GP Racing - UK (2020-04)

GP RACING APRIL 2020 43

was afoot, with Haug departing, Niki Lauda arriving and

Wolff reversing out of Williams to join Mercedes. Hardened

entrepreneurs, Wolff and Lauda took on a 40% ownership

of the team in a 30/10 split, and in their roles as executive

director and non-executive chairman they set about giving

Mercedes-Benz robust sporting and businessoutcomes.

Consider that in 2012, Haug’s final year, Mercedes’

Formula 1 team saw £114million come in and £145million

go out. As anyeconomics studentwill tell youthat’s not

good; losses of £31.5million tend to raise eyebrows.

By the end of 2018 Wolff and Lauda had tripled income

to £338million, achieving a pre-taxprofit of £15.4million.

Daimler was contributing

around 15% ofthe team’s

budget, while the share of F1’s

prize monies stood at a chunky

£130million.

The success of the team’s

sponsorship department

under commercial director

Richard Sanders is crucial.

This year the cars, drivers and

team will display the brands

of 14 partners, with eight

suppliers providing additional

support.

The Petronas title

sponsorship has a decade

under its belt while the

addition of the chemicals

giant Ineos as ‘Principal Sponsor’ in 2020 develops a

previously announced partnership whereby the F1 team

has aided Ineos’s cycling and sailing teams. Owned by Sir

Jim Ratcliffe, often described as Britain’s richest man with

a fortune estimated at £20billion, Ineos brings with it a

significant tranche of funding.

This five-year deal is a significant coup, and perhaps

not just for reasons of sponsorship. Ratcliffe is soon to

enter the automotive world with the Grenadier, initially a

BMW-powered competitor to the Land Rover Defender.

Powertrain technology may well become a discussion point

during the term of the F1 deal.

Which brings usto the Mercedes-AMG High Performance

Powertrain division in Brixworth, the wholly owned

subsidiary of Daimler responsible for the hybrid F1 engine,

alongside supplying the powertrain to both the Formula E

entry and the Mercedes-AMG One hypercar.

Run by AndyCowell, HPP is pivotal in terms of the

potential for technology transfer from Formula 1 and

Formula E back into the mainstream Daimler business, and

there can seldom have been a more opportune time to have

an R&D facility of this kind. The speed of development and

use of digital, connected technologies in motorsport is more

relevant than ever to the car industry.

On 3 March, Mercedes-Benz made a key announcement

about its sustainability strategy in motorsport, including the

news thatthe F 1 team aimed to achieve a net-zero carbon

footprint this year. The Formula 1 and Formula E projects

The sponsorship

tie-up with Ineos is

the development of a

previous partnership

will also support Daimler’s strategy of

ensuring that50% of its car sales are from

hybrid and fully electric vehicles by 2030.

That alone is an indication ofMercedes’

long term commitment to F1, but page

four of the press statement mentioned the

other important form of sustainability –

financial.The forthcoming $175million F1

budget capwill further reduce the team’s

need for parental support. Meanwhile,

the creationof Mer cedes-Benz Applied

Science promises the kind ofprofitable

businessdivers ification already witnessed

at McLaren Applied Technologies and

Williams Advanced Engineering.

Simply put, off the back of its F1

success the Mercedes team is closer than ever to achieving

nirvana for its Daimlerparen t – an entirely self-funding,

entrepreneurially successful business which adds

value through its own technological, commercial and

financial success.

Although separate businesses, the Brackley and

Brixworth companies had, by the end of 2018, combined

revenues just shy of £534million, profits before taxof

£23.5million and around 1700 employees. These are truly

meaty numbersfrom a strong business built entirely around

the success that Mercedes-Benz has achieved in Formula 1.

Suddenly we have a manufacturer showing how it can be

done, on and off the track.

CONSIDER THAT IN

2012, HAUG’S FINAL

YEAR, MERCEDES’

FORMULA 1 TEAM

SAW£114MILLION

COME INAND

£145MILLION GO

OUT.BY THE END

OF 2018WOLFF

AND LAUDA HAD

TRIPLED INCOME

TO £338MILLION

A successful

sponsorship

department means

that Mercedes’ cars

and drivers have 14

brands adorning

them in 2020

was afoot, with Haug departing, Niki Lauda arriving and
Wolff reversing out of Williams to join Mercedes. Hardened
entrepreneurs, Wolff and Lauda took on a 40% ownership
of the team in a 30/10 split, and in their roles as executive
director and non-executive chairman they set about giving
Mercedes-Benz robust sporting and businessoutcomes.
Consider that in 2012, Haug’s final year, Mercedes’
Formula 1 team saw £114million come in and £145million
go out. As anyeconomics studentwill tell youthat’s not
good; losses of £31.5million tend to raise eyebrows.
By the end of 2018 Wolff and Lauda had tripled income
to £338million, achieving a pre-taxprofit of £15.4million.
Daimler was contributing
around 15% ofthe team’s
budget, while the share of F1’s
prize monies stood at a chunky
£130million.
The success of the team’s
sponsorship department
under commercial director
Richard Sanders is crucial.
This year the cars, drivers and
team will display the brands
of 14 partners, with eight
suppliers providing additional
support.
The Petronas title
sponsorship has a decade
under its belt while the
addition of the chemicals
giant Ineos as ‘Principal Sponsor’ in 2020 develops a
previously announced partnership whereby the F1 team
has aided Ineos’s cycling and sailing teams. Owned by Sir
Jim Ratcliffe, often described as Britain’s richest man with
a fortune estimated at £20billion, Ineos brings with it a
significant tranche of funding.
This five-year deal is a significant coup, and perhaps
not just for reasons of sponsorship. Ratcliffe is soon to
enter the automotive world with the Grenadier, initially a
BMW-powered competitor to the Land Rover Defender.
Powertrain technology may well become a discussion point
during the term of the F1 deal.
Which brings usto the Mercedes-AMG High Performance
Powertrain division in Brixworth, the wholly owned
subsidiary of Daimler responsible for the hybrid F1 engine,
alongside supplying the powertrain to both the Formula E
entry and the Mercedes-AMG One hypercar.
Run by AndyCowell, HPP is pivotal in terms of the
potential for technology transfer from Formula 1 and
Formula E back into the mainstream Daimler business, and
there can seldom have been a more opportune time to have
an R&D facility of this kind. The speed of development and
use of digital, connected technologies in motorsport is more
relevant than ever to the car industry.
On 3 March, Mercedes-Benz made a key announcement
about its sustainability strategy in motorsport, including the
news thatthe F 1 team aimed to achieve a net-zero carbon
footprint this year. The Formula 1 and Formula E projects

The sponsorship

tie-up with Ineos is

the development of a

previous partnership

will also support Daimler’s strategy of

ensuring that50% of its car sales are from

hybrid and fully electric vehicles by 2030.

That alone is an indication ofMercedes’

long term commitment to F1, but page

four of the press statement mentioned the

other important form of sustainability –

financial.The forthcoming $175million F1

budget capwill further reduce the team’s

need for parental support. Meanwhile,

the creationof Mer cedes-Benz Applied

Science promises the kind ofprofitable

businessdivers ification already witnessed

at McLaren Applied Technologies and

Williams Advanced Engineering.

Simply put, off the back of its F1

success the Mercedes team is closer than ever to achieving

nirvana for its Daimlerparen t – an entirely self-funding,

entrepreneurially successful business which adds

value through its own technological, commercial and

financial success.

Although separate businesses, the Brackley and

Brixworth companies had, by the end of 2018, combined

revenues just shy of £534million, profits before taxof

£23.5million and around 1700 employees. These are truly

meaty numbersfrom a strong business built entirely around

the success that Mercedes-Benz has achieved in Formula 1.

Suddenly we have a manufacturer showing how it can be

done, on and off the track.

CONSIDER THAT IN

2012, HAUG’S FINAL

YEAR, MERCEDES’

FORMULA 1 TEAM

SAW£114MILLION

COME INAND

£145MILLION GO

OUT.BY THE END

OF 2018WOLFF

AND LAUDA HAD

TRIPLED INCOME

TO £338MILLION

A successful

sponsorship

department means

that Mercedes’ cars

and drivers have 14

brands adorning

them in 2020