Courtesy of Lewis Hamilton’s domination on the track, Mercedes has transformed themselves into the finest performing team in Formula One, having won the Constructors’ titles consecutively since 2014.
The 2020 season saw them finishing as the Constructors’ Champion for the ninth time, while Hamilton became the seventh time world champion with his silver arrows teammate Valtteri Bottas finishing in second.
Mercedes aiming to “diversify and leverage” their capabilities under the new budget cap
Despite last year’s championship taking a blow due to the onset of the COVID-19 pandemic that reduced the season to only 17 races, financial information revealed that Mercedes still spent a whopping £324m throughout last year. While there was a minuscule drop in their total revenue last year, from £363.6m to £355.5m, the total profit turned out to be £13.6m.
However, the big expenditure reveals two things about the German automobile giants- their amazing financial stability, which comes from the consecutive domination of their drivers in the circuits, and also the positive investment that the company has made into the team.
This year, the team will be taking a hit in their expenditure due to the new $145m budget cap set by the FIA, which will be the maximum a team can invest on the chassis side. Nonetheless, the defending champions look forward to fit in with the new cap accordingly.
“In 2021 the team will continue to develop its financial sustainability, aided by delivering maximum competitiveness under the new financial regulations and by diversifying and leveraging the capability of the team through the Applied Science division,” Toto Wolff, the Team Principal and CEO of Mercedes said recently.
While the salary cap has received some backlash from the F1 fraternity including Ferrari’s Charles Leclerc, one of the major woes about the new expenditure limit was the potential loss of team staff. Nonetheless, Mercedes was still able to increase their total workforce personnel of 1016 by 47 from 2019 to 2020 and listed 1063 personnel.
“Thanks to the range of revenue streams during the year, the company is still able to maintain profitability and to meet all financial obligations, a prudent approach will continue to be taken in regard to possible impacts on the business, and contingency plans are regularly reviewed to mitigate effects of the virus on the business,” added Wolff.
Mercedes has already won 2 out of the first 3 races of the 2021 season so far, with Hamilton coming out victorious in both the inaugural Bahrain Grand Prix and then at the Portuguese Grand Prix last weekend. Ahead of tomorrow’s Spanish GP, the Briton marked his 100th pole position finish.