Financial crunch forces Honda quit F1

TOKYO: Honda on Friday announced its shock withdrawal from Formula One over the global financial crisis, ending an involvement which began in the 1960s and raising fresh fears over the sport''s future.

Honda Motor president Takeo Fukui made the announcement at an emotional press conference, apologising to fans, staff, drivers and F1 authorities.

He said 2008 would be Honda''s last season. The Japanese carmaker will not supply its engines to any other teams.

"This is a complete withdrawal. The future is a blank sheet," he said. "Five years from now, I think history will show we made the right decision.

"This difficult decision has been made in light of the quickly deteriorating operating environment facing the global auto industry, brought on by the subprime problem in the United States," Fukui added.

Japan''s number two automaker will hold consultations with the team''s staff and drivers about their future, including a possible sale.

Honda Racing CEO Nick Fry , however, said he was hopeful that new owners would be found in time for the team to be on the grid for the start of next season in Australia on March 29.

"In the last 12 hours we''ve had three serious people come to us and suggest they would like to buy the team, so we''re still hoping to be there in Melbourne," Fry told BBC Radio 5 Live.

Drivers Jenson Button and Rubens Barrichello were out of contract at the end of the season, but Honda had been expected to retain them both for 2009.

However, Friday''s announcement means they are without a team which could spell the end of the road for Barrichello, the most experienced driver in Formula One history having raced in 271 Grand Prix, winning nine.

The Brazilian, who made his debut at the 1993 South African Grand Prix, is the only driver left in F1 to have raced against the likes of Ayrton Senna and Alain Prost, making him the last remaining link to that era.

Honda first competed in F1 in 1964 and has since clocked up three Grand Prix wins as a full works team, including Button''s in Hungary in 2006.

Its engines have also been behind dozens of victories by stars such as Senna and Prost.

The team finished ninth in the constructors championship this season with 14 points. Barrichello achieved the team''s best result with a third-place finish at Silverstone.

F1 is generally feeling the pinch with this year''s Australian Grand Prix going 27 million dollars into the red and France axing its race over money worries.

Formula One supremo Bernie Ecclestone, asked whether F1 was in crisis, replied: "Formula One is in no bigger a crisis than any other company throughout the world -- the world is in crisis at the moment.

"But the world won''t stop, that''s for sure."

Max Mosley , the head of motorsport''s world governing body, the FIA, said he would push on with planned cost-cutting measures.

"The announcement of Honda''s intended withdrawal from Formula One has confirmed the FIA''s long-standing concern that the cost of competing in the world championship is unsustainable," a FIA statement said.

"In the FIA''s view, the global economic downturn has only exacerbated an already critical situation."

It is not the first time Honda has quit F1. It withdrew in 1968 to focus on developing compact passenger vehicles.

The Japanese firm returned to the F1 stage as an engine supplier from 1983 until 1992, when race regulation changes and a ban on the use of turbo systems prompted Honda to withdraw again from the competition.

In 2000, Honda made yet another comeback by partnering with BAR, supplying engines and jointly developing the vehicle body. The company took full control of the team from the 2006 season.

Honda, like other Japanese automakers, is reducing production and cutting hundreds of jobs in response to slumping car sales.

"Honda must protect its core business activities and secure the long term as widespread uncertainties in the economies around the globe continue to mount. A recovery is expected to take some time," Fukui said.