Why so many F1 engine manufacturers prefers 3rd party company partnership for assembly rather than in-house standalone?

[theriusDR3]

In terms of development and assembly for F1 engines. Example: Mercedes-Benz with Ilmor during V10 days, Renault with Mecachrome currently, Ford with Cosworth in the past and Supertec with Mecachrome

[Jolle]

Especially during the pre-hybrid days, it was not only cost effective and less time consuming to buy/acquire something from a specialist, companies as Daimler, Renault and others didn’t have the knowledge of high reviving V10 that only lasted 300km. Illmor and Cosworth had.

In the car world it’s very common by the way to buy/commission anything outside the actual assembly of road cars. Prototypes, electric systems, racing cars, special editions, cabriolets, halo cars, etc etc are almost never actually made by the car brand itself. Some companies have their own “special operations” like Honda and you could almost say Ferrari is that to FCO, and even they commission lots of parts/designs form outside parties.

[Hoffman900]

It’s cheaper.

They don’t have to hire technicians at factory salaries, with factory benefits to do that job. Then when they inevitably leave, they don’t need to find roles for those people or deal with costly layoffs.

It’s easier to control the design in house and move those engineers to other divisions. The factories likely have the software for design already.

There is also specialty equipment to assemble, tools, etc the factory may not be looking to invest in and then collect dust in the end.

Most of your factory sportscar and motorcycle teams run this way too. Example: Yamaha pays a third party to run the factory superbike team. They get engineering help from the factory, but the tools, manpower, etc is from the third party vendor. If things go poorly, it’s easier to clean house and go to a new vendor. Also, when they want to scale back or leave, they just don’t renew the contract. Honda is one of the few that still likes to keep things inhouse, but it’s an outdated business model.

[Big Tea]

It is probably far easier to convince 'the board' if they can be presented with an actual figure to go in the cost column of the ledger.

Gentlemen, I need £$XXX to set this up, is so much easier to get past finances than Well, we need between XX and XXX for this, same for that and same for the other.

Oh, and we are not sure about these either.

[Hoffman900]

It’s the same reason they have vendors as well. Why design pistons in house when you can just pay Mahle for their expertise? It’s way cheaper and you’re buying their knowledge, and you don’t need to figure out what to do with your “piston program” when you don’t want to go racing anymore.

[Greg Locock]

The whole automotive world relies on a lot of work that is contracted out. At Lotus Engineering we were working on Volvo, Porsche and Audi product, while at the same time Lotus Cars was sending work to Aston Martin/Tickford or whatever they were called then (that went down like a ton of bricks). We also had a garage queen, a never released Ford that had a development issue that just about every shop under the sun had tried to work around (I don't know what it was, probably something to do with engine mounting strategy). We also built a lot of show cars for all sorts of people.

[coaster]

When the engine manufacturer takes a hiatus they rebrand it to the final developer.
Peugoet to Asiatech, Honda to Mugen, Renault to Supertec ( mecachrome are a jet engine assembler who breifly took over).
After the final rebranding the engine design goes on to retirement, except Mugen, Honda kept a lifeline of design interest and development, Mugen has a family connection to the founder of Honda i have heard.

[godlameroso]

Why are you going to buy land, raise cows, slaughter cows, transport carcass, buy a store, staff it, and use it to fry your steak when there are already steakhouses?

Much easier to find the type of cow you're looking for, and having someone cook it the way you want, than doing all the extra stuff.

[PlatinumZealot]

To reduce cost and business risk on the way to meeting the objective of having a fast car.

Time to implement?
Cost to implement?
Capabilities required?
Personnel required?
Infrastructure required?
Leadership to drive it forward?
Integration with existing departments?

How often will this part of the business be used anyway?
Will that unit be sustainably improved/updated with the times?
Quality of the products services?


It is a huge investment. Outsourcing it saves on, implementation time, sunk costs and risks.

[PlatinumZealot]

The whole automotive world relies on a lot of work that is contracted out. At Lotus Engineering we were working on Volvo, Porsche and Audi product, while at the same time Lotus Cars was sending work to Aston Martin/Tickford or whatever they were called then (that went down like a ton of bricks). We also had a garage queen, a never released Ford that had a development issue that just about every shop under the sun had tried to work around (I don't know what it was, probably something to do with engine mounting strategy). We also built a lot of show cars for all sorts of people.

Very good point. I was watching one of Nico Rosberg's youtube videos where he visited the Rimac factory. They do quite a bit of battery pack and motors for companies like Ferrari, Audi and Lamborghini among others.

[Jolle]

The whole automotive world relies on a lot of work that is contracted out. At Lotus Engineering we were working on Volvo, Porsche and Audi product, while at the same time Lotus Cars was sending work to Aston Martin/Tickford or whatever they were called then (that went down like a ton of bricks). We also had a garage queen, a never released Ford that had a development issue that just about every shop under the sun had tried to work around (I don't know what it was, probably something to do with engine mounting strategy). We also built a lot of show cars for all sorts of people.

Very good point. I was watching one of Nico Rosberg's youtube videos where he visited the Rimac factory. They do quite a bit of battery pack and motors for companies like Ferrari, Audi and Lamborghini among others.

I think Rimac can be seen more as the next supplier like Bosch, Hella or Lucas. Cars are made with a lot of outsourced parts. The car industry has to undergo a bit of a revolution the coming years. Looking at a large volume car manufacturer, they do three big things in their plants: Assemble engines (with lots of outsourced parts), press steel and weld in into a car and assembly. Engines are going to be replaced by battery and electric motors, which will come mostly from other companies, bodies will go from steel to polymers and laminates (that's why INEOS is key for instance) and assembly is a keeper. Software will be the next step where car manufacturers will be able to make a difference. But, saying that... Such an old industry normally doesn't transform well into software.