Red Bull boss offers Audi an F1 team for 300 million

2006 Audi concept by Kim Stapleton (pointilism.co,au)

2006 Audi concept by Kim Stapleton (pointilism.com.au)

What ever happened to the perennial round of stories suggesting Infiniti were keen to build a Formula One engine? This old chestnut was wheeled out year on year – much to Renault’s disgust – whilst simultaneously the Red Bull Racing team powered by their French engine roared to championship after championship.

The last we heard about an Infiniti engine, was a speculative piece written by Michael Schmidt prior to the 2014 Austrian GP.

Schmidt claimed that Red Bull were already significantly involved with the production of the new V6 PU batteries and that the Renault turbo charger was in effect sub-contracted out to APC Pankl, an Austrian technology collaboration.

Red Bull were said to be talking to AVL, the world’s largest independent power train development company who are also Austrian based. It was AVL’s ‘rolling road’ used for a test by Toro Rosso early last year which hit the headlines following Renault’s poor showing in the winter tests.

Schmidt concluded, “Infiniti would contribute a portion of the budget and may contribute knowledge about electric motors from the parent company Nissan. It is planned that the engine will also be called Infiniti.”

It was revealed recently during a TJ13 podcast that Red Bull are developing out a recently acquired factory unit on their Tilbrook site in Milton Keynes. Interestingly, the first stage of the ‘Unit 9’ modification was to lift the original floor and then excavate to a depth of around two stories.

Amongst the staff in Milton Keynes, these works are believed to be creating the building suitable for “Adrian’s boat project.”

Other speculation is that the subterranean excavations will provide a relatively quiet and secretive location for Red Bull to develop a Formula One engine.

However, the comments of Luca Cordero di Montezemolo last week have cast doubts upon any kind of Red Bull F1 engine project, as the ex-Ferrari man claimed, “Red Bull, they have imploded — a mutual friend told me that Mateschitz is thinking of selling and is trying to convince Audi to come in”.

However, the FIA’s bold plan to attract new engine manufacturers to the sport appears to have failed with the exception of Honda. The reason – the cost of developing a competitive V6 Turbo hybrid power unit is prohibitive even for the world’s largest auto manufacturers.

A feasibility study examining an F1 Audi programme was prepared by Stefano Domenicali in 2014. The bottom line reported by Autosport was that the VW group would need to invest 1 billion euros to get an F1 project off the ground.

This presumably was to fund a start up F1 team and engine, so acquiring Red Bull’s facilities, machinery and staff would mitigate this number somewhat.

Audi of course have a highly competitive hybrid engine developed and racing already in the WEC. But it is a diesel engine.

Further, Audi would be lacking the crossover knowledge of how to integrate a hybrid engine into a Formula One car, which is the key to Mercedes AMG F1’s success. After all, Williams, Lotus and Force India all have under the FIA regulations identical engines.

Were this the F1 V8 engine era, Audi could be confident the appropriate skills would be within Red Bull Racing. Yet  the difference between Toro Rosso and Red Bull Racing this year is simple. Daniel Ricciardo. Whilst the beaming Australian may have the talent to become an F1 world champion, there are other ways to acquire his services without forking out several hundred million to Mr. Mateschitz.

There has been a whirlwind of wild speculation around Audi joining Formula One since Ferdinand Piëch resigned as chairman of the VAG group two weeks ago. However, VAG has its own troubles at present; and even if the immediate attention of the groups senior executives was not to halt falling margins, would Formula One really be on their radar right now?

Were Audi to consider buying Red Bull Racing, Mateschitz would see the start of 2017 as the ideal point of exchange, following the expiry of the Renault Red Bull engine supply agreement.

This is a tight deadline to begin designing a Formula One engine meant to hit the track in anger in just 21 months, and even the VW board were ready to press the button today, exactly what engine should they begin to design?

Ecclestone claims he has agreement for a radical new Formula One in 2017, but what does this mean? With the regulations for the year after next only to be finalised in March 2016, can Audi have confidence that what they sign up to now – is in fact what will happen?

Honda discovered the playing field on which they entered F1 shifted at the last minute, as in season development suddenly became open.

The latest rumour on Audi’s imminent entry into F1 comes from Motorsport-Total, who report a sum of 300 million Euro has been discussed for a complete buy-out of the Toro Rosso team. Dietrich Mateschitz has apparently even offered to stay aboard as a sponsor for a limited time.

Dr. Marko however says, that patience is needed. “Volkswagen Group have to sort out now, who the new boss is. Only then they can decide what they want to do in terms of motorsports.” The Red Bull consultant also re-iterates Mateschitz threat to leave F1. “If we don’t have a competitive engine in the near future, then either Audi is coming or we are out,” said Marko.

Considering the current wrangling at the German auto manufacturing company, these decisions could well take months – if not years.

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19 responses to “Red Bull boss offers Audi an F1 team for 300 million

  1. As Red Bull are not currently a winning team, they have also lost their top driver and designer, what makes them think they’re worth 300m, unless that’s Rupees.

  2. Mateschitz and RB are flailing vigorously with little hope, and it’s entertaining to watch.

    I hope VAG isn’t foolish enough to come into F1. The ROI would be negative.

    • “The ROI would be negative.”

      Depends how much you can sink under “brand exposure” and “marketing benefits”… 🙂

    • It depends on how good Audi markets their possible F1 adventure. It has been estimated that Infinity received over a billion dollar of exposure in exchange for being Red Bull’s title sponsor in the 2010-2013 period. They received more brand exposure than paid for but if you get things wrong, like Renault, it could cost more money than received in exposure…

      • “…but if you get things wrong…” Exactly!

        The ROI is a massive gamble because F1’s costs are too high. Further, the marketing view of F1 is that the KPI are trending down.

        VAG would be wise to hold their breath, and wait to see what the new engine regs look like before making a decision. Smart folks at VAG would be looking for 1) Lower costs, and 2) a reasonable opportunity to become competitive. That would enable a positive ROI.

        • Don’t forget that what is lower costs for a team doesn’t have to be the same for an engine builder. As a manufacturer it doesn’t really matter how much the engine costs because they will be building the engine themselves. But I agree that if Audi were to enter F1 they better make sure there is a better mechanism in place to equalise performance because being in the situation that Renault and Ferrari found themselves in during 2014 is not encouraging or inviting. At least this year engine builders are allowed to make some specification changes in the name of performance.

          • “As a manufacturer it doesn’t really matter how much the engine costs because they will be building the engine themselves.”

            No, building the engine requires 100’s of millions of ($ or £ or €).

            Building the engine may be the higher challenge, in terms of both costs and competitiveness versus running a team. The trials and tribulations of Ferrari and their engine last year, and Renault and Honda this year speak to that point.

            It’s a bit surprising that Audi may want a team, given the challenge of the engine alone.

          • @Vortex Motio: I should have used a different sentence. If Audi decides to have a F1 team the engine costs don’t matter (this is after the decision has already been made to enter). The board room advice that was presented a few months ago adviced for building an engine and buy a team so that is the basis upon which I speculate what would happen, again after the decision to enter F1 has been made. It doesn’t really matter if they invest in an engine or the team the decision to enter F1 has been made and while they are in F1 the money has to be spent either way. As an engine builder you could recuperate some of that investment by selling the engine to a customer team for a hefty price but if the rules are with a fixed engine price than that is a negative reason for Audi to build an engine but it does make the sport cheaper. And that is what I ment with my comment, cheaper for a team is not necessarily cheaper for an engine builder but for Audi it doesn’t matter because they have to spend it on both the engine and the team, again this is after the decision to enter F1 has already been made 😉

  3. Despite not being able to follow F1 as closely as I’d like to in years previous, due to connections I made with various extreme sports insiders, I do a fair amount about Red Bull’s corporate philosophy. I felt, at the time of their re-entry, that RB would end up as a blight to F1. Their bottom line for inclusion into any sporting venture where they are sinking loads of cash is: quietly demand an inordinate say about the direction of the sport in which they want to be a part – a say that favors them reaching the pinnacle of the sport ASAP; throw money at the best people in the sport to secure their services; demand that their staff sacrifice all to develop a quality product, and; rather than accept that success in sport is cyclical, bail on the sport as soon as shadows begin to fall on their product.

    Viewed relative to F1, RB sees their cars only as rolling billboards for their bread and butter product – their energy drink with its ubiquitous catch phrase. Should the product, in this case F1 cars, not “give their drivers wings,” they fold their ample tent and move on to the next thing that gives their energy drink a large gulp of exposure.

    They could care less about F1 and their self-centered, cavalier attitude toward the sport is manifesting itself before our eyes.

    And no, I’m not a fan of RB. I’ve witnessed them destroy athletes through removing sponsorship of athletes after they suffer a season-ending injury; remove sponsorship from athletes mid- season because they decided to throw money at a perceived “next big thing” in a sport, or because a sponsored athlete was in the midst of changing their approach to their craft and wasn’t, for the moment, continuing to place high in events. I’ve witnessed RB renege on advert contracts with extreme sport sporting goods stores and x-sport film companies because they no longer wanted to wait for the stores or film companies to grow its reach. I’ve witnessed them decide, days before the start of an x-sport competition, without so much as a hint, suddenly pull advertising and sponsorship from a local event, causing it to fold with athletes already in town for the event.

    And if ever pressed for an explanation for their actions, blame and responsibility is cast anywhere but on them.

    Make of this what you will, but, from experience, it’s best to view RB with wary eyes.

    • Interesting insight – had wondered about them in light of their approach to the young drivers they bring on – and then dump with no option for them to find alternatives.

    • Thx for the great info. I’d heartily recommend a read of RB’s adventures in NASCAR if one wants a look at how things are likely to work out if their lack of results continues at the current torrid pace.

  4. With Audi having a pretty dominant car in WEC and having pretty good exposure on the world stage I can’t see that they would enter the piranha club any time soon. The technology of f1 is a world apart from their brand or experience (apart from historical entities) Porsche’s entry a few yrs ago was a good start but they failed to really make a foothold in the sport and really,as we have seen with Renault, it can have a real negative impact on your brand if you make a hash of it. Merc poured so much money into these power trains,so much so that it could have settled a small countries debt but realistically was it a winning formula? They did such a good job that the powers that be are fighting to change the rules… again!,so will Merc again invest another billion euro suggested cost to fund a 2 or 3 year race series engine that only allows 4 units per year to a small number of teams.. It just doesn’t make financial sense.The same goes to Audi,it would be corporate suicide. Until we have a stable platform,one which allows the designers to run or fully tinker with the workings of the power train,one without silly tokens or constraints we will be left with only a small number of companies willing to play on a Sunday

  5. Sellers don’t set the price. $300M is just dreaming. Does anyone believe Minardi is worth $300M?!?

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