Corporate Strategy Case Study

Honda’s Exit from Formula One: Can Multimillion dollar Sport Stay Afloat?

OR

Abstract:
Honda Motor Company, Japan's second-biggest car maker by volume, had been a front-runner in the Formula One racing sport for the last three decades. Its annual spend to maintain the racing team stood at 50 billion yen (US$542 million). However, on 5 December 2008, amidst the economic turbulence and global crisis, Honda announced its withdrawal from F1. This step was taken to conserve cash and realign its engineering resources in the face of the deteriorating global outlook. Honda's decision created quite a stir, causing concern for the future of the car industry's premier sports event F1, considered to be the world's richest glamour sport. This case focuses on whether Honda's exit would have serious implications on F1 and its stature as 'the glamorous sport' in the coming future.

Pedagogical Objectives:

• To discuss the effects of the economic downturn on the automobile industry, particularly Japan.
• To understand and discuss the F1 racing sport industry.
• To analyse the implications of Honda's withdrawal from F1 on the glamour sport.

Keywords : Honda; Formula One; F1; Glamour; Grand prix; Grid; Million dollar; Toyota; Drivers; Engine; Automaker; Championship