2022 - McLaren Formula 1 Team

[Mchamilton]

All I ask is that the McLaren name/identity/heritage remain. It would be awful if the deal goes through and there’s a change in the name. I like how Zak’s management has leveraged on McLaren’s history and theme. There’s more homage being paid to Bruce, the papaya history. I just like the direction that they’re going in. There’s a recognition that McLaren fans all over are from different generations and eras.

Well Said Sir... Agree 100%

Why would Audi pay 800 mil pounds just to change the McLaren name to audi. It doesn't make sense. The Mclaren brand is so strong. They can use the same amount of money and develop 35 new supercar models. When VAG group bought other brands they never changed any name of the brands (škoda, seat, bugatti, lamborghini,...) The McLaren Audi name would be just fine. Just look at Honda.

£22m per supercar? Thats a bit ambitious

[torpor]

That‘s true. But that sounds worse than it is. You cant‘t compare an international corporation with a private household. Dept is just cheaper than equity capital. And building cars is very capital-intensive.
Volkswagen tops this list followed by – among other not car-related companies – Daimler AG (151), Toyota Motor Corp. (138), Ford Motor Company (122) and BMW (115 billion dollars). So they are in good company with some of the most successful car manufacturers.

[JPower]

Zak says McLaren infrastructure not quite ready for title bid yet

https://racer.com/2022/01/15/infrastru ... rown-says/

[mwillems]

I don't know if I'm in the minority or not, but I actually find the idea of VW Group buying the entire McLaren company and entering F1 as McLaren Audi very appealing.

Though as an Audi driving McLaren fan, maybe I'm a little bit biased

I don’t like the idea that much, I’m afraid that it may make them lose their individuality and their essence as a privateer team and their individuality as a car manufacturer… But it won’t be surprising if the offer is good enough for Mumtakalat.

My biggest concern is mainly with the future of the team in F1 if they are bought, in the past the VW Group hasn’t hesitated to withdraw from competitions, such as both Audi and Porsche leaving WEC, Audi just left Formula E… While for someone such as a Private Equity Group, the Formula 1 Team is an essential part of McLaren, for someone such as VW Group, it may not be as important… It could also be the end of McLaren in F1 if they would decide to simply rename the team “Audi F1” if some accountant thinks that it brings more value to the group.

F1 is now much cheaper and the team will probably be self sufficient, particularly if they bring in Salary caps of some description too. I'm not sure how much the "cost" aspect applies to the VW group, if anything it is the best time for them to invest unfortunately. Mclaren is struggling but will almost certainly recover because of the brand value and offer VW good returns, whilst the F1 team pays for itself almost. If it requires money going forward I think you'll be looking at just engine development in the future. Would Audi buy the team now when they are forced to run a Merc engine though. Would that be a problem? They'd have to run another manufacturers engine for a few years yet so... who knows.

[proteus]

That‘s true. But that sounds worse than it is. You cant‘t compare an international corporation with a private household. Dept is just cheaper than equity capital. And building cars is very capital-intensive.
Volkswagen tops this list followed by – among other not car-related companies – Daimler AG (151), Toyota Motor Corp. (138), Ford Motor Company (122) and BMW (115 billion dollars). So they are in good company with some of the most successful car manufacturers.

This is nothing to be proud of. For either of them.

[SmallSoldier]

I don't know if I'm in the minority or not, but I actually find the idea of VW Group buying the entire McLaren company and entering F1 as McLaren Audi very appealing.

Though as an Audi driving McLaren fan, maybe I'm a little bit biased

I don’t like the idea that much, I’m afraid that it may make them lose their individuality and their essence as a privateer team and their individuality as a car manufacturer… But it won’t be surprising if the offer is good enough for Mumtakalat.

My biggest concern is mainly with the future of the team in F1 if they are bought, in the past the VW Group hasn’t hesitated to withdraw from competitions, such as both Audi and Porsche leaving WEC, Audi just left Formula E… While for someone such as a Private Equity Group, the Formula 1 Team is an essential part of McLaren, for someone such as VW Group, it may not be as important… It could also be the end of McLaren in F1 if they would decide to simply rename the team “Audi F1” if some accountant thinks that it brings more value to the group.

F1 is now much cheaper and the team will probably be self sufficient, particularly if they bring in Salary caps of some description too. I'm not sure how much the "cost" aspect applies to the VW group, if anything it is the best time for them to invest unfortunately. Mclaren is struggling but will almost certainly recover because of the brand value and offer VW good returns, whilst the F1 team pays for itself almost. If it requires money going forward I think you'll be looking at just engine development in the future. Would Audi buy the team now when they are forced to run a Merc engine though. Would that be a problem? They'd have to run another manufacturers engine for a few years yet so... who knows.

Very valid point, although they might end up reaching an agreement to “label” the Mercedes the PU if it comes to that (like RBR labeling the Renault PU as Tag Heuer)… The other aspect is that they can buy McLaren and not necessarily rename anything, so it would still be McLaren F1 Team (the agreement with Mercedes is only for PU supply, there is no marketing / naming agreements in place) and not make a change until 2026, on the mean time they can run the automotive division (and learn a lot about the current PU’s)

[SmallSoldier]

That‘s true. But that sounds worse than it is. You cant‘t compare an international corporation with a private household. Dept is just cheaper than equity capital. And building cars is very capital-intensive.
Volkswagen tops this list followed by – among other not car-related companies – Daimler AG (151), Toyota Motor Corp. (138), Ford Motor Company (122) and BMW (115 billion dollars). So they are in good company with some of the most successful car manufacturers.

This is nothing to be proud of. For either of them.

Debt is not a sign of Financial problems… It all depends on your return on that debt.

As an example, interest rates are very low… If you can acquire debt at a low interest rate and invest it with a higher yield / return, it isn’t a problem… I refinance my house at 2.5%, took equity out of the house at that rate and invested it in yield nots creating 9.75%… At the end, I’m using my debt to create money (7.25%) while been able to pay my covenants/commitments to the bank.

[Mostlyeels]

That‘s true. But that sounds worse than it is. You cant‘t compare an international corporation with a private household. Dept is just cheaper than equity capital. And building cars is very capital-intensive.
Volkswagen tops this list followed by – among other not car-related companies – Daimler AG (151), Toyota Motor Corp. (138), Ford Motor Company (122) and BMW (115 billion dollars). So they are in good company with some of the most successful car manufacturers.

This is nothing to be proud of. For either of them.

Debt is not a sign of Financial problems… It all depends on your return on that debt.

Exactly, or Return on Equity (ROE) for publicly-traded companies. VW group looks pretty reasonable for a car company (~13.9%, comparable to Toyota, and much higher than Ford).

[proteus]

That‘s true. But that sounds worse than it is. You cant‘t compare an international corporation with a private household. Dept is just cheaper than equity capital. And building cars is very capital-intensive.
Volkswagen tops this list followed by – among other not car-related companies – Daimler AG (151), Toyota Motor Corp. (138), Ford Motor Company (122) and BMW (115 billion dollars). So they are in good company with some of the most successful car manufacturers.

This is nothing to be proud of. For either of them.

Debt is not a sign of Financial problems… It all depends on your return on that debt.

As an example, interest rates are very low… If you can acquire debt at a low interest rate and invest it with a higher yield / return, it isn’t a problem… I refinance my house at 2.5%, took equity out of the house at that rate and invested it in yield nots creating 9.75%… At the end, I’m using my debt to create money (7.25%) while been able to pay my covenants/commitments to the bank.

I allways bought everything with money i had, so i do not have experience with loans. But still 192billion looks a lot to me and feels like walking on thin ice. You never know what might happen.

[djos]

When most houses cost 20x the average income, most ppl need to borrow a lot of money to buy their house.

Tbh given how cheap money is ATM, you’d be stupid not to borrow to complete big upgrades / repairs to your house or use it to buy a car (assuming you need a new one).

[Jolle]

For WV, against that 190 bilion in debt, there is assets of almost 500 billion. The numbers are huge and beyond anything we can imagine, but looking at it from a financial perspective, very healthy.

McLaren last year (and why Brown also said in interviews that they were almost out of business last year) has, from memory, around 3 billion in debt but only around 2.5 billion ins assets.

[windy1603]

Faster Higher Further proves a good insight into VAG and their "values"

Sent from my SM-T830 using Tapatalk

[Jolle]

Faster Higher Further proves a good insight into VAG and their "values"

Sent from my SM-T830 using Tapatalk

It's "Faster Higher Father" and it's only their second worst scandal after "Faster Higher Fuhrer" back in the thirties.

[SmallSoldier]

This is nothing to be proud of. For either of them.

Debt is not a sign of Financial problems… It all depends on your return on that debt.

As an example, interest rates are very low… If you can acquire debt at a low interest rate and invest it with a higher yield / return, it isn’t a problem… I refinance my house at 2.5%, took equity out of the house at that rate and invested it in yield nots creating 9.75%… At the end, I’m using my debt to create money (7.25%) while been able to pay my covenants/commitments to the bank.

I allways bought everything with money i had, so i do not have experience with loans. But still 192billion looks a lot to me and feels like walking on thin ice. You never know what might happen.

We are going way off-topic (I guess the mods are been a bit lenient since there we are still in “winter mode”)… Paying everything “cash” is not a bad idea and I’m sure it helps sleep well at night, but debt isn’t bad depending on what you use it for… The problem is when people use debt to buy assets that depreciate in value (that won’t create a return or profit), for example, buying a car, or a phone or any other item that loses value as soon as it stops been “new”… On the other hand, if you use debt to create value, that’s a different story and it can be a very smart strategy to accelerate growth (for example, buying a house)… If I would have waited to have the cash to pay for my house “debt free”, I would probably still be either renting or living with my parents

In regards to the amount (192 billion), it is all a matter of perspective… For us mere mortals, 192 billion is a ridiculous amount of money, for a corporation such a VW Group, it isn’t so… If we look at their operating profit in 2019, it was 17+ billion, roughly 8% of their debt, on that basis the 192 billion isn’t as bad a number as it seems to be on face value.

[Stu]

Please draw a line under the previous quotes, if you really feel the need to talk financials in relation to VW/Audi/Porsche re-entering F1, please start a new thread.

Getting way off-topic…

It is 2022 McLaren Team thread!!