Merc to spend ₹3500 cr in pursuit of 4th title

The most dominant team of the past three years, Mercedes AMG, will spend just over $700 million chasing a fourth straight world title this season, which starts with Sunday’s Australian Grand Prix at Albert Park in Melbourne, according to a Sydney Morning Herald report.

Even though big budgets and huge spending cannot guarantee the title defense was evident at Albert Park in Melbourne on Sunday, when Sebastian Vettel pushed the Mercedes duo of Lewis Hemilton and Valtteri Bottas to the second and third position respectively.

Mercedes team boss Toto Wolff has revealed the staggering spend in his guest appearance at the Australian Motor Sport Hall Of Fame induction ceremony at the Melbourne Convention Centre last week.

Formula One is undoubtedly the most expensive sport in the world, with leading teams spending Rs 2500 crore rupees or more a year chasing grand prix glory. Or more. Much more.

The other top teams, Ferrari and Red Bull Racing, aren’t far behind the tri-star squad, while the annual budgets of middle-order teams like Williams, Toro Rosso, Force India and Renault are in the low hundreds of millions.

F1 makes a perceived rich person’s sport like America’s Cup yacht racing, which costs about ₹500 million for a multi-year campaign, seem cheap. Even the poorest F1 team operates on an annual budget of about ₹250 crore – with commensurately meagre results.

It is believed that big money buys big success in F1, especially when major technical rule changes are introduced. The Melbourne GP has seen the racing debut of the new big-tyred beasts that are the fastest F1 cars ever in a dramatic revamp that favours the teams with the deepest pockets, which fund the best technical resources. Add some of the best brains in the business, and two of the very best drivers, and Mercedes’ lead in the spending race should translate into continued success on the track.

Mercedes AMG has won 51 of 59 F1 races in the past three years and looks poised to set the pace again this year in spite of missing out on the first opportunity. There may be more competition from Ferrari and Daniel Ricciardo-led Red Bull.

Britain’s Lewis Hamilton, arguably F1’s best driver, beat his Silver Arrows teammate Nico Rosberg in tight title fights in 2014 and ’15, while Rosberg turned the tables last year in a Mercedes rout. Together, they won 19 of 21 races and shared 20 pole positions, making their Mercedes AMG W07 Hybrid racer statistically the most successful car in F1 history. Mercedes has been formidable at Albert Park since its reign began with the introduction of the muted 1.6-litre turbocharged V6 petrol-electric hybrid power trains three years ago, with Rosberg’s wins in 2014 and ’16 sandwiching Hamilton’s success in ’15.

Rosberg promptly quit after finally conquering Hamilton, replaced this season by untapped talent Valtteri Bottas. They are backed by the biggest and richest operation in F1, rivalled in resources only by iconic Italian squad Ferrari.

Like Ferrari, Mercedes AMG builds both its cars and engines, although unlike the scarlet scuderia, the silver outfit – actually, its primary livery colour is metallic grey – doesn’t operate under one roof.

German majority-owned, British-based Mercedes AMG Petronas F1 houses its racing team at Brackley, not far from the British GP track at Silverstone, and its engine-building unit in Brixton, about 45 minutes away. They are on the opposite sides of Northampton, which is 108 kilometres north-west of London in the East Midlands area of England. Between them, the race team and Mercedes AMG High Performance Power trains employ 1500 people, which is probably a third more than Ferrari’s F1 head count. It’s a huge operation that, as Wolff revealed in his off-the-cuff Australian Motor Sport Hall Of Fame address, will require more than ₹3500 crore to field Mercedes’ pair of W08 EQ Power+ racers this year.

Scuderia Ferrari spends about ₹2800 crore and Red Bull Racing about ₹2100 crore.

According to Wolff, Mercedes AMG’s F1 spend is a bargain because it generates three billion euros worth of exposure for the Mercedes-Benz and AMG brands.

In addition to Mercedes’ support, the team attracts about ₹ 700 crore in sponsorship, and last year earned ₹1100 crore in F1 prize money and bonuses on a smaller spend than this year’s rules change-driven budget blow-out.

In F1 terms, the German prestige carmaker’s ultimate annual investment is small beer if the claim for boosting brand awareness and it a sportier image is to be believed. Mind you, Mercedes had been banging away at F1 for more than two decades in the modern era, following its glory original Silver Arrows periods in the 1930s and 1954-55 – so-called because its racers were run with bare metal bodywork to save weight.

It returned as engine supplier to Swiss team Sauber in 1994 before switching to a costly, but relatively unsuccessful, partnership with McLaren from 1995-2015. Mercedes bought the ex-Honda 2009 world championship-winning Brawn team and has been running it since 2010, originally enticing Michael Schumacher to make a comeback alongside Nico Rosberg.

Lewis Hamilton was hired to replace Schumacher in 2012, with his defection from McLaren brokered by F1 legend Niki Lauda. The outspoken triple world champion is chairman of Mercedes AMG F1, as well as owning 10 per cent of the team.

Lauda, 68, is a key adviser to fellow Austrian Wolff, a successful investor and former racing driver who took over the running of the team in 2013. Wolff, 45, owns 30 per cent, leaving Mercedes-Benz with a 60 per cent controlling stake. Wolff and Lauda are credited with transforming the team into the latest F1 benchmark, taking over from Red Bull Racing – owned and underwritten by the energy drink giant – which won the previous four world championships with Sebastian Vettel, now with Ferrari.

Mercedes’ odd-couple F1 team bosses are contracted to lead the team until the end of 2020.