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Purchasing F1 technology: slowing down small teams

This year, Alfa Romeo is building its gearbox and rear suspension itself again. Because it's cheaper. The budget cap rules give the big teams a chance to slow down their clients.

It's the era of alliances. Many small teams have changed their tactics over the past ten years and also stocked up on other components from their engine suppliers: transmission, suspension, hydraulics, steering. Haas orders the full program from Ferrari. That came cheaper for the customer teams for a long time. Haas and Alfa Romeo went shopping at Ferrari, Aston Martin and Williams at Mercedes, Alpha Tauri at Red Bull.

The technology transfer allowed the small teams to focus mainly on the areas that bring lap times like aerodynamics. With the small disadvantage that taking over the entire rear area has technically restricted the engineers. They had to take what was on offer. Sauber has bought its way out of this bondage this year. In Hinwil, the gearbox housing and the rear axle are now built in-house again.

Penalty for buyers

This gives the Swiss racing team technical freedom. This was the only way the designers could switch from pullrod to pushrod in the rear and implement their preferred installation concept. Many claim that this newfound flexibility is also the secret behind why the Sauber C42 is on the weight limit and the other cars are not.

But technical self-determination is not even the main reason for the new approach, explains Technical Director Jan Monchaux. "That has mainly to do with the budget cap. Read the financial rules. The big manufacturers have made sure that you get a sum deducted as soon as you buy something from them. A penalty for the cost cap, so to speak."

In reducing the budget cap from the original $175 million to $145 million in year one and $140 million in year two, the factory teams insisted that customers be deducted from this sum the nominal development costs of purchased components. On the grounds that Ferrari, Mercedes and Red Bull first had to hire people to develop transmissions, chassis or hydraulics.

Excessive development grants

The FIA ​​asked the manufacturers about the development costs and used this to calculate an average value, which it deducted from the cost limit for the customer teams. Because they would have saved those development costs. Haas, for example, doesn't have $140 million to play this season, only $117 million.

Jan Monchaux only shows understanding for this rule up to a certain point. "The problem is the sum that the FIA ​​​​agreed with the teams. This is very high. So the nominal development costs. One could almost think that all teams develop exclusively in Switzerland.But there is no correction for living costs in the budget cap."

The salaries in Switzerland are 30 percent higher compared to a team of the same size in Italy or England. "So we have 30 percent less for the development of the car", calculates Monchaux.

"With the penalty of the nominal development costs, it was clear to us that the only way for us to design the transmission and rear axle ourselves is because we no longer have this penalty. Building it yourself doesn't matter as much as FIA and the big teams claim." Conclusion: The big teams made a conscious effort to set the total as high as possible to put the small teams at a disadvantage.

Two Third cheaper

In the case of the transmission and rear axle, around ten million US dollars are estimated according to the FIA ​​shopping list. If Hinwil went shopping in Maranello, the team would only have 130 million instead of 140 million. "That's too much for us. Assume that you can do it for a little over a third if you do it yourself. Even in Switzerland. That's why it's a big saving for us," explains Monchaux.

Despite the disadvantage for the small teams, who are not able to build all the components themselves, the big ones are already begging for an increase in the cost cap brought high inflation rates into play. Monchaux advises to stick to the rules of the game as they are written in the financial regulations of the FIA. "I believe that there is a correction factor for inflation. It's based on the inflation rate of the G7 countries."

Last time the inflation rate was adjusted, there were a few countries in the G7 that had hardly any inflation. For example Japan. "Despite a sharp increase in Europe, England , France, Germany and Co. was not enough on average to justify an increase in the budget cap." The small teams see it calmly. For the big ones, this heralds another round of savings.


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