The following document is the text of a letter sent by the FIA President to the FIA Formula One World Championship Team Principals on Friday, February 7th, 2003:

Proposed new regulations for the FIA Formula One World Championship

Discussion of the 15 January meeting and its immediate effects has obscured what I believe are important proposals for 2004, 2005 and 2006. The ideas behind these are new and quite difficult to grasp, particularly when one has been in Formula One a long time. However, the Championship needs a long-term solution to current problems. The purpose of this letter, therefore, is to explain these proposals and invite your thoughts.

Two significant difficulties

Currently, seven major car manufacturers are involved in Formula One. They all deploy vast technical and financial resources. This brings benefits, but presents two significant difficulties: first, any team not backed by a major manufacturer is likely to find itself short of money and technology, particularly in an economic recession; secondly, there is no guarantee that one or several of these manufacturers will not stop racing. Although Ferrari have been in the World Championship since it started and Toyota are in Formula One for the first time, the remaining five (BMW, Ford, Honda, Mercedes and Renault) have a history of coming and going over the years. There is nothing wrong with that - Formula One is not their core business, merely one of a number of marketing and technology options available to them. However, in planning for the future we must take account of the possibility of having only one or two manufacturers in Formula One at any given time, or as many as eight or nine.

The independent teams

If we are to achieve a stable Championship, we must ensure that the independent teams can survive as manufacturers come and go. The FIA Formula One World Championship is the core business of an independent team. Unlike a manufacturer, an independent team cannot just stop racing, because to do so would be to close its business. Thus the way to guarantee the long-term health and stability of the Championship is to make sure there is a solid group of independent teams which do not depend on the presence of the manufacturers for their survival. We can rely on the independent teams. We cannot rely on the manufacturers. Although their presence is very welcome, the car manufacturers will come and go as it suits them - they have always done this and they always will. After all, they are responsible to their shareholders, not to motor sport.

The need for decision

On 15 January I outlined a number of steps the FIA intends to take in order to apply existing regulations more effectively. In addition there were a number of proposals for changes to the regulations to take effect in 2004, 2005 and 2006. If we are to introduce these changes, we must start to do so no later than 31 October 2003. However, it would be much better if the entire package, including measures which technically could wait until 30 October 2005, were decided and voted upon at an early date. I am therefore writing to you to explain the proposals more fully in the hope that we can progress matters quickly.

The cost of development versus the cost of racing

A manufacturer will spend hundreds of millions of dollars designing and developing a new road car and production line. The result is a car which costs relatively little to replicate and can be sold very cheaply compared to the cost of design and development. Similarly, we should separate the costs of research and development in Formula One from those of going racing. No-one can control the costs of designing and developing a car or engine; they are entirely in the hands of the team or manufacturer concerned. But we can control the cost of going racing once the car has been developed.

Why the cost of racing is the key

If the cost of competitive racing is low, we can have full grids and a healthy Formula One. Provided the cost of going racing is very small compared to the cost of design and development, there is no problem if only one or two manufacturers are present. Their cars and engines can be replicated at minimal cost so as to fill the grid. Equally, there is no problem if seven or more manufacturers are present, because independent teams can still be equipped at minimal cost. An independent team may even find a manufacturer ready to help it in return for an increased presence.

Reducing the costs of racing

So how do we reduce the cost of going racing? The answer is (i) by eliminating unnecessary and complex equipment and procedures at the races, (ii) by requiring the use of long-life car components and engines and (iii) by allowing teams to use components (or even entire chassis) designed or built by other teams or outside suppliers.

Engines as an example