
Spend = LOW
Factory
Rallying - Volkswagen Motosport (Polo R)
Customer
F3 - Engine supply
So, AUDI & Porche are already supporting a large number of programs utilising large budgets, and would need to cut probably more than one program to accommodate an F1 program. It should be noted that whilst they are covering very similar ground in terms of the classes and programs they run, there customer bases are quite different. As is their marketing activation. AUDI favour promoting technological innovation that trickles down to their road cars (FSI,TDI,ultra, Quattro, e-tron, Laserlight) , whilst Porsche focus on product and brand heritage.
VAG is made up of 9 main brands, and they can be split into 3 perceived groups;
Aspirational/Status
Automobili Lamborghini S.p.A.
Bentley Motors Ltd
Porsche AG
Quattro GMBH
Attainable/Quallity
AUDI AG
Volkswagen AG
Utility/Commodity
SEAT, S.A.
Škoda automobilová a.s.
Suzuki Motor Corporation
No Asperational marque has successfully entered F1. (I discount Ferrari and McLaren, as they were involved in the category before they were aspirational.) Lets look back at those two main reason for entering a category;
1 - F1 today has zero road or road car relevance.
2 - F1 today has unprecedented levels of exposure (in fact so much so it is damaging to other forms of motorsport, but thats another discussion).
Asperational brands have no need to enter a category to meet point 2. You already want a Lamborghini or a Porsche, marketing for marking's sake is unnecessary. How many adverts do you see for those brands (outside the specialist press)?
I'm going to cross off Lamborghini, Bentley, and Porsche as options. I'm also going to cross off Suzuki, due to only being the largest shareholder, not outright owner. That leaves 4 brands; AUDI, Volkswagen, SEAT, and Škoda.
AUDI and Volkswagen are well established international brands, much more so than SEAT and Škoda. However, SEAT and Škoda's reach and recognition is growing with makes them prime candidates for main stage brand exposure to instil aspiration in potential customers in new markets.
Lets get back to Question A: Will VAG enter Formula 1?
For F1's long term health, it need new blood in all areas, but particularly in terms of teams and engine suppliers. The Top 5 car manufacturers in 2014 were;
Toyota (10.2 million)
VAG (10.1 million)
GM (9.9 million)
Renault-Nissan (8.5 million)
Hyundai-Kia (8.0 million)
- Toyota are not coming back in this generation.
- GM simply couldn't afford it financially or in PR terms.
- Renault-Nissan's is stable despite their current woes.
- Hyundai have long been rumoured to be considering a LM P1 assault, but a F1 announcement would be out of left field.
Out of those 4/5 who are not currently involved in F1, VAG seems the most likely to be interested.
So, will VAG enter Formula 1?
Probably. Someone needs to.
Which brand?
Whilst Dr. Ullrich is head of Audi Sport, it seems unlikely to be AUDI. They don't need to be in F1, their current programs are suiting them well, from both a sporting and marketing angle. Having said that, I would like nothing more than to see an Ulrich Baretzky F1 powertrain. As Adrian Newey is to Aerodynamics, Herr Baretzky is to engines. He has always said he would like to return to a petrol engine before the end of his career, and nothing would be a sweeter swan song.
If decision came down to Volkswagen, SEAT, or Škoda, whilst the latter 2 would be interesting propositions my estimation is that that would go with the core brand, VW. It is the most straightforward proposal, and, perhaps most importantly to the board, a victory would result in the playing for the German national anthem. If they enter as a constructer that is...
As an engine supplier to an existing team, or as an outright manufacture?
If it's AUDI, then as an outright manufacturer. No question. Supply to Red Bull as a secondary customer team, most likely, but that is not what Mateschitz wants.
If it's VW, then I think that engine supply of the 4 Red Bulls is far more likely, with a 2017 F1 grid looking as follows;
Mercedes - Mercedes
Williams - Mercedes
Lotus - Mercedes
Ferrari - Ferrari
HAAS - Ferrari
Red Bull - VW
Torro Rosso - VW
Renault - Renault
?????? - Renault
McLaren - Honda
Discuss.