Mercedes to cut engine costs by half

"Currently, an engine lease is something like $20m to $25m a year," said Haug. "We will offer engines in the future, starting next year, for $10m. It's easier for a team to pay $10m than to pay $25m and we are happy to talk to those teams that are interested for next year."

Haug also indicated that other engine suppliers would be likely to follow suit by cutting their prices next year: "This is a very constructive process from our side. We made the suggestion and we also spoke to other manufacturers," he said.

Only Ferrari and Cosworth currently supply more than one team, with Ferrari leasing its powerplant to Sauber while Ford supplies its Cosworth engines to Jaguar, Jordan and Minardi. Both suppliers keep one works team (Ferrari and Jaguar Racing) exclusively outfittied with the latest spec engines, while offering the year-old specification on the open market.