Why did General Motors choose Formula 1?

General Motors, a leading car brand primarily known for its presence in the US market, has decided to enter the world of Formula 1 racing, which has traditionally been focused on the European market.

This move may not have been a natural choice for the company, but they have decided to make the jump through Andretti’s newly formed team.

For many years, Formula 1 was not widely followed in the Americas, making it less of a priority for American companies like General Motors to participate in it from a marketing standpoint.

However, as Formula 1 has grown to become a global sport with a significant following in the United States, and with the addition of three Grand Prix events to be held in the US in 2023, it made sense for GM to participate in F1. Andretti, a respected motorsport icon, requested to participate and GM decided to take the opportunity.

GM’s management has stated that the company had been considering entering Formula 1 for some time, but external factors had prevented it from happening.

Recently, the US government had to provide financial assistance to GM and other American car manufacturers, making it difficult to justify investing in an expensive endeavor like Formula 1 at the same time. It would not have been well received by politicians and the general public.

General Motors, currently being the third-largest automaker worldwide, behind Toyota and Volkswagen Group, was open to listen when Michael Andretti approached them with a partnership opportunity.

Though they were not actively seeking the opportunity, General Motors President Mark Reuss was excited about it when presented with it.

General Motors was presented with an offer that was hard to turn down. Andretti offered the use of a new, advanced manufacturing facility on US soil and GM would not have to establish a separate division to develop its own power unit as Andretti would purchase it from Alpine.

GM would only need to provide funding for the Alpine engines to carry the GM’s brand name, in this case Cadillac. This was a mutually beneficial arrangement for General Motors as it allows them to participate in Formula 1 without incurring significant cost and manpower.

However, Formula 1 is also shifting towards a direction where major car brands compete by using self-developed equipment. Companies like Mercedes, Alpine, Ferrari and soon Red Bull Racing will develop their cars almost entirely in-house.

There are also teams that purchase equipment from other teams, which have established themselves in Formula 1 in recent years, these are also multi-million dollar companies.

The current Formula 1 teams are not eager to share their revenue with a newcomer like Andretti, which has only the backing of a big brand on paper.

GM will be limited to sponsorship, similar to Alfa Romeo with Sauber, rather than developing their own car or power unit. GM has not ruled out the possibility of developing its own F1 cars in the future. This commitment could win over the skepticism of Formula 1 officials.

It remains uncertain if Andretti Cadillac will be granted entry into Formula 1 in the near future, as negotiations between the FIA, FOM, teams and Andretti Cadillac are ongoing.

Despite Andretti having a strong business case with the involvement of General Motors, it is uncertain if it will be accepted by the other parties involved. Regardless, General Motors has little to lose in this situation.

Why did General Motors choose Formula 1? Why did General Motors choose Formula 1?

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