F1 manufacturers offer engine fund for small teams

MAGNY-COURS, France, July 16 (Reuters) Formula One car manufacturers have offered to create a 40-million-euro (50.7-million dollars) fund to help independent teams secure affordable engines for the next four seasons.

BMW, Renault, DaimlerChrysler, Honda and Toyota -- the carmakers in the Grand Prix Manufacturers' Association (GPMA) -- said in a statement at the French Grand Prix that their proposal would cut costs considerably for the smaller teams.

''The engine fund provides the opportunity for an independent engine supplier to plan a structured development programme and ensure its engines remain competitive and affordable,'' the statement said.

''This initiative is without precedent in motor sport and represents a significant effort to reach out to all teams, in the best interest of the sport.'' Cosworth, who power Williams and Toro Rosso, are the sport's sole independently-owned engine maker.

The car manufacturers made the offer as part of their attempts to stave off a total freeze on engine development from 2008, when the existing Concorde Agreement governing the sport expires.

The governing International Automobile Federation (FIA) has said that the 2008 season will start with engines returning to the developmental stage they were at in June this year.

Next year remains open however, and the competition between manufacturers threatens to see up to 1 billion dollars spent on engine developments over the next year that will then have to be discarded.

The manufacturers sought a compromise at the US Grand Prix at Indianapolis, suggesting bringing forward the engine 'homologation' by a year in exchange for being allowed to make one annual update on a limited range of components in future.

Unanimous agreement of the 12 teams entered for 2008 was needed by 1400 GMT on Sunday for the compromise to be accepted and the GPMA statement made clear that had not been secured.

''All six car manufacturers participating in Formula One have unanimously agreed upon the Indianapolis Proposal, which is also endorsed by 10 of the 12 teams,'' it said.

The sixth manufacturer is FIAT-owned Ferrari, who do not belong to the GPMA. The statement did not say which teams did not endorse the proposal.

REUTERS DH KN1730