At a press conference in Munich Wednesday morning, BMW's chairman, Norbert Reithofer, described the decision as a “strategic realignment” and said the company, which has had a long Formula One history, would continue to help develop technology and young drivers for motor sports, but would no longer field a team.
“Of course, this was a difficult decision for us. But it's a resolute step in view of our company's strategic realignment,” Reithofer said at the press conference.
The surprise decision comes as the company said the racing team's performance did not meet its expectations. But with luxury car sales hurt by the recession, BMW was also under pressure to cut costs.
Last quarter, the carmaker lost €152 million due to falling car sales after profits plummeted 89.5 percent in 2008 compared to 2007. Analysts cited by Bloomberg News said the Formula One team probably cost BMW around €200 million per year. The daily Bild reported that up to 750 jobs at BMW could be cut due to the exit from racing.
Motor racing's governing body, the FIA, said it regretted the German team's decision and hoped the sport had seen the last departure of a major manufacturer.
"The FIA regrets the announcement of BMW's intended withdrawal from Formula One but is not surprised by it," the FIA said in a statement. "Car manufacturers cannot be expected to continue to pour large sums of money into Formula One when their survival depends on redundancies, plant closures and the support of the taxpayer."
Though BMW is leaving Formula One, it's not entirely leaving auto sports. It will continue to field a motorcycle racing team and take part in the American Le Mans competitions as well as develop engines for racing and work on more fuel-efficient racing vehicles.
The financial crisis and recession have put pressure on many carmakers that support racing. In December, Honda announced it was dropping out of Formula One racing and Bild reported that Toyota is also considering quitting the sport.