Daniel Ricciardo, McLaren, Monza, 2021

Why talk of a McLaren takeover by Audi – or another manufacturer – is premature

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On Monday several outlets reported that various motor manufacturers were evaluating a purchase of McLaren. One stated a deal had been cut to acquire the Formula 1 operation and supercar manufacturer in order “secure an F1 entry”, but rapidly amended the report after McLaren issued a press release stating it is “wholly inaccurate and McLaren is seeking to have the story removed.”

Subsequently it was reported elsewhere that Audi’s board was evaluating “a partnership with McLaren”, while suggesting BMW was another potential buyer of the British-based – but Middle East-controlled – company. Other outlets added that Porsche was likely to partner Red Bull Racing, currently establishing its own power unit division, as engine supplier from 2025.

Crucially, the reports emerged before the main Volkswagen Group, which controls both Audi and Porsche, rubber-stamped a F1 entry by either or both brands in whatever form – full team or power unit supplier only – such entries may take, if approved at all. Equally BMW, which rubbished the reports, has not attended F1 meetings – let alone engine summits designed to woo incoming manufacturers – since exiting the sport in 2009.

None of this, however, means Audi or BMW have not held talks with McLaren, for the former has attended said summits and publicly admits to an interest in F1 once timing (2025/26) and regulations (not yet agreed) gain FIA World Motorsport Council ratification (likely 15 December). It would clearly need to find a partner operation and/or operate its own team, whether acquired or established from scratch.

Audi pulled out of Formula E this year
So it would be negligent of Audi to not explore all potential opportunities, one of which could be McLaren, but could as easily be any independent team such as Red Bull Racing and sister outfit AlphaTauri, Williams (whose CEO Jost Capito held numerous high-ranking VW positions) or Sauber (which has long-standing technical ties with the Four Rings).

Equally BMW, as the only Germany manufacturer without an in-house supercar brand – Mercedes has AMG and VW Group the likes of Porsche, Lamborghini and Bugatti – would be remiss to ignore the potential availability of McLaren Automotive should Audi wish to acquire the F1 team only, which has a separate shareholder structure after selling a 15% slice – rising to 33% – to MSP Sports Capital in late 2020.

BMW could be after the supercar division only. The company has form when it comes to purchasing British brands, currently owning Rolls-Royce and Mini. Indeed at one stage the entire Rover group, including Land Rover, was controlled from Munich.

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But there lies the rub: Why would VW Group acquire yet another supercar brand, one that directly competes with its existing product portfolio when all it is actively seeking is an F1 partner for Audi? Thus, Audi and BMW could divide the spoils much as they did when VW and BMW split Bentley and Rolls-Royce respectively (acrimoniously, at the time). The smart money also has Williams in the mix.

BMW has shown no interest in returning to F1
Further complicating factors are that F1 engine supply is likely to remain regulated; in which case there will be no ‘exclusivity’ in the event of a McLaren-Audi tie-up. Meanwhile adding yet another brand to VW Group’s 11 product divisions makes for even more corporate complexity at a time when the VW board plans to simplify its structures.

However, all this overlooks a crucial point: Audi does not have to acquire a team to secure an F1 entry. The current Concorde Agreement, which imposes the (myopic) $200m ‘anti-dilution’ fee on incoming teams, will expire at the end of 2025, and the new engine formula – which is attractive to VW Group – is unlikely to kick in before that date. Plus, there is talk that F1 is prepared to waive or absorb the fee were a manufacturer to enter.

The Red Bull-Porsche rumours are more complex to unpick, not only because the former entity is in the process of establishing an own engine division – a spin-off from current partner Honda’s F1 campaign – but also because the drinks company operates two teams which share permitted components. To provide the desired chassis synergies, Porsche would need to supply both teams.

What then happens to Red Bull Powertrains, in which substantial investments have been made? There are suggestions that the operation could simply switch to producing Porsche power units, but that overlooks the company’s determination to maintain its ‘Made in Germany’ selling point, particularly as Stuttgart neighbour Mercedes produces its F1 engines in the British Midlands. Consider it to be Teutonic pride at work.

Ultimately any speculation about the future structures and ownership(s) of McLaren is just that, and a number of key pieces – not least a defined set of regulations and a positive board decision – would need to drop into place before McLaren Papaya gets combined with Audi Silver.

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Dieter Rencken
Dieter Rencken has held full FIA Formula 1 media accreditation since 2000, during which period he has reported from over 300 grands prix, plus...

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  • 7 comments on “Why talk of a McLaren takeover by Audi – or another manufacturer – is premature”

    1. Great article.

      PS not sure AMG if is a brand rather than just a trim/tuning, similar to the BMW M series.

      1. AMG GmbH is a subsidiary company of Daimler AG. They were originally an independent company “AMG Motorenbau und Entwicklungsgesellschaft mbH” started in 1967, then DaimlerChrysler bought them out in 1999

    2. I really can’t see the value of F1 to BMW / Porsche / VW. Whatever the new regulations / team acquisition costs are, it’s not going to be cheap, much less the costs of being successful. Lewis costs Mercedes $50m a year, I have no idea idea what Brixworth costs, or Brackley, the cost cap is essentially ‘ongoing costs’, but it’s all tens or hundreds of millions.

      I’m not sure they relate to car sales, or why people buy Mercedes over BMW.

      Nobody is entirely sure what the future of propelling things forward is yet, it could be many things, but entering F1 isn’t going to help accelerate that, manufactures can develop / test much more freely outside of F1. BMW, VW, Porsche are already established brands that don’t need exposure. Why enter a very frivolous and expensive world?

      I think i’m right in assuming F1 teams don’t turn a profit generally, so it’s not an investment, help them develop engines, or sell cars? Both seem a bit of a stretch to me.

    3. If they and F1 are serious about getting VAG / Audi / Porsche on the grid, then it’s should be in the form of new entries.

      Two or four more cars on the grid = more seats = more new / young drivers.

      F1’s ‘closed shop’ approach is strangling the sport.

    4. “Why would VW Group acquire yet another supercar brand, one that directly competes with its existing product portfolio when all it is actively seeking is an F1 partner for Audi?”

      Exactly.

      It is plausible for a BMW tie up with the automotive side, not to mention that the Mclaren F1 had a BMW V12 in the back. However, that still raises a lot of questions. For example, what will come of the investments Mclaren have in developing their own engines with Ricardo?

      I get the feeling that Williams will be in pole position for any VW works partnership. It is the most sensible. Or as the article says, they start their own team.

    5. Or VW could simply walk, again, having been shown deference by the owners, the regulators, and the competitors in Formula 1.

    6. I can’t see BMW coming back.

      Audi / Porsche could happen.
      The previous Audi management blockage and Ecclestone tensions are both gone, & new engine regs might mean a level playing field. With the cost cap, the ROI value of F1 went up for OEMs.
      However, if it happens it’ll most likely be with Williams for one of the brands. Probably a long term plan from their new equity fund owners, and also why they placed an ex VW Motorsrsport at the head of the team.

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