Amid all the furore over the Renault race fixing scandal, this week has seen another important development in shaping the next generation of F1.
I posted last week on the news that Mercedes was set to take a controlling interest in the Brawn team. It appears that the deal has been worked with the backing of the Abu Dhabi investment vehicle Aabar, which bought 9.1% of Mercedes’ parent company Daimler earlier this year. It is the company’s largest shareholder.
Aabar is an interesting company with a wide range of investments in many different sectors. They bought a 32% stake in Virgin Galactic, Sir Richard Branson’s space project recently.
According to Auto Motor und Sport’s Michael Schmidt, who is usually pretty good on these matters, the Mercedes shareholding in the Brawn team will be held by Aabar until the end of 2011, at which point clauses in Mercedes’ contract with McLaren lapse and allow them to take equity in another team.
The suggestion is, however, that from next year onwards the Brawn car will carry more significant Mercedes branding, the three pointed star on the engine cover and so on. There is also a strong suggestion that Nico Rosberg will drive there. One would expect Jenson Button to partner him, but the championship leader is being squeezed in negotiations over a new deal at the moment. With a much bigger picture in play now at Brawn, he may opt to stay with what is clearly a team of the future and settle for what’s on the table.
Brawn is known to have signed a title sponsor and two secondary sponsors for next season. There are others negotiating the remaining positions on the car and Mercedes’ involvement will attract others.
The team are keeping the details close to their chests, but I have heard a suggestion that one of the secondary sponsors may be Orange, the mobile phone giant. It seems that another of the sponsors may be a Germany company and another from the Far East. It is known that LG is interested in sponsoring a team next season, in addition to its extensive spend with Bernie Ecclestone and FOM thus far, but I have not heard any direct connection with Brawn yet.
Meanwhile Mercedes continue to own a 40% stake in McLaren. A further 30% is owned by the Bahraini investment fund. It seems that Mercedes want to own a controlling stake in a team and have decided to go with Brawn. It is well known that Mercedes have at various times wanted to own a controlling interest in McLaren but have not been able to.
It is not clear what Mercedes would do with its 40% stake, once it take up its Brawn position, but there is no doubt that their involvement and financial contribution are amongst the most valuable assets of the McLaren team, which on the other side has a huge staff and a very expensive factory to run. So where does this leave McLaren and what has motivated Mercedes to move?
Well part of it is obviously the desire to have more control over a team. Also the recent scandals over stolen Ferrari data and Liegate have taken their toll on the relationship. In neither episode were Mercedes directly involved, but suffered by association.
McLaren MP4 12 C
But one of the real keys to this move lies in the supercar market. McLaren this week unveiled its MP4 12C road car, a Gullwing door sports car, which is aimed squarely at Ferrari’s market – the £120,000- £170,000 market.
Before the credit crunch Ferrari was selling around 6,000 cars a year and all the forecasts are that this sector of the market will be buoyant again soon, making a great opportunity. McLaren’s Ron Dennis, in exile from F1, is throwing all his effort into the development of his car which will, significantly, be powered by a McLaren engine, not a Mercedes.
And here is the crunch, Mercedes is also targetting that sector, with its Gullwing SLS AMG, which was launched this week at Frankfurt Motor Show. McLaren is building a car which is in direct competition with Mercedes in a lucrative sector.
The Mercedes SLS Gullwing
McLaren and Mercedes worked together on the SLR, but Dennis has always had ambitions to be the British Ferrari. He feels that as he’s beaten them on the track he can beat them in showroom sales too. It’s a strategy which seems to have put the company on a collision course with Mercedes.
Speaking at the Frankfurt motorshow this week, where the SLS was launched, Daimler boss Dr Zetsche said,
“For a long period we had a lack of alignment on road cars (with McLaren) but we have now found a clear solution and we won’t participate,”
As for where things go with McLaren from here in terms of F1 he added,
“Ending the relationship is not an option but we may have a different relationship”.
What makes this story so poignant is that the Brawn team wouldn’t have existed without McLaren’s support at the start of the 2009 season. Mercedes were very keen to provide a lifeline to Brawn, and a very powerful and reliable engine which has been one of the cornerstones of their success, particularly in competition with Red Bull, whose Renault has lacked the power and proved a little unreliable, especially for Sebastian Vettel.
But McLaren’s CEO Martin Whitmarsh, full of the early spirit of brotherhood of FOTA, facilitated the Mercedes deal and helped the Brawn team. It all happened in the weeks leading up to that notorious FOTA press conference in Geneva.
He clearly didn’t see this coming.
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