Formula One Engine Supply

Engines are currently a huge talking point within Formula One and there were several developments over the past few weeks. Naturally, thinking about the situation, I have a few ideas of my own about the matter.

What’s happened recently?

There are three major things going on when it comes to engines. The first is that Red Bull are still trying to finalise their engine supplier for 2016. The second is that Scuderia Ferrari used their veto to block the FIA introducing a maximum price for engines to customer teams. This entails reducing the current cost of an engine from $20 million to no more than $12 million, which has, as mentioned, been vetoed by Ferrari as it will mean they will lose money, as will other engine manufacturers..

Lastly, having had the maximum cost idea vetoed the FIA are now playing with the idea of introducing a budget engine for 2017 onwards.

Moving on

Right, with the current state of play outlined, time for some other ideas. Firstly that Cosworth would be an ideal company for the budget engine. It is important to remember that many of the new teams introduced in 2010 used Cosworth’s V8 engine before either moving to a new supplier (in the case of Caterham) or sticking with the power unit (like HRT and Marussia did).

With the FIA wanting to bring the cost of engines down to help the smaller teams, it has got me wondering whether there is another solution to the problem. That solution being to bring more engine manufacturers into the sport.

There are currently four which is not many when compared to ten years ago when there were seven engine manufacturers. But if the sport were able to increase that number by enticing the likes of Toyota, Ford and Peugeot back into the sport it could potentially do two things.

“Three Point Agenda” by Tahir Hashmi is licensed under CC BY-NC-ND 2.0

Firstly, it could help increase development of the current engines as more people and resources would be dedicated to the problem. There is also the benefit of having numerous manufacturers approaching and solving the problem in different ways which could lead to the second benefit of reducing the cost of the engine for smaller teams.

How would it reduce costs?

Currently a midfield team has four options, either Ferrari, Renault, Honda or Mercedes, which doesn’t leave them with much negotiating room. The manufacturers on the other hand have works teams (Scuderia Ferrari, Red Bull, McLaren and Mercedes), and In order to make money they also have customer teams, an example is Mercedes who have Williams, Force India and Lotus currently as customers.

“Renault logo” by albertizeme is licensed under CC BY-NC-ND 2.0

However by having more engine manufacturers in the sport, say seven, for the likes of Manor, for arguments sake, it suddenly puts the smaller teams in a stronger negotiating position. Now they can shop around more and have a better chance of getting a current spec engine for $12 million as the engine manufacturers will be competing with each other to secure enough customers. However, in order to secure a deal with the likes of Manor, and taking into consideration the increase in competition, engine manufacturers will have to reduce their prices in order to secure those customers.

A last thought

On top of the potential reduction in costs and increase in development, wouldn’t it just look good generally if the sport had more than four engine suppliers?

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