Automobile clans gather in Detroit

Sunday marks the opening of the annual North American Auto Show in Detroit, Michigan, and the industry's biggest annual gathering - at which a total of 45 automobile manufacturers will be represented - is likely to see some important gatherings of the major executives in the business. The industry is currently not doing well because of the uncertain world economy and the fact that the industry is still producing too many vehicles for the market. This has led to pricing being dropped to sell the cars but profits are not being made and the pressure is on from investors improve performance and cut costs.

This has had less of an effect on Formula 1 than might be expected because the luxury car markets are holding up well and thus investment in the sport can be justified as they help to drive sales of the more profitable top-of-the-range cars. Competition in that market is increasing as other manufacturers try to muscle into the profitable sector and the need for success in F1 becomes more important. This is currently driving up the costs in F1 and there are fears that if the current trend continues there will only be a handful of automobile manufacturers left in F1 within a few years. There are fears that this will lead to a situation where there will not be enough cars in F1 to keep up public interest with the result that the sport will lose viewers and public interest.

This debate is one which will be taken up when the teams gather for a meeting with FIA boss Max Mosley on January 15. The agenda for this meeting is yet to be revealed but it is anticipated that the FIA will be looking for cost-cutting measures in the immediate future. The teams are planning a pre-meeting gathering to discuss their position but as they are rarely able to agree on any specific cost-cutting measures it is unlikely that they will be able to offer the FIA any positive ideas. It remains to be seen what the FIA is planning but we expect there to be fireworks at the meeting.

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