TOKYO - Honda has pulled out of Formula One, the Japanese automaker citing a slowdown in the global economy and a need to focus on its core business as reasons.
"We have come to the conclusion that we will withdraw from all Formula One activities, making 2008 the last season of participation," Honda CEO Takeo Fukui told a news conference Friday. "This difficult decision was made in light of the quickly deteriorating operating environment facing the global auto industry brought on by the sub-prime problem in the United States, the deepening credit crises and the sudden contraction of the world economies."
He said the company would be willing to sell the team.
"We will enter into consultation with the associates of the Honda racing team and its engine supplier Honda Racing Development regarding the future of the two companies. This will include offering the team for sale."
The withdrawal of one of the world's biggest car manufacturers will send shock waves through F1, which could start the season with only 18 cars on the grid. Japanese team Super Aguri, which was backed by Honda, pulled out of F1 earlier in the 2008 season.
The 2009 season opens March 29 at the Australian Grand Prix.
Team chiefs Ross Brawn and Nick Fry informed the near 700 staff late Thursday in England. Fukui apologized to the team and Honda's fans at Friday's news conference.
"The team had done a superb job of getting ready for the 2009 season and I offer my sincere apologies to everyone involved," said Fukui. "I also apologize to our loyal fans who have supported us so well over the years in F1."
On Thursday, Honda Motor Co. announced it is cutting jobs in Britain and Japan because of plunging vehicle demand. It has already reduced its annual production of consumer cars by more than 140,000 worldwide.
Honda is also cutting 760 temporary workers at four plants, including one motorcycle plant, or nearly 18 per cent of its Japan temporary work force of 4,300, this month and next month in response to nose-diving demand in the U.S. and other key markets, said company spokesman Hideto Maehara.
Speculation of the announcement started late Thursday in England, where the F1 team is based. On Friday, even Japanese politicians were expressing regret over the decision.
"It is unfortunate," said Chief Cabinet Secretary Takeo Kawamura. "I understand it was the decision from a point of corporate management. But I hope Honda will resume (F1) after overcoming (the economic crisis.)"
"It really shows that the auto industry, which has been leading the Japanese economy, is facing severe economic conditions," added Economy, Trade and Industry Minster Toshihiro Nikai.
The Honda team, with an operational budget of around US$294 million, finished next-to-last in ninth place in the constructors' standings last season with Jenson Button 18th out of 20 drivers with three points. Rubens Barichello, who was awaiting word on whether or not he would return with the team in 2009, was 14th with the remaining points.
Friday's announcement leaves Button without a team for 2009. Brazilian Bruno Senna, the 25-year-old nephew of the late triple world champion Ayrton Senna, had been tipped to take the place of compatriot Barrichello at Honda.
Honda, which originally entered F1 as a constructor for a stint in the 1960s before returning as an engine supplier in the 1980s, bought out BAR Racing in 2005.
Former F1 champion Jacques Villeneuve says Honda's decision to pull out is more a political decision than a financial one.
"I don't think F1 is one of Honda's biggest expenses," Villeneuve tells autosport.com. "But with the world economic climate as it is you have to be perceived to be making cuts.. I think it's more of a political decision."
Villeneuve drove for the Honda team when it was known as BAR-Honda from 1999 to 2003.
FIA president Max Mosley had described F1's combined $1.6-billion spending in 2008 as "unsustainable," saying the teams were relying too heavily on the goodwill of rich individuals and corporate sponsors. Mosley has vowed to push through cost-cutting measures by 2010 to make the sport more affordable for teams.
The auto racing world governing body has already reached a deal with F1 to cap the cost of engines supplied to smaller teams.
Over recent months, the 10 teams had met regularly with F1 boss Bernie Ecclestone to discuss reducing costs, including streamlining engines.
Honda's announcement could also prompt fears that other major manufacturers could follow Honda's example.
Toyota Motor Corp., Honda's main rival in Japan, has also announced staff cutbacks. The Toyota F1 team finished 5th in the season standings.