Jaguar helps F1 motor into new era

The new Jaguar R3 with drivers Eddie Irvine (left) and Pedro de la Rosa

By CNN's Graham Jones

MILTON KEYNES, England (CNN) -- The launch of Jaguar's adventurous new R3 2002 Challenger highlights a new driving force in the slick world of Formula 1 motor racing.

For team boss Niki Lauda's aerodynamically honed new thoroughbred is very much the symbol of a new era.

The sleek, powerful cars and technical know-how for the sport used to be in the hands of independent specialist racing teams like that of Frank Williams.

But now it is the top motor manufacturers who are starting to dominate the grid.

Jaguar, F1 flagship for car giant Ford will line up at the Australian Grand Prix which starts the new season on March 3 with representatives from Fiat, BMW, Renault, two teams representing Honda and, for the first time, a team from Toyota.

Ford owns Jaguar, Fiat owns Ferrari, DaimlerChrysler's Mercedes is in partnership with McLaren, BMW supplies Williams' engines and Renault will use its own name this year the team it owns, formerly Benetton.

Jaguar, who entered F1 in 2000, and Toyota, joining for 2002, are using parts exclusively from their own manufacture and their racing teams will be test beds for production parts.

Such is the integration for research and development purposes that teams of Ford mechanics will be attached to the Jaguar team as part of a company training programme.

Jaguar's new sponsor Castrol (owned by BP) announced on Friday came with an across-products deal for Ford including Jaguar Cars, Land Rover and Volvo.

Irvine, left and de la Rosa believe they have a much better chance this year

"Car makers have never had such a presence in Formula 1," says Nav Sidhu, communication and public affairs manager for Jaguar Racing.

"It's not just supplying an engine any more.

"Within 20 years Formula 1 has moved from being a hobby for men like Frank Williams to a huge global business."

The muscle starting to be weighed by the automotive big boys was shown last year when it was revealed that DaimlerChrysler, BMW, Ford, Renault and Fiat (Ferrari) had invited Honda and Toyota to join them in setting up a breakaway motor racing organisation to run their own Grand Prix series from 2008.

"The threat is certainly real," Pablo Abella, head of business development at the unofficial Web site formula1.com told CNN.

"There are three to four years to work out a deal and a lot of posturing is going on.

"Their main complaint is that the current deal does not give them a sufficient cut of the revenues. They get nothing from trackside advertising, concession stands or promotions and just 47 percent of the TV revenue.

"If the carmakers do not come to an agreement in the next three or four years with the current rights holders, like the Kirch group, who own the TV rights, in our view the breakaway will go ahead."

The end of cigarette advertising from 2006 has certainly being concentrating minds in Formula 1.

With main sponsors putting up as much as $90 million a season to have their products' name on the cars, across the sport, it is a lot of income to lose.

But, says Abella "budgets will be much tighter this year."

The sport is to lose millions in tobacco sponsorship from 2006

As well as cigarette brands withdrawing in stages - some have already done so -- there has been a world advertising downturn.

And then there has been the knock-on effects of September 11, not least for one F1 sponsor badly hit, Nortel.

But it is the smaller teams, not the Ferraris of this world, who are really feeling the squeeze.

Frenchman Alain Prost has until January 15 to find around $75 million of funding to keep his Prost Grand Prix team -- which employs 200 at Guyancourt near Paris but is now in receivership -- in place.

Of this he needs around $65 million in sponsorship.

"There is a real problem today, especially when you know that advertising budgets have been cut by 40 percent," he says.

"Formula 1 needs teams like us and the public is always going to feel more sympathy for us than the huge car makers," he says.

"The revenues from television rights should be distributed differently to give a better chance to teams like ours," he says.

"The sponsors keep hearing from the media that only the large car makers will make it, so naturally they do not come to us."

Tim Brady of Zenith Alliance, who has been involved in Toyota's entry into F1, says it makes sense for the carmakers to become more involved.

"The way it will go is that every team will be a car manufacturer.

"It makes more sense for the car companies, if they are to be involved in an F1 team, to be in control of it."