Renault’s Return and the Formula 1 Paradox…

The Renault roller coaster of speculation has reached an all time high as hope for their return to Formula 1 team ownership is peaking. Word about their pending purchase of the  Lotus F1 Team has world wide F1 fans wringing their hands in excitement.As I hear the reports of raised speculations I get an eerie feeling that I’ve been down this rabbit hole before….

As of right now there are no reports confirming the sale of the Lotus F1 team to Renault. The headlines today are filled with modifying words like Road & Track “Renault Might Buy Back the Lotus F1 Team” 8/31/15, or this one from Sky Sports  “Renault confirm they are considering buying Lotus” from 7/27/2015. The problem is, Lotus F1 has been stringing us along with this nonsense for a long time. BBC F1 writer, Andrew Benson, made references to Lotus’s financial issues in this article that date back to 2012.  Does anyone remember the Kimi Raikkonen salary issue at the end of the 2013 Season? Suddenly Kimi required surgery and missed the last two races. The post season buzz that year was about weather he ever got paid. The end of the 2014 F1 season again found us holding our breath to see if Lotus F1 would remain solvent.

Here we are in September, of 2015. The headline two weeks ago carried images of impounded Lotus F1 Race Haulers. yawn, stretch…   I caught slack on twitter for completing that sentence and saying “who cares?”

Everyone’s hopes are pinned on Renault Buying Lotus F1, and this might be where I break with convention…

I’m not sure I see a real benefit to Renault’s continued involvement in Formula 1. I need to provide a bit of background on my reasoning. There is an assumption made on the part of most fans which heavily influences their understanding about Formula 1 racing. The conventional thinking believes that Formula 1 racing provides “the proving ground for tomorrow’s road technologies” and that  “this is where the next generation car will evolve from.”   The reality could not be further from the truth. Formula 1 is the last place any manufacturer will place their engine development resources for production vehicles. F1 engine technology is completely  unique unto itself and serves no other application than to power an F1 car. Chevrolet test marketed the first electric car in the United States back in 2000 with no involvement in Formula 1. It was well documented in the movie “Who Killed The Electric Car” . More on engine  technology development later, I digress… 

Let us dial up the Way Back Machine to “early in the 2015 F1 season”.  The big story at the time was all about Audi,  and how they would be the brand to spearhead the VW Groups entry into Formula 1.  The speculation suggested that Audi could and probably would dominate F1 because of their track record in literally every other form of racing they touched. As the gravity field around the Audi name began to envelope me I was able to project a mental image of the car. What color would it be? Who would drive it? …and probably a thousand other questions within a single split second. But then I considered the move from Audi’s boardroom perspective, and it did not make sense.  What did Audi have to gain other than F1 bragging rights?  Within the context of Audi’s business model, what problem would Formula 1 solve? What value would Formula 1 attach to the Audi name if they struggled? What new technology are they lacking or the means to develop? The answer to everyone of these questions is none.

These are the types of questions a manufacturer asks when discussing a commitment like, fielding a Formula 1 team. It is a strategic decision when an auto manufacturer decides to participate in any motor sport because it directly effects their branding .  Strategic planning dictates that all down stream functions feed the upstream objective or strategy. Auto manufacturers are not lining up to join Formula 1. The best place for an auto manufacturers research and development Dollar or euro seems to be The World Endurance Championship Series, commonly known as WEC.  Look at the current list of manufacturers actively in WEC; Toyota, Audi, Porsche, Nissan, Ferrari, Morgan, Aston Martin and  Chevrolet. Some of the cars they are running look very much like the car you can purchase at a new car dealer today.   The WEC does have several racing classes, and all classes compete on the track at the same time, like a huge dysfunctional family battling out their differences. The range of engine technologies in the paddock at the 24 Hours of Le Mans for example are much closer to what is in your drive way than what was ever used in Formula 1. Audi is gaining everything it needs from Motorsport already, Formula 1 would only be a distraction.

The engines specified in Formula 1 are designed to operate under very restrictive engineering parameters. There are specifications defining all aspects of the engine’s limits. When you start stacking technical  limitations, especially those regarding  fuel rate and testing schedules,  on top of penalties incurred for faulty components,  you realize that Formula 1 rules are so restrictive that it impacts the competition in ways it never has before and in ways that the driver has no control over. But the single aspect of the Formula 1 regulations which is most counter productive to research and development for an automotive manufacturer are the severe limitations for testing. In a traditional engineering sense this severely handicaps the engineering development of the engine.  so from a purely practical point of view, a Formula 1 engine is the absolute last place a manufacturer would develop new road technologies.

But my intent is for this discussion is to be strategic…  and the strategic reasoning behind a Motorsport endeavor for an automotive manufacturer…

Mazda is an ideal case study of a manufacturer that has very effectively integrated racing into their corporate strategy , but in a completely different way than one might think. Mazda promotes several racing series including an open wheel series. But Mazda also links their customer directly to the racing experience with things like SPEC Miata racing.  The strategy is evident in even their commercials. Remember the the original Mazda “Zoom Zoom” commercial, with the boy? That 1990 commercial had a tag line “all children know it, some adults remember it,  One company refuses to outgrow it”.    Participation in these race events werea not the creation of a down stream Mazda manger, but the Board of Directors at Mazda, who refuse to outgrow it. This may seem obtuse, but nearly 30 years later and Mazda is more committed to racing than ever before; they’ve successfully infused racing into their DNA, and that birth was conceived at the top.

But look at the Mazda production lineup. They make family cars with a few sporty models. They’ve deliberately maintained the MX-5’s size and engine displacement because the cars can be purposeful in a fun way to the owner. I site this example to create a common ground of understanding for

So why do auto manufacturers enter Formula 1?  Manufacturers enter Formula 1 because they love it. The collective passion for Formula 1 must exist at the top. As the pinnacle of motor sport, a Formula 1 car is designed with a single intended purpose, to be THE FASTEST. For most auto manufacturers that would be an insurmountable goal.  And that is why Mercedes Benz is involved in Formula 1.  When Mercedes Benz executives are at the summer lawn party, or the concouse de’Elegance’, and they greet the Executives from the other German manufacturers, they do with a knowing that they are faster, better… proven on the Grand Prix circuit. That is the payoff! As simple as it sounds, it’s what it all boils down to.

So where does this leave us? What is Renault’s intent? We know that they want to relive those lawn party moments when they scoffed at the worlds other auto makers. Does Renault posses the corporate resolve and tenacity to stick it out and take the fight to Mercedes and win? Will Renault be willing to continue development on their F1 engine if the factory team is the sole engine customer customer and the F! engine program is a complete money pit of frustration? Do they have tenacity to go it alone?

I say not. If Renault had the resolve to buy Lotus F1 we would not be having this conversation now and probably would have never had left F1.  I hope I’m wrong… the decision is suppose to be pending now! The winds of Formula 1 can turn more freely than the 2016 schedule.  The team behind the eight ball is The Haas F1 team. They need the dust to settle before they will get the firm commitment they are looking for, from which ever drivers they have left to choose from.