In 2021 Formula 1 will introduce a $145m budget cap. Mercedes team boss Toto Wolff explains how the team will adapt to, and even benefit from the new rule.
The spending cap has been in the works for some time now, and it will finally be introduced in 2021. Toto Wolff explains he already has experience in working with limited budgets.
“My experience in my personal business life was that sometimes going through a zero-budgeting approach shows you how much you have actually left on the table,” the Austrian told Autosport.
“And how much you have carried over from year to year, that was cost of what could have been avoided by simply streamlining processes and the organisation overall.
“Performing in the F1 world is not only down to money. You can have the most money, but not perform how you should. And we have seen examples of that in the past.”
With the introduction of a new restriction on wind tunnel time, teams will have to be more mindful than ever on how they spend their resources.
“We have never wasted [resources], because for us prioritising has always been key to how we function, rather than to trying to do A, or A and B.
“We have always approached with A and/or B, because you simply put more emphasis on what you think will bring you more performance.
“But the cost cap has brought that to a new level, because we were not operating before within a regulatory cost constraint. And that means you need to understand your processes.
“Every single item is costed down, or evaluated [as to] what the costs are. And you need to trim how you operate.
“But we believe that this is a performance advantage, because it has obliged us to rethink what we do, and how we do it.
“And it will mean that there’s even more emphasis and focus on the areas that, we believe, bring the best performance.”
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Considering that significant rule changes and completely new car concepts will be introduced in 2022, it will be even more crucial to decide how to divide your resources between developing this year’s car and focusing on next year’s machine.
“This is a question you need to find solutions for every single year. How do you balance the current car and the development time you want to give it versus next year’s car?
“And for 2022 it becomes an even more critical topic, because of the scope of changes. And there will be teams that will very much focus on 2022 from early on, and other teams that will see great opportunity for the 2021 World Championship.
“And for us, it will be crucial to take the right view on how we want to balance development for next year. It is subject to discussions every week.”
Teams will also have to take into account the fact that the budget cap will drop from $145m to $140m in 2022, and then to $135m in 2023. With that in mind, can Mercedes and other top team keep their advantage over the rest of the field?
“The budget cap is extremely important in my opinion. Because the costs were escalating over the last 10-15 years, and it became unsustainable.
“And in that way, we are now operating in the same financial framework. And it becomes exciting, because there will not be many differences in terms of spending between the teams.
“We love the challenge. We have taken it on, and it is at times very painful because all your processes need to be adapted in the end to achieve more efficiency.
“We found out during the process that actually efficiency means performance. The group that has worked around the project did a fantastic job.
“And I believe we’re in a good in a good position to extract the most from the limited resource that is available,” concluded Wolff.