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Honda Quits Formula One Racing

The Associated Press

TOKYO -- Honda(HMC Quote) has pulled out of Formula One racing, with the Japanese automaker saying Friday it needs to focus on its core business amid the slowdown in the global economy.

Honda CEO Takeo Fukui told a packed news conference the company was unable to continue backing an F1 team because of the tougher economic times. He said Honda was open to selling the team.

"The automobile industry is experiencing very difficult times," Fukui said. "Demand started to dry up in November and we can't see the light at the end of the tunnel."

The withdrawal of one of the world's biggest car manufacturers will send shock waves through F1, which could start the season with only 18 cars on the grid. Japanese team Super Aguri, which was backed by Honda, pulled out of F1 earlier in the 2008 season.

The 2009 season opens March 29 at the Australian Grand Prix.

The latest move reflects the huge difficulties faced by auto makers around the world, including the Big Three -- General Motors(GM Quote), Ford(F Quote) and Chrysler -- in the U.S., where desperate automakers are seeking a $34 billion bailout to stay afloat.

On Thursday, Honda announced it is cutting jobs in Britain and Japan because of plunging vehicle demand. It has already reduced its annual production of consumer cars by more than 140,000 worldwide.

Toyota(TM Quote), Honda's main rival in Japan, also has announced staff cutbacks, but has denied rumors it might quit F1. The Toyota F1 team finished fifth in the season standings.