F1: European Grand Prix

The start was fairly tame, Heikki Kovalainen got by Kimi Raikkonen, but it seemed otherwise processional. If you don’t count Fernando Alonso getting taken out on the first lap by Kazuki Nakajima.

Anyway, with a new track and overnight rain, the surface was quite green and low in grip. An interesting tidbit mentioned by the SpeedTV team was the increased rate of fuel consumption in the GP2 race as more rubber was laid onto the track surface.

David Coulthard tried a dodgy pass on Giancarlo Fisichella resulting in contact and a spin for DC. He continues to show poor judgment, inexcusably so considering his level of experience. Meanwhile his replacement next year at Red Bull, Sebastian Vettel, did a spectacular job finishing 6th.

There was also speculation that McLaren and particularly Lewis Hamilton were vulnerable to a hot track as they seem to be harder on their tires. But frankly with the surface as green as it was, that was probably not as much of a factor (lower grip = less abrasion = less wear).

While spectacular to look at the Valencia street circuit produced almost no passing. It was almost a parade. Steve Matchett stated the obvious when commenting on Nico Rosberg’s use of the soft compound tires (he being the only one to start the race on them), and saying his lap times were competitive with those of the other drivers around him. Well yes, is that not true for everyone unless they have a problem?

Anyway, kidding aside, Ferrari had a fraught race. Though Felipe Massa basically led from start to finish except for when he was in the pits, Raikkonen’s race was a mess.

It started with a relatively poor qualifying performance (again) of 5th place. Then losing a position at the start. It took until well after the first pit stop before his times started coming down. Whether due to traffic or if he was just warming up, the outcome is the same. It’s too late to make an impact on the race. In fact, Massa came out of his first stop ahead of Raikkonen who had yet to make a stop. That’s how far behind he was.

Then during his second stop he left before the refueling was completed, knocking over 3 of the crew and losing more time to Kovalainen who had pitted at the same time. It appears whenever Raikkonen is behind Kovalainen on track he can not pass him, and tends to make uncharacteristic mistakes. One of Massa’s stops also resulted in a $10,000 fine for “unsafe release” as he almost collided with Adrian Sutil in the pitlane, but at least the stewards didn’t ruin an other-wise good race with a drive through penalty or something of that nature.

Finally Raikkonen’s engine blew in a big way about 10 laps from the end. Thus he scores no points and Lewis Hamilton extends his championship lead by finishing 2nd. McLaren didn’t put a foot wrong all weekend. Sure, they couldn’t match Massa’s pace but have drawn to within 8 points in the constructors championship as well. Not too shabby.

As for refueling, I think it’s time for FIA to look at making some changes in the interest of safety. It should remain as it plays an important strategic role. But is there a safer way to do so? Maybe there should be a system that prevents the car from driving away with the hose still in it. Maybe the mechanics shouldn’t stand ahead of the hose in case the car takes off. Maybe…… they’ll do something before more team members are carried off on a stretcher.

Finally, it’s clear that freezing engine specifications is not working. The teams continue to make tweaks and come up with slight gains. The FIA should think long and hard about whether the way their rules are enforceable.

F1: European Grand Prix Qualifying

The Valencia street circuit which hosts the Formula 1 European Grand Prix this year looks spectacular with its smooth high speed turns and a bridge (!) as part of the track. Traffic should be less of an issue due to the circuit’s length. One concern I have is that the pit lane entrance might cause problems in the race since the entrance is right on the racing line.

Anyway, Q1 was eventful. Nelson Piquet hit a bird with his right front wheel. Feathers went everywhere for a brief moment. Jarno Trulli finished at the top of the timesheet with his Toyota and Sebatian Vettel was second – an outstanding performance in the Toro Rosso.

The drivers that didn’t make it to Q2 were the “F1 Veterans Club” consisting of David Coulthard, Giancarlo Fisichella, and Rubens Barrichello, as well as Jenson Button and Adrian Sutil.

Vettel finished Q2 in P1 and in fine form. There was some light rain. Nick Heidfeld was third, Sebastian Bourdais made it through to Q1. The Ferraris and McLarens were slightly off the pace but appeared to have plenty to make it to Q3.

Q3 was similarly a continuation of Q2. Vettel’s crew were not ready when he came in for his final tire stop, which caused a slight delay. He ended up taking sixth place on the grid, about 0.2 seconds behind pole sitter Felipe Massa. The top 5 are rounded out by Hamilton, Kubica, Raikkonen, and Kovalainen.

Michael Schumacher was on hand with the Ferrari team, and the Speed TV commentators speculated he was hands on with the drivers and team in his consultancy role. If this is true, could it be that he’s focused on Massa and that is one of the contributing factors to his performance the last few sessions?

Auto Leasing Losses

A number of auto manufacturers are cutting back on leasing. The reason is because they are losing money, in some cases a lot of money on previous lease deals that were, at the very least, optimistic in the projected resale or residual values of the leased vehicles. Chrysler has left the leasing business entirely. GM, Ford, and Toyota are scaling back somewhat. All took big hits.

The Wall Street Journal reported that Ford lost $2.1 billion in the second quarter of 2008 on leasing, GM lost $2 billion, while Toyota has set aside reserves for a “large” write down for leasing.

At the heart of the issue is excess capacity. The manufacturers used leasing as a way to keep the factories running. It is often less costly to keep making the vehicles and selling them at break even or at a small loss than to idle a factory and still pay the overhead. Thus they had to find customers for all these extra cars.

What do you do to find customers (notice I didn't say "buyers") for extra cars without lowering retail prices? You lease them at very attractive rates, in some cases at ridiculously low rates. That preserves the retail price of the new car for the time being.

The problem with that, aside from attracting customers who often could not afford to buy the product and thus not enhancing the value of the brand by creating future buyers, is the manufacturers took on a lot more risk.

When a company sells a product it eliminates price risk. The item sold for X dollars and it's a done deal. When a company leases it is projecting what the car will be worth used when the lease runs out. It is also projecting the customer will not default.

Any time projections are made there is risk. The bottom line is the manufacturers bet wrong. The auto market has tanked and now those cars coming off lease, especially the less fuel efficient ones, are worth a lot less than projected. On top of that they have suffered higher default rates due, in part, to the collapse of the credit/mortgage markets.

Leasing, on the scale that it was done, was a bad idea. Not only did it artificially inflate the market size, the additional units "moved" were the riskiest transactions for the manufacturers. In summary, the manufacturers sold off tomorrow for reprieve today. Except that was a couple of years ago. Tomorrow has arrived and it's time to pay. Hence the losses.

F1: Hungarian Grand Prix

Qualifying

Not very exciting. The McLarens locked out the front row, basically paddling their competitors. Ferrari seems to be falling off the pace with Felipe Mass qualifying third and Kimi Raikkonen sixth. Nick Heidfeld was held up in the last turn during his final qualifying lap, didn’t make it out of Q3. If I recall correctly the BMWs did not get on track until late in the session, which seems like a big risk to take.

Race

Massa made a fantastic start. Lewis Hamilton didn’t appear slow off the line but Massa just rocketed by. At the first turn it looked like he might’ve overcooked it locking up the tires briefly, but he managed to go around the outside of Hamilton which was advantageous because he would be inside for the next curve. After the pass he pulled out a steady lead.

Was Massa’s qualifying position a result of a driving error or was he running light for the race? It was hard to tell.

Raikkonen tried to go toward the inside line at the start and was boxed in. Fernando Alonso was able to get around him and stay there until the second round of pitstops. Raikkonen could not get by the Renault.

Sebastian Vettel went wide on the first lap and both Hondas got by. Nelson Piquet also lost a spot on the first lap to Jarno Trulli (?).

Hamilton eventually suffered a left front flat. The cause was unknown but he was lucky to be able to get back around to the pits without damage and losing many positions. Based on his record of flats and tire issues it seems he is harder on his tires than the other drivers. But he’s also extremely fast so it’s probably a function of the trade off between speed and tire wear.

There were a rash of refueling fires among the mid-field teams. Nothing race-stopping but definitely common enough to cause concern. Commentator Steve Matchett speculated they were caused by high air temperature. It was apparently very hot.

After his stop for a tire change, Hamilton seemed off his previous pace after the tire was replaced. It might be he was unsettled or was concerned about it enough that he wasn’t quiet as quick as at the beginning.

Three laps to go from the end Massa’s engine let go in a big way on the main straight. His race was lost and Heikki Kovalainen became the 100th different Grand Prix winner, Timo Glock managed an incredible second place with his Toyota, and Raikkonen rounded out the top 3. He also took fast lap after getting clear road. So Kovalainen woin his first grand prix!

Ferrari has had a number of engine failures this year and one has to wonder if the fact that McLaren supply all the teams’ engine control units (ECU) has any bearing on this. This is not to suggest foul play, but that McLaren has simply been bullet proof on the engine front because they designed the ECU while all the other teams have had to design or adapt their power train to that ECU.

The Ferrari drivers are splitting points and are both in it for the championship while Hamilton is the only McLaren driver who’s in the title fight. Heikki Kovalainen is too far back in the points to be a realistic challenger.

So Hamilton has total support (like Schumacher) from the team to go for the driver’s title, while Kovalainen’s re-signing for next year and his breakthrough win will probably see him to score more points regularly. McLaren’s pace of development has been astonishing. The four paddle steering wheel with a pair of controls for different engine torque maps seems to have boosted the performance noticeably (though it’s not the only reason). They’re looking very strong.

All the other teams are no doubt working on their own versions. However, I am not sure the controls are perfectly within the rules and we might hear rumblings later in the year about that – if competitors using it start dominating. I’m such a cynic but remember the controversy around mass damper systems a couple of seasons ago, among other technologies (ahem, active suspension).

Also, the KERS system for next year may be on target despite recent development incidents. No word yet on how Ferrari and McLaren are doing with them.

Finally, it appears to me Raikkonen will retire at the end of this year at the age of 29. It’s been denied time and again, but that’s only more proof that it will happen. For further proof, you just need to look at his performance at the last few races. He’s been slower than Massa in most qualifying sessions. I’d say he’s not as motivated as before, and that’s a pretty clear sign his heart is no longer in it. Hopefully it’s not true and he’ll stay, but I have my doubts. Don’t be surprised to see Alonso at Ferrari in 2009.