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Mercedes accounts show spiralling cost of F1

The latest corporate accounts from Mercedes lay bare just how expensive F1 has become, graphically revealing that the motorsports division spent a record £242.1 million in 2011.
Mercedes' latest corporate accounts reveal that the cost to the car manufacturer of competing in F1 skyrocketed to a record £242.1 million in 2011. That's despite the running costs of the Mercedes F1 team actually falling slightly, down 0.2 per cent to £125.7 million.

That slight fall is nothing compared to the 54.2 per cent increase in spending on the engine division, however, which rose to a total of £116.4 million.

That's because of early research and development of the new V6 engines that will be required in 2014 after a period of relative stability in the rules and regulations. The accounts say that engine R&D spending alone jumped by £17.3 million to £52.4 million.

While Mercedes make money back on that investment by selling engines to other teams, it's still unlikely to make much of a return from the outlay. The engine department made a net profit of just £4.9 million in 2011, and after tax that ended up being a loss of £10.6 million.

The accounts show that the head count in the motorsports division rose by 78 staff to 989 in total, an overall wage bill of £60.1 million for the year. The costs don't include the likely sizeable outlay the team have since made on acquiring the driver services of Lewis Hamilton for the 2013 season.

The figures - allied to a lack of success in winning the championships - could well reveal the reason for the current managerial reorganisation underway at the team in recent weeks, as Mercedes look to stem financial losses while adding race wins.

Former director of motorsports at the team Norbert Haug was ousted after the 2012 season and former Williams F1 executive Toto Wolff hired as an executive director to replace him, along with the appointment of former world champion Niki Lauda as a non-executive chairman.

"I think the first point to be clear on is that Niki Lauda is in charge. He clearly doesn't understand the non-executive part of his title," said Sky Sports F1 analysis Ted Kravitz this weekend. "I understand that Lauda has even made it clear to [team principal] Ross Brawn that Brawn reports to him, and that he then reports to the Mercedes board."

That's not likely to have gone down well with Brawn, who won the 2009 world championship with Jenson Button driving for his eponymous team before Mercedes subsequently bought it up - especially with Wolff's appointment also threatening to sideline him.

Related Pictures

Click on relevant pic to enlarge
Toto Wolff (pictured with future wife Susie in 2011) will head up Mercedes` racing arm from 2013
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22.11.2012- Ross Brawn (GBR), Team Principal, Mercedes GP
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February 03, 2013 5:02 PM

It will not be long before Mercedes sells their team. When Schumacher was recently questioned about lack of funds being a factor in their uncompetitiveness, he said, "It's a factor. Over the years, Red Bull built an infrastructure and has a budget giving them the possibility to respond to anything in the best possible way.It is nothing more or less than what we had at Ferrari,". Mercedes have not been spending enough to gain success, despite mounting costs. As has been said by others,Mercedes will splash out and then get out.

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