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McLaren retains F1 engine deal despite Mercedes exit

16 November 2009

McLaren has revealed that it is to buy back engine partner Mercedes-Benz's 40 per cent stake in the team by 2011 – but despite the impending end of the ultra-successful relationship, the Stuttgart manufacturer will continue to supply engines to the Woking-based outfit for at least the next five years.

In what the multiple world champions have described as 'a re-aligned long-term strategic alliance', a McLaren statement explains that 'the McLaren Group will undertake a phased purchase of the 40 per cent shareholding currently owned by Daimler AG...as a result, the McLaren Group will become a fully independent stand-alone corporate entity'.

The news not only confirms one of the worst-kept secrets in the F1 paddock in recent months, but will also bring down the curtain on a partnership that began back in 1995 – and has yielded over that period three drivers' world titles and one constructors' crown. However, relations had become increasingly strained over the past few years, with the infamous 'Spygate' scandal, Lewis Hamilton's Melbourne 'lies' shame and the poor early-season performance of this year's MP4-24 chassis all understood to have contributed to today's announcement.

Mercedes-Benz will conversely ramp up its relationship with new world champions Brawn GP by way of a 75 per cent purchase of the ex-Honda F1 concern [see separate story – click here], but the engine-supply deal with McLaren will continue until at least 2015 – with the possibility to extend it even further – making it the longest-standing association of its kind in grand prix history, running as long as 21 consecutive years.

'Both the McLaren Group and Daimler AG were therefore committed to securing its continuation, and to have provided mechanisms whereby the partnership may continue beyond 2015,' added the statement. 'The team will continue to be known as Vodafone McLaren-Mercedes, its distinctive silver-with-red livery will remain unchanged and Mercedes-Benz will continue as both an engine-supplier and a partner.

'The re-affirmation of the two companies' commitment to each other is the result of many weeks of careful and co-operative discussion between the McLaren Group and Daimler AG – the parent companies of, respectively, McLaren Racing and Mercedes-Benz – and covers both parties' continued involvement in the Vodafone McLaren-Mercedes Formula 1 partnership as well as a shared intention to act in the overall best interests of the sport of grand prix racing. It also reflects the independent vision of both companies with regard to their automotive production strategies.

'The McLaren Group will continue as the parent company of McLaren Racing (and Vodafone McLaren-Mercedes), McLaren Marketing, McLaren Electronic Systems, McLaren Applied Technologies and McLaren Electronics Inc (USA), focusing chiefly on Formula 1 and associated technologies, while McLaren Automotive has been spun out of the McLaren Group and from 2011 will begin to manufacture its own range of high-performance production sportscars, targeted to penetrate a series of meticulously-selected premium automotive market segments.

'The McLaren Group and McLaren Automotive will continue to evolve in-line with their respective business strategies, and may in time adopt slightly different shareholder groupings, but they will always share a common goal – to be the best in the world in their respective fields.'

McLaren Automotive executive chairman and McLaren Group founding shareholder Ron Dennis – team principal of the F1 operation from 1980 until earlier this year, when he stepped down in favour of long-time deputy Martin Whitmarsh – reflected that the new arrangement represents 'a win-win situation' for both parties.

“I've often stated that it's my belief that, in order to survive and thrive in 21st-century Formula 1, a team must become much more than merely a team,” underlined the Englishman. “That being the case, in order to develop and sustain the revenue streams required to compete and win grands prix and world championships, companies that run Formula 1 teams must broaden the scope of their commercial activities.

“Nonetheless, all of our partners will of course continue to play a crucial role in our Formula 1 programme. For that reason, and because the engines they produce are very competitive, we're delighted that Mercedes-Benz has committed to continue not only as an engine-supplier but also as a partner of ours until 2015 – and perhaps thereafter.

“The next few years will be a very exciting time for McLaren, during which period we intend to become an ever-stronger technological and economic force. Formula 1 will always be a core activity, for sound business reasons as well as for historical sporting reasons; to be clear, our Formula 1 business has traditionally enjoyed great financial security, largely as a consequence of the longevity of our contracts with our partners, many of which have exceeded 15 years of continuous involvement with McLaren. Indeed, two of our partners have been with us for more than 25 years.

“We're risk-averse by design. Over the past two years we've analysed in great detail the challenge of entering the high-performance production sportscar market. In the MP4-12C, which will be introduced to market in 2011, we have a car that has inherited the genes of the iconic McLaren F1 of 1994 and has already been the subject of much global media acclaim. It is proposed that it will be produced in a new state-of-the-art production facility adjacent to the existing award-winning McLaren Technology Centre at Woking.”


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