Why Alfa Romeo should stay in F1 and why it refuses a technical commitment – 2022

The Italian brand has been present in F1 as a sponsor of Sauber since 2018, and since 2019, the team has become its title sponsor. Still, it’s basically just a sponsorship deal that exploits the relationship with Ferrari, which supplies the Sauber with power unit and gearbox.

From an economic point of view, the current agreement represents a convenient investment for Alfa, as it does not impose the burden of having to finance a design and development program for a power unit or own a team and all the expenses it entails.

It is an agreement that we have also seen before in the premier class. Red Bull Racing itself was sponsored by Infiniti and Aston Martin, giving both brands a presence in the sport.

The Volkswagen Group wants to enter F1 very differently.

Porsche looks to fund and brand the new Red Bull Powertrains engine, while Audi plans to buy a team that will represent the brand while running a program to design its engines in Germany. Overall, it will be a very expensive exercise.

Meanwhile, Alfa Romeo, which is expected to announce a decision to renew its relationship with Sauber in July, will receive large exposures at a much more modest expense.

Carlos Tavares, CEO of the Stellantis group, which owns Alfa Romeo and a number of other brands, does not mince words about how the deal works – and rejects any suggestion that Alfa should be more directly involved and perhaps take the big step to buy the Swiss team.

I have a strong partnership today. It works. The team is called the Alfa Romeo F1 team. And I do not think it would be fair to criticize that we have a strong partnership. Why should we criticize that we have a strong partnership? Why should we think that there is only one way to be in F1, namely to have a team? What is the benefit? The advantage we want for motorsport fans is to be competitive on the track. That’s what they want to see. Overtaking, braking, handling tire wear, etc. So what I respectfully want to challenge is the view that there is only one way to be in F1. And I would like to ask, what’s wrong with having a strong partnership in a team called the Alfa Romeo F1 team? If it works, if the team is motivated, if the employees are excited about what they are doing, if the results are getting better, if the drivers say the car is improving, if you see it in the results, if we are here to discuss it is because it works. So should we open our minds that the business models that need to be present in F1 are more than one, maybe two, maybe three, maybe four? I do not know. So this is my answer. But I understand where the speculations are. But my honest and sincere response from someone who has been in motorsport for more than 40 years is that in the end there can be more than one way and even more than one successful way to be presented in F1.. “

Alfa Romeo’s engagement with Sauber precedes the birth of Stellantis, formed in 2021 by the merger between Fiat Chrysler Automobiles and PSA Group.

Carlos Tavares Alfa Romeo

So Alfa inherited the deal, which may have involved a different commitment, but Tavares – former Estoril track commissioner and even driver – is convinced that F1 is the right place for the brand. He cites its presence in the United States and China, markets where the sport is growing, as one of the key factors.

For all the car companies that work hard to become the best that Stellantis does, this is obviously a place to be.“, he added.”To show that at the top of the motoring world we can create great results. Alfa Romeo was already involved in F1, in what we consider a very positive partnership. And we saw that there was more potential to develop the partnership and try to combine the two positive dynamics. A positive dynamic is the improvement in sports results, which can be seen since the beginning of this year. And the other positive dynamic is that we clearly saw an opportunity to profitably grow Alfa Romeo’s business around the world. Alfa Romeo is one of our three premium brands. It is the only one of these three premium brands present in the three largest markets in the world, North America, Europe and China. So he has a specific need to improve his awareness and general opinion around the world. And of course, F1 is a perfect show to raise awareness of a global premium brand called Alfa Romeo. So it’s something that represents a good foundation, and we decided that we should work on that foundation to increase awareness of the Alfa Romeo brand around the world. Brand equity is already very strong, but we can make it grow even more and of course bring a more profitable business to Alfa Romeo“.

Alfa Romeo may only be a title sponsor instead of an owner, but Tavares is determined that cost ceilings should continue to play an important role in what teams can use. He does not want to see F1 regulated by some form of performance balance one day, as is the case in other sports competitions, for example.

We believe that F1 must stay out of what I would call the BoP world. And therefore, it should continue to work rigorously and fairly on the cost ceiling, which is the alternative to the BoP world. And since we do not want BoP to come to F1, it is good that we are working on the budget ceiling. Because if we work on the budget ceiling, then we will improve the return on investment that car manufacturers could have in this sport, given the media impact we may have. And if we have a good return on investment, then it’s good for the sport, and it’s good for car manufacturers. So there is a good balance of interests between the cost ceiling, which improves the return on investment for car manufacturers, the sustainability of the sport and the fact that it makes economic sense to be present in F1. So I think it’s in the best interest of all motorsport fans like you and me to protect the fact that you can drive on a reasonable budget. Because if the budget is sensible, with the good media effect that is created, then the return on investment is good. And if the return on investment is good, the car manufacturers will come“.

Not surprisingly, Tavares welcomes the expected presence of Audi and Porsche from 2026 – both names that Alfa Romeo would like to compete with. However, he warns that their arrival should not lead to increased expenses.

I’m very glad we wanted even more OEMs in F1, I think that’s good. As long as the presence of these OEMs does not just make the show fail. And how can the show fail? Lets inflation take over the show. It is not in our interest, for us motorsport fans, to let inflation take hold. Because after inflation there is some nonsense, after nonsense it explodes. And after the explosion, everything has to be rebuilt. So we sincerely welcome other OEMs, because it’s good. This is sport, this is the big fight. That’s why we’re here. We like it. But it is important that it is combined with reasonable budgets that protect ROI, because ROI is why we are here. So if we have newcomers and they blow the show because they are ready to spend money at a level that does not make sense, even our employees do not make sense, then the show fails three years later. So that’s the limit of accepting new entrants and especially strong new entrants. We live the sport and we like to race on the track. But the cost ceiling rules must be respected. You must abide by these rules and make sure you play by the rules. And if that’s the case, then we welcome them, it’s going to be great, and I’m not worried about the guys who have a lot of money, because talent is not always where there is money.“.

Tavares is convinced that sports managers are very careful about the subject.

We have a long history in F1, we should protect history and keep things under reasonable control. That’s why I’m not worried about newcomers. It’s all about the way the sport is managed. But I think our current philosophical understanding and adaptation to Stefano Domenicali is very, very strong on this subject. And I think he’s fine. I think he does the right things for the sport“.

As already written, we will not know until July whether Alfa will extend its current agreement and for how long.

It’s a simple calculation, as Tavares notes: “As long as there is a positive story to tell about the Alfa Romeo F1 team’s improved performance, then I have a good positive media impact that I can put in front of my financial contribution to the team. That’s how I figure it out. And from that point of view, it’s a good deal“.

However, Sauber is one of the teams at the top of Audi’s shopping list, and there is therefore a possibility that it will not be available as an Alfa sponsor from 2026 onwards. Tavares does not seem concerned about this possibility

This is pure speculation. In my car industry, do you want a list of my concerns? How many days? I do not think you have enough pages in your notebook. We will see…

Original article on motorsport.com

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