Mercedes F1 team posts £76.9million loss for 2014 season - F1 news - AUTOSPORT.com Wow. I think most if not all of us are aware that it isn't a $ maker but even I was shocked to see this. On the other hand, it probably would have been worse without the cost cutting measures. I'm sure big wigs at MB can't be too happy!
To be fair they said most of it contributed to the bonusses they had to give out. That said, cost model for F1 is completely wrong.
I like that bonus structure-maybe I should go work there It will be interesting to see how this compares to this yrs results. The #s won't be this high but depending on what they are how long would/will Mercedes keep their 'foot in it'? The fcars might be back on to sooner than later
A team like Mercedes is allowed to go deep in the red because it has a huge company behind. A small indepebdent team would have been chased by creditors well before reaching that sum, and possibly made bankrupt. That's the difference.
When you consider the global exposure the brand receives from participating and winning in Formula 1, it's a huge bargain.
I guess one key question is 'How many additional vehicles does Mercedes sell as a result of incurring their share of the expenditure?' The cost to Mercedes is rather less than the headline turnover, once contributions by Bernie and the other sponsors is deducted, but it is still a very significant sum, It's not as if the inventor of the automobile's company needs a lot of exposure!
+1 Why pour out 100% of your world advertising dollars to an agency, when you can enjoy the expsoure of F1 as well?
It cost Mercedes about $52 per road car sold last year - to put that number in perspective. It cost them an eight and a half minute commercial for the super bowl. Most of the increased costs come down to a lack of testing, instead, you hire hundreds of simulation experts if you want to win.
But how many cars would they have sold without this expenditure? how many extra cars did they sell because they went racing? Admitedly, part of many advertising budgets factors in 'reassurance' - helping existing buyers confirm to themselves that they made the right decision and will buy again - but Mercedes customers tend to be more loyal than most. It is the cost of extra sales that really matters.
Mercedes is still working to be a more relevant brand to the 30-45 age segment, exposure like F1 and other racing help with de-aging your brand. You can never know how many cars sold strictly due to being in F1, but the other benefit is greater exposure in many markets that might not otherwise attract marketing spend.
This is all too true and no doubt they are currently and constantly pouring over their data to try and get some reassurance that these 30-45 yr olds want cars like that ugly (sorry m fans!) low rung car they put out a few years ago. If this f1 success is enough to help light that fire it's worth it-but that's a lot of cash. I know I had zero interest last time I bought a dd bimmer Come to think of it, I don't think I personally know a Mercedes owner that can spell F1!! All jokes, theirs is a different target market in general
Have MB even leveraged their F1 success with actual showroom product? I know they have the AMG Black Series; but Lewis is HALF black.
Is that all? In that case, I am glad to have made a contribution to their success, although unknowingly.
No, in fact the McLaren road cars started being sold in numbers at the same tine that their F1 team faded into oblivion. I have vision of McLaren leaving F1 altogether in the distant future (10 or 20 years), and Ron Dennis and his shareholders concentrating on the road car side, once the production gets substantial. Ron Dennis is very passionate about the road car business, and let's be frank, it's increasingly profitable.
Absolutely. And Mercedes spend more than 4 Billion on R&D for their road cars in 2014: ? Mercedes-Benz Cars: R&D expenses 2011-2014 | Statistic The F1 team's <100 million for 2014 is small change in the grand scheme of things. All the best, Andrew.
These figures only demonstrate the disparity of resources between car manufacturers and private teams. Car manufacturers are pushing F1 beyong the reach or private teams; is that good?
The cost cutting model in F1 is a failure, IMO. But in this case, Mercedes will recoup the losses through their car sales. Plus, they get the marketing done at the same time. Pretty normal, IMO.
I dunno dude..... I'd bet that the "average" Merc buyer (not AMG or Black) couldn't tell an F1 car from an Indycar from a hole in the wall! F1's certainly not "harming" their image or marketing, and I'm sure is great for employee morale etc, but the old "win on Sunday, sell on Monday" days are long over IMO. Having said that, if F1 costs 'em a hundred bucks per car sold, and their R&D budget is as claimed, it's not much more than a piss in the ocean.......... Cheers, Ian PS - 'cept, we have to remember they hired Florian! Bet he didn't come cheap!
It would be essentially impossible to track all of the money flowing through F1. It would be far easier to track all of the money flowing through USA DOD (a good portion of which is secret, top secret, or even higher.)
