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VW Has Plans to Enter Formula One

The F1 industry is awash with rumours of Volkswagen's imminent entry into the fray

Apparently, the German car giant is on the verge of finalising a deal to buy the Red Bull team. Under the terms of the proposed agreement, VW would buy the F1 racing team, whose cars would then use a VW engine. Red Bull would continue with its involvement in the team by being a major sponsor - perhaps even keeping the distinctive Red Bull livery on the cars. Apparently, though, the VW engine will not be immediately ready and the Red Bull/VW team will use Ferrari engines until the VW power plant is ready, probably in time for the 2018 season. Their engine deal with current suppliers, Renault, is due to end at the end of this season, after both parties decided to end the contract one year early.
According to industry sources, VW and Red Bull have been talking about a deal for a year or more, and the main points of the sale have now been agreed. The arrangement will see VW enter the sport as the fourth big car-maker, while Red Bull will remain involved through their sponsorship agreement, hoping to benefit from the high profile enjoyed by participants in F1. Although the deal is being negotiated by VW, it is not yet certain which of the company's car marques will be used in the F1 team. The company has a few alternatives, as they own brands such as Audi, Bentley, Bugatti, Lamborghini and Porsche. It is perhaps less likely that they will use one of their Seat or Skoda brands, and the smart money seems to be on Audi being the name that will adorn the VW F1 cars. 
Dietrich Mateschitz, boss of Red Bull, has already announced that his F1 team's deal with Renault is to be concluded a year early. He indicated that an interim deal with Ferrari was likely but said that the terms of any deal had not yet been concluded. The deal with VW would be a natural progression for the two companies, as they are already partners in the world rallying championship. It is reported that Mateschitz was close to agreeing a deal for the F1 team with Martin Winterkorn, chairman of VW, as early as last year. However, the deal was vetoed by VW's then chairman, Ferdinand Piech. Piech and Winterkorn fought a bitter battle for control of VW, with Winterkorn eventually emerging as the winner and Piech resigning in April this year. That has left Winterkorn clear to complete the deal for Red Bull's F1 team. 
Red Bull F1 executive Helmut Marko bemoaned his team's lack of a competitive engine earlier this year, when he said that his team would be out of the competition very soon if a deal was not done with a supplier like Audi. Conversely, other senior sources at Red Bull have consistently insisted that there was no deal on the table or even talks with VW or Audi. As recently as June this year, Christian Horner, team principal at Red Bull, said that there had been no discussions with anyone at the VW Group. Just this week, Helmut Marko, speaking at the Singapore Grand Prix, repeated his prediction that Red Bull would quit Formula One if they could not find a competitive engine. 
The current F1 season sees Mercedes, Honda, Renault and Ferrari as the four big car-makers involved in F1. Honda have returned to the sport as an engine supplier to McLaren, with Mercedes entering their own team as well as supplying engines to Force India, Lotus and Williams. Renault supply engines to Toro Rosso and, for the moment at least, Red Bull. Ferrari competes with its own F1 team. It has also been a tough time for smaller teams, with the Caterham and Marussia entering administration in 2014.

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