Honda dumps F1

Motorsport stalwart, Honda, has shocked the motoring world with news it has withdrawn from F1.

Speaking in Tokyo this afternoon, Honda Motor Company President, Takeo Fukui, said the company would quit the world's premier racing series with immediate effect.

"This difficult decision has been made in light of the quickly deteriorating operating environment facing the global auto industry, brought on by the sub-prime problem in the United States, the deepening credit crisis and the sudden contraction of the world economies," Fuki-san said in a formal statement.

"Honda must protect its core business activities and secure the long term as widespread uncertainties in the economies around the globe continue to mount. A recovery is expected to take some time.

"Under these circumstances, Honda has taken swift and flexible measures to counter this sudden and expansive weakening of the marketplace in all business areas.  However, in recognition of the need to optimize the allocation of management resources, including investment regarding the future, we have decided to withdraw from Formula One participation," the global Honda boss explained. 

"We will enter into consultation with the associates of Honda Racing F1 Team and its engine supplier Honda Racing Development regarding the future of the two companies.  This will include offering the team for sale," he said.

Honda's Brackley (UK) based F1 operation employs nearly 800 and ran on a reported budget of around 50 billion yen ($A780 million) per year.

Look for the Carsales Network motorsport correspondent Geoffrey Harris' analysis of the announcement and its potential knock-on effects here soon…

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