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Mercedes' engine costs reverse by 11.2m

NEWS STORY
16/08/2010

They don't come more ironic than this. The freeze on F1 engine development was originally introduced by the FIA to cut soaring spending by the car manufacturers. It didn't have the desired effect as the manufacturers instead diverted their investment into developing what they thought would be used as the next engine when the freeze is suspended. However, irony of all ironies, just two years away from the removal of the freeze we discover that Mercedes has now reduced its spending on F1 engines. The reason for this is simple: the FIA has yet to decide on the new engine specification.

Writing in the Independent, Pitpass' business editor Chris Sylt reveals that Daimler, Mercedes' parent company, cut spending on research and development of its F1 engines by 21% last year. The German car manufacturer's High Performance Engines (HPE) division manufacturers the 2.4 litre V8 engines used by McLaren, Force India and its own Mercedes Grand Prix team.

HPE's accounts for the year-ending 31 December 2009 show that research and development expenditure reversed from 52.8m to 41.6m giving the company total costs of 91.4m. Thomas Fuhr, HPE's managing director, explains that "due to the FIA uncertainties with regard to regulations and pressure on cost we have not undertaken future development at this time."

HPE suffered a further blow in June last year when FOTA decided to drop the KERS energy recovery technology which had been introduced at the beginning of 2009. HPE spent 16.2m developing its version of the energy recovery devices and in 2009 it was hit with a 1.4m impairment charge on the value of the assets since they are not being used this year.

This chopping and changing of the regulations gives further weight to the view, recently proposed by F1's boss Bernie Ecclestone, that the sport needs a more independent rule-making framework. "You can't have competitors writing the rules," he said adding that "we maybe need an independent body, independent from the teams and the FIA writing the regulations. There are enough people out there who could do it."

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