Formula One Loses Toyota

These are tough times for Formula One; Toyota is following in the same tracks of Bridgestone Corp, after the tire manufacturer announced it had enough.

Toyota, the largest car manufacturer in the world, has decided to immediately pull out of Formula One competition explaining the move with a need to reduce expenditures and focus on its main activity.

Following a meeting of the company’s board this morning, Toyota announced it will exit the high profile race and pull the plug on its expensive Cologne-based team.

Toyota president Akio Toyoda said that because of the current economic conditions, the company realises it has no choice but to pull out from Formula One, adding that the decision had been a difficult one.

Honda had been the first major Japanese car maker to withdraw from Formula One, a move made last December amid a slumping economic environment. After having taken over the Honda team, Brawn GP won the 2009 F1 championship.

With this move, Toyota is looking to reduce costs as an operating loss for the six months ending September 30 is expected. It had posted its worst ever financial results in March.

Currently hurting Japanese exporters is a strong yen, making electronic items and cars too expensive. Toyoda, grandson of the car maker’s founder, has pledged to return the company to profit mode.

On Monday, other Japanese manufacturing giant Bridgestone Corp., a tire manufacturer which was supplying 40,000 tires for the various Grand Prix races, announced it would not renew its agreement with F1. The news came only one day after the 2009 F1 season ended in Abu Dhabi. Bridgestone’s contract will expire in 2010.

Last July, Fuji International Speedway, a Toyota-owned venture, revealed it would not host the 2010 Japanese F1 Grand Prix race.

This means that Toyota won’t be part of the Formula One landscape in any way, shape or form. It closes its team, pulls it’s sponsorship from the Japanese Grand Prix and even terminates the agreements with other teams using Toyota engines.