When BMW Sauber driver Robert Kubica won the Canadian Grand Prix on Montreal’s Circuit Gilles Villeneuve last June, a year after his car blew apart there in a spectacular crash, he delivered the German automaker’s first Formula One victory in 63 starts.
When he lines up on the grid for the season’s final race in Abu Dhabi in November, it may be BMW’s last.
The maker of the Mini and X3 SUV stunned fast-car fans Wednesday by declaring it would pull out of Formula One. It will become the second carmaker in less than a year to quit the premier racing series after Honda Motor Co. said in December it would withdraw.
As auto earnings around the world get crushed by stalling sales in key markets such as the United States, manufacturers are under more pressure than ever to decide where to dedicate limited engineering and marketing resources.
However, BMW’s move is also about protecting another precious commodity in the auto industry, one that can take decades to build but be quickly destroyed -- image.
“Of course, this was a difficult decision for us,” said Norbert Reithofer, BMW’s chairman. “But it’s a resolute step in view of our company’s strategic realignment.”
He said luxury automobiles will increasingly be measured by their sustainability and environmental compatibility. So BMW’s F1 campaign is “less a key promoter” for the company.
On the face of it, BMW seems to be trying to project a softer image, one that doesn’t fit with the high-revving engines and squeeling tires of international motor sports.
By downplaying the importance of Formula One for its future, the German automaker is saying it will no longer be defined by its ability to develop and build the world’s fastest combustion-engine automobiles.
But behind that apparent change in corporate philosophy is simply BMW’s lack of success in the sport, said Stephen Slater, founder of Chesham, U.K.-based motorsports marketing firm Kingpin Media and author of a book on the corporate history of BMW.
The automaker has struggled in F1 this year, scoring only eight points in 10 races. It stands eighth in the team standings behind leaders Brawn-Mercedes, RBR Renault, Ferrari and Toyota. That has hurt its public reputation as a performance car manufacturer and undermined its advertising slogan as “The Ultimate Driving Machine,” Mr. Slater said.
“You can’t be ‘The Ultimate’ when you’re stuggling not only to outpace Renaults but you’re actually struggling to outpace Force India, [a two year-old team created from ashes of financially-crippled Jordan Grand Prix].”
While Honda disbanded its Formula One team to protect its core business just as sales fell off a cliff and the company was pounded by a rising yen, BMW’s move is more about shielding its brand from further potential harm, Mr. Slater said. BMW global sales fell 13% in June, but the automaker has been less affected by the recession than other competitors.
The other issue is transfering the technology developed by F1 team engineers into every day cars. Some automakers appear to be struggling to figure out how to marry their motor racing efforts with the technological development of mainstream lineups.
BMW has been blasted by critics who say its Kinetic Energy Recovery program -- the brake energy regeneration system it tested on its F1 cars and hoped to use on standard production vehicles -- was an expensive fiasco. Others argue it has worked, with the results seen in the variable valve timing of its road cars and engine management systems.
BMW shares rose 3.6% to close at 31.57 euros in Frankfurt trading Wednesday. They’ve gained 46% this year.
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