Analysis

Why F1 is such a good deal for Alfa Romeo

As the Volkswagen Group finalises its plans to join the Formula 1 grid in 2026, its bosses could be forgiven for casting an envious eye on rivals Alfa Romeo.

Robert Kubica, Alfa Romeo C42

The Italian brand has had a presence in the sport as a sponsor of Sauber since 2018, and from 2019 the team has been fully named after it. And yet, in essence, the arrangement is simply a sponsorship deal that takes advantage of the "family" relationship with power unit and gearbox supplier Ferrari.

As such, it represents a remarkably good deal for Alfa, as the manufacturer doesn't carry the burden of having to fund a power unit programme, or of owning a team, and all the expense that entails.

It's been done before: Red Bull Racing had title sponsorship from Infiniti and Aston Martin, giving both marques a cut price presence at the top of the sport.

VW will be approaching it very differently.

Porsche looks set to fund and brand the new Red Bull Powertrains engine, while Audi plans to buy a team that will become its works entry, while at the same time running a separate engine programme from Germany. Overall, it's going to be a very expensive exercise.

Meanwhile, Alfa Romeo, which is set to announce a decision on renewing its relationship with Sauber in July, is generating a high profile for a much more modest spend.

Carlos Tavares, CEO of the Stellantis Group that owns Alfa Romeo and a string of other brands, makes no apologies about the way the deal works – and he refutes any suggestion that perhaps Alfa should be more directly involved, and perhaps take the plunge and buy the Swiss team.

"Today I have a strong partnership," he says. "It is working. The team is called Alfa Romeo F1 team. And I don't think it would be fair to criticise the fact that we have a strong partnership.

"Why should we criticise the fact that we have a strong partnership? Why should we think that there is only one way to be in F1, which is having a team? What's the benefit?

"The benefit that we want for the motorsports fans is hard racing on the track. That's what they want to see. Overtaking, late braking, tyre wear management etc. So what I would respectfully challenge is the vision where there is only one way to be in F1. And I would like to ask then what's wrong about having a strong partnership in a team called Alfa Romeo F1 team?

"If it works, if the team is motivated, if the employees are excited about what they are doing, if the results are improving, if the drivers say the car is better and better, if you see it on the results, if we are here to discuss about it, it's because it works.

Valtteri Bottas, Alfa Romeo C42

Valtteri Bottas, Alfa Romeo C42

Photo by: Carl Bingham / Motorsport Images

"So we should open our minds to the fact that the business models of being present in F1 are more than one, maybe two, maybe three, maybe four? I don't know. So that's my answer to you.

"But I understand where the speculation is. But my frank and sincere answer of somebody who has been in motorsports for more than 40 years now is that there may be eventually more than one way and even more than one successful way to be present in F1."

Alfa Romeo's involvement with Sauber pre-dates the birth of Stellantis, formed in 2021 from the merger between Fiat Chrysler Automobiles and the PSA Group.

He may have inherited the arrangement, but Tavares – a former Estoril track marshal and a racer himself - is adamant that F1 is the right place for the brand to be. He cites its presence in the USA and China, markets where the sport is growing, as among the key factors.

"For all the car companies that are working very hard to become the best, which is the case of Stellantis, this is obviously a place to be," he says. "To demonstrate that on the edge of the motorsports world, we can generate good results.

"Alfa Romeo was already involved in F1, in what we consider is a very positive partnership. And we saw that there was more potential to grow the partnership, and try to combine the two positive dynamics.

"One positive dynamic is the improvement of the sporting results, that you can see since the beginning of this year. And the second positive dynamic is the fact that we saw clearly an opportunity to grow profitably the business of Alfa Romeo around the world.

"Alfa Romeo is one of our three premium brands. It is the only of those three premium brands that is present in the three biggest markets of the world, North America, Europe and China. Therefore it has a specific need to improve its awareness and the overall opinion across the world.

"And of course F1 is a perfect show to increase awareness of a global premium brand called Alfa Romeo. So it was something that represents the good foundation, and we really decided that we should build on that foundation to increase the awareness of the Alfa Romeo brand around the world.

"The brand equity is very strong already, but when we can grow it even more, and of course, bring more profitable business to Alfa Romeo."

Carlos Tavares, Stellantis CEO

Carlos Tavares, Stellantis CEO

Photo by: Alfa Romeo

Alfa Romeo may only be a title sponsor rather than an owner, but Tavares is adamant that the cost cap should continue to have a tight hold on what teams can spend.

He doesn't want to see F1 one day regulated by some form of a balance of performance, as is the case in sportscar racing, for example.

"We believe that F1 should stay out of what I would call the BoP world," he says. "And therefore should continue to work in a rigorous and proper way on the cost cap, which is the alternative to the BoP world. And as we don't want to see BoP coming to F1, it is good that we work on the cost cap.

"Because if we work on the cost cap, then we are going to improve the return on investment that the car companies could have in this sport, given the media impact that we can have.

"And if we have a good return on investment, then it's good for the sport, and it's good for the carmakers. So there is a good alignment of interest between the cost cap improving the return on investment for the carmakers, the sustainability of the sport, and the fact that it makes economical sense to be present in F1.

"So I think it is in the best interest of people who are passionate about motorsports like you and me to protect the fact that you can race with a reasonable budget.

"Because if the budget is reasonable, with the good media impact that you are creating, then the return on investment is good. And if the return on investment is good, the carmakers will come."

Not surprisingly Tavares welcomes the expected presence of Audi and Porsche from 2026 – they are both names that Alfa Romeo would like to be seen competing with. However, he cautions that their arrival shouldn't be allowed to drive spending up.

"I am very happy that we would have even more OEMs present it F1, I think that's good," he says. "As long as as long as the presence of those OEMs is not going just to make the show bust. And how can the show go bust?

"By letting inflation take the hold on the show. It is not in our interest, we the motor sports fans, to let inflation take hold. Because after the inflation, there is the nonsense, after the nonsense, it blows up.

"And after it blows up, then everything needs to be rebuilt. So we welcome other OEMs very sincerely, because it's good. That's the sport, that's the big fight. That's why we are here. We like it.

"But it's important that it is combined with reasonable budgets that protect the ROI, because the ROI is the reason why we are here.

Zhou Guanyu, Alfa Romeo C42

Zhou Guanyu, Alfa Romeo C42

Photo by: Carl Bingham / Motorsport Images

"So if newcomers come in, and they blow up the show, because they are ready to spend money at the level that makes no sense, even for our employees makes no sense, then three years later, the show goes bust.

"So the limit to welcoming new entries and specifically strong new entries is yes, fine, great. We live the sport and we like to race on the track. But you have to respect the cost cap rules. You have to respect those rules, and make sure that you are going to play by the book.

"And if that's the case, then we welcome them, that will be fantastic And I'm not worried about the guys who have a lot of money, because you don't always find the talent where the money is."

Tavares is confident that the sport's bosses are on the case.

"We have a long history in F1, we should protect the history and keep things under reasonable control. That's why I'm not worried about the newcomers. It's just about the way you manage the sport.

"But I think that our current understanding and philosophical alignment with Stefano Domenicali is very, very strong on that matter. And I think he's doing well. I think he's doing the right things for the sport."

As noted earlier, we'll know in July if Alfa is extended its current deal, and for how long.

It's a simple calculation, as Tavares notes: "As long as there is a positive story to be told about the improvement of the performance of the Alfa Romeo F1 team, then I have a good positive media impact, which I can put in front of my financial contribution to the team. That's how I calculate it. And from that point of view, it's a good deal."

However, there remains an elephant in the room. Sauber is one of the teams high on Audi's shopping list, and there is a possibility therefore that it won't be available to be sponsored by Alfa in 2026 in beyond.

So is Tavares concerned by that possibility? He quickly bats the suggestion off.

"That's a pure speculation," he says. "In my automotive industry do you want the list of my concerns? How many days? I don't think you have enough pages in your notebook. We'll see..."

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