Why Alfa Romeo should stay in F1, and why turn down a technical commitment – 2022

The Italian brand has been present in F1 as a sponsor of Sauber since 2018, and since 2019 the team has been its main sponsor. However, at its core, it is simply a sponsorship agreement that exploits the relationship with Ferrari, which supplies Sauber with a power unit and gearbox.

From an economic point of view, the current agreement represents an appropriate investment for Alfa, as it does not involve the burden of having to fund a power unit design and development program, or owning a team, and all the expenses involved.

It’s an agreement we’ve also seen in the past in the first order. Red Bull Racing itself was sponsored by Infiniti and Aston Martin, giving both brands a presence in the sport.

The Volkswagen Group wants to enter Formula 1 in a completely different way.

Porsche appears ready to fund the new Red Bull Powertrains engine and brand, while Audi plans to buy a team that will represent the brand while running a program to design its engines in Germany. In general, it will be a very expensive exercise.

Meanwhile, Alfa Romeo, which is expected to announce a decision on renewing its relationship with Sauber in July, is gaining major exposure at a more modest cost.

Carlos Tavares, chief executive of the Stellantis group that owns Alfa Romeo and a number of other brands, is not talking about how the deal will work – and dismisses any suggestion that perhaps Alfa should be more directly involved, and perhaps take the big step by buying the Swiss team.

I have a strong partnership today. it’s working. The team is called the Alfa Romeo F1 Team. And I don’t think it would be fair to criticize the fact that we have such a strong partnership. Why criticize the fact that we have a strong partnership? Why should we think there is only one way to be in F1, and that is to have a team? What interest? The benefit we want for motorsport enthusiasts is to be able to compete on the track. This is what they want to see. Overtaking, braking, tire wear management, etc. So what I respectfully challenge is the view that there is only one way to be in F1. And I would ask, then, what’s wrong with a strong partnership in a team called the Alfa Romeo F1 Team? If it works, if the team is excited, if the employees are excited about what they’re doing, if the results are getting better, if the drivers say the car is getting better, if you see that in the results, if we’re here to discuss it’s because it works. So, should we open our minds to the fact that the business models that should be in F1 are more than one, maybe two, maybe three, maybe four? I don’t know. So this is my answer. But I understand where the speculation is. But my candid and honest response from someone who has been in motorsports for more than 40 years is that in the end there can be more than one way and even more than one successful way to appear in F1.. “

Alfa Romeo’s involvement with Sauber predates the birth of Stellantis, which was formed in 2021 through the merger between Fiat Chrysler Automobiles and PSA Group.

So Alfa inherited the agreement, which may have involved a different commitment, but Tavares – a former Estoril track commissioner who is himself a driver – is convinced that F1 is the right place for the brand. He points to its presence in the United States and China, markets where the sport is growing, as one of the key factors.

For all the car companies working so hard to become the best, as Stellantis does, this is clearly a place to be.“, he added. “To show that at the top of the automotive world we can do well. Alfa Romeo has already been involved in F1, in what we consider a very positive partnership. We saw that there is a greater potential to develop the partnership, and to try to combine the two positive dynamics. The positive dynamic is the improvement in sports results, which can be seen since the beginning of this year. The second positive dynamic is the fact that we clearly saw an opportunity to profitably grow the Alfa Romeo business around the world. Alfa Romeo is one of our three premium brands. It is the only brand among these three distinct brands present in the three largest markets in the world, North America, Europe and China. So he has a special need to improve his awareness and public opinion around the world. And of course F1 is a perfect display to raise awareness of a premium global brand called Alfa Romeo. This is something that is a good foundation, and we decided that we had to work on that foundation to raise awareness of the Alfa Romeo brand around the world. The ownership of the brand is already very strong, but we can make it grow even more and, of course, bring a more profitable business to Alfa Romeo.“.

Alfa Romeo may only be a sponsor and not an owner, but Tavares is adamant that cost limits should continue to play an important role in what teams can spend. He does not want to see F1 regulated by some form of performance equilibrium one day, as is the case, for example, in other sporting competitions.

We think F1 should stay away from what I call the BoP world. Thus it must continue to operate strictly and fairly on the cost ceiling, which is the alternative to the world of balance of payments. And since we don’t want the BoP to reach F1, it’s a good idea to work on setting the budget cap. Because if we maximize the budget, we will improve the return on investment that car manufacturers can make in the sport, given the media impact we can have. And if we have a good return on investment, that’s good for the sport and it’s good for the car manufacturers. So there is a good fit of interests between a cost cap that improves return on investment for carmakers, the sustainability of the sport and the fact that it makes economic sense to be in F1. So I think it’s in the best interest of all motorsports fans like you and me to protect the fact that you can race on a reasonable budget. Because if the budget is reasonable, with the good media impact that is created, the return on investment is good. And if the return on investment is good, the automakers will come“.

Unsurprisingly, Tavares welcomes the expected presence of Audi and Porsche from 2026 – and both Alfa Romeo names would like to see them compete. But he warns that their arrival should not lead to increased expenditures.

I am very happy that we will have more OEMs in Formula 1, I think that is a good thing. As long as the presence of these OEMs does not only lead to failure of the show. And how can the show fail? Allow inflation to control supply. It’s not in our best interest, for us motorsports fans, to let inflation take over. Because after blowing, there is nonsense, and after this bullshit it explodes. And after the explosion, everything must be reconstructed. So we very sincerely welcome other OEMs, because it is a good thing. This is a sport, this is a great fight. This is the reason we are here. We love him. But it is important that it be combined with reasonable budgets that protect ROI, because ROI is the reason we are here. So if we have newcomers and they blow up the show, because they’re willing to spend money on a level that doesn’t make sense, even our employees don’t make sense, then after three years the show fails. This is the maximum welcome for newcomers and especially strong newcomers. We live the sport and love to race on the track. But the cost cap rules must be respected. You have to stick to these rules, and make sure that you are going to play by the rules. And if that’s the case, we’d welcome them, it would be cool and I’m not worried about guys with a lot of money, because talent isn’t always where the money is.“.

Tavares is confident that the sport’s chiefs are very keen on this.

We have a long history in F1, we must protect history and keep things under reasonable control. That’s why I’m not worried about newcomers. It’s all about the way the sport is run. But I think our current philosophical understanding and alignment with Stefano Domenicali is very, very strong on this subject. I think it works fine. I think he does the right things for this sport“.

As already written, we will only know in July if and for how long Alpha will extend its existing agreement.

It’s a simple arithmetic operation, as Tavares points out: “As long as there is a positive story to tell about the improved performance of the Alfa Romeo F1 Team, I have a good positive media influence, which I can put in front of my financial contribution to the team. This is how I calculate it. From this point of view, it’s a good deal“.

However, Sauber is one of the teams that tops the Audi shopping list, so there is a possibility that it will not be available as an Alfa sponsor from 2026 onwards. Tavares doesn’t seem to be concerned about that possibility

This is just a guess. In my auto sector, would you like a list of my concerns? how many days? I don’t think you have enough pages in your notebook. We’ll see…

Original article on motorsport.com

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