Why Mercedes "never seriously considered" waving goodbye to F1

Daimler's dilution of its shareholding in the Mercedes Formula 1 team has paved the way to speculation that it is the first step of an exit strategy.

The company recently offloaded 27 per cent of its shareholding to become a one-third equal partner alongside Mercedes F1 CEO and team principal Toto Wolff and INEOS, the chemicals giant owned by British billionaire Sir Jim Ratcliffe.

Daimler chairman Ola Källenius has made clear, however, that the brand took stock of what he has described as "the four pillars" to determine its position on F1 which he insists remains a valuable sporting product in the company's long-term plans.

Dismissing recent suggestions of Daimler withdrawing from F1 completely, Källenius said: “I know there was speculation in the press but we never seriously considered pulling out because it is such a strong part of our heritage and we are a brand that was literally born on the race track."

Despite this, Källenius explained the Mercedes board did concoct a litmus test that removes the "emotional connection to the sport" and can also be used in future years to look at its participation from a "rational point of view".

“We came up with four pillars that you need to answer, in our view, with a yes [if you are to continue as a manufacturer]," assessed Källenius.

“The number one is, how is the show? Is the show good and what about the fanbase?

"What we have particularly seen in the latest year through social media is really an explosion in the reach and the best news is that the younger fans are coming.

"So the 15 to 30-year-olds, through e-sports, through social media, through a great show, and I don’t know a motorsport spectacle that is better than Formula 1. That was question number one, it is answered with yes.

“Number two is we have made a very clear commitment for Daimler and Mercedes to go into a CO2 neutral future. With ambition for 2039 with passenger cars, we want to achieve a carbon-neutral position in three product lifecycles inside 20 years.

“There has to be a credible path towards sustainable motorsport as well. I have spoken to Greg Maffei [Liberty Media CEO] about this, as well as those at FOM who very much agree with it, and we put out one manifesto for the team earlier this year - how we are going to take Mercedes Formula 1 team towards CO2 neutrality.

“Technology is an important part of that. It’s a hybrid formula today. I can see the electrical piece of it decreasing.

“Yes, I can see it being a testing ground for lower carbon or no carbon fuels which will play some role in the world going carbon neutral eventually, so yes, that’s second.

“Can you credibly make the sport more sustainable? Yes, and I believe we are certainly committed to it."

Mercedes has taken both the constructors' and drivers' titles in each of the past seven years, with Lewis Hamilton winning six of the latter, and Nico Rosberg the other in 2016.

This continual period of success has placed Mercedes in an incredibly strong position financially compared to most others on the grid.

Källenius, however, has declared that the introduction of a budget cap played a part in the decision to remain as it allows teams to become "sports franchises".

Källenius continued: “The third thing was financial sustainability and costs. The cost cap helps and we were an advocate for it. It makes the economical proposition better, so I think we are ticking that box as well.

“The fourth one is, does it always have to be a cost centre [or] can it be a sports franchise like a football club or an American football club like in the U.S?

“We can see now that people are starting to look at this more like sports franchises.

"Getting a great and strong professional partner that knows professional sport like INEOS into the picture, the fact that someone like Jim makes the decision to join forces with us, I think really reinforces that fourth pillar.

“With those four pillars, to me the decision is clear. We’re in.”

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