Tuesday July 7, 01:20 PM
Toyota to stop hosting Japanese Grand Prix
By Kimiko de Freytas-Tamura
TOKYO (AFP) - The global economic crisis dealt a fresh blow to Formula One racing on Tuesday as Toyota Motor (Frankfurt: 853510 - news) pulled out of hosting the Japanese Grand Prix at its Fuji Speedway circuit from next year.
The race track, in the foothills of Mount Fuji, hosted the Japanese Grand Prix for the first time in 30 years in 2007, and again in 2008. It had been slated to host the 2010 race as the 16th leg of the 18-race Formula One series.
But the economic downturn made it "extremely difficult" to continue to stage the event, said Hiroaki Kato, president of Toyota-owned Fuji International Speedway Co., which operates the circuit.
"I apologise deeply for being unable to live up to expectations. It is truly heartbreaking," he told reporters, bowing before the cameras at the company's headquarters in Tokyo.
From 2009, the Japanese Grand Prix had been due to alternate between Fuji Speedway and Honda's Suzuka Circuit, which staged the race for 20 straight years until 2006.
Honda said it was undecided where the 2010 race would now be held.
Fuji Speedway opened in 1965. It staged F1 races in 1976 and in 1977, when a spectator and steward died after a Ferrari driven by Gilles Villeneuve ploughed into the crowd.
Kato said the economic downturn was causing a dramatic fall in the number of people attending motor sports events as the world's second-largest economy struggles through its worst recession since World War II.
"We are afraid that unless we circuit operators and promoters grit our teeth and support domestic motorsports, it will not be able to keep on going," he said.
Fuji Speedway is also facing growing competition from circuits in other countries, such as South Korea, that have offered to host a grand prix.
"If the business environment improves we would like to challenge ourselves to resume" hosting the event, said Kato. "But I don't think it will be that easy."
Toyota's decision to pull out as host comes as the global economic crisis forces Japanese automakers to slash costs.
Honda has sold its Formula One team while Suzuki (Munich: 603090 - news) and Subaru have withdrawn from the world rally championship. Motorcycle maker Kawasaki has exited the MotoGP (Milan: DMH.MI - news) and Mitsubishi (MBC.IL - news) is quitting the Dakar Rally despite a dozen victories.
Toyota overtook US rival General Motors (NYSE: GM - news) in 2008 as the world's top selling automaker but it fell into the red for the first time in the year to March with a net loss of 436.9 billion yen (4.6 billion dollars).
It expects a bigger net loss of 550 billion yen this year.
The F1 move reflects Toyota's strategy to concentrate on profitable businesses, said Shigeru Matsumura, an auto industry analyst at SMBC Friend Securities.
"The cost of hosting F1 races is not significant enough to affect its business seriously but Toyota is now reviewing (its operations) without exception amid the industry's unprecedented slump."
Local media said it costs two to three billion yen, or about 20 to 30 million dollars, to host an F1 race.
Matsumura said it would be no big surprise if Toyota was considering withdrawing its team from F1 racing, although the automaker has given no indication that such a move may be on the cards.
Toyota Racing, Japan's last remaining Formula One team, warned in March of drastic budget cuts. The team has not won a grand prix since its 2002 debut.
Formula One has seen weeks of bitter rows on proposed tough spending limits, although an agreement was reached last month to avert a threatened breakaway by some teams to form a new championship.
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