Wednesday 12 October 2016 7:33 pm

Mercedes F1 engines fuel £130m investment in Britain

German car manufacturer Mercedes has revealed that the production of the V6 engines used by its Formula One team contributes around £130m to the British economy.

Mercedes clinched its third consecutive F1 championship on Sunday and is on track to win the drivers' title with either Britain’s Lewis Hamilton or his team mate Nico Rosberg who heads the standings with just four races remaining.

Mercedes designs, develops and builds its F1 engines at a dedicated factory in Northamptonshire. The local area is named ‘Motorsport Valley’, after America’s Silicon Valley, as eight of the 11 F1 teams are based there.

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Mercedes' engine division alone had total costs of £144.9m in the year-ending 31 December 2015 according to its latest accounts. They state that “the company now employs 550 staff members and contributes over 90 per cent of its expenditure within the United Kingdom”.

In 2014 F1 switched from using a 2.4-litre V8 to a more environmentally-friendly 1.6-litre V6 turbo hybrid which is one of the most technologically-advanced engines ever made. It has around the same power output as the V8 with a 30 per cent increase in fuel-efficiency. The V6 also comes with built-in recovery systems which transform the heat from the engine and energy created under braking to give a boost on acceleration.

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Mercedes engines don’t just power its own outfit but are also used by the Force India, Williams and Manor teams. The economic impact of building them in Britain stretches beyond the need to employ highly-skilled staff. Mercedes’ engine division deals with nearly 1,500 UK-based suppliers including designers, equipment manufacturers and haulage firms.

Its investment in Britain has been fuelled by the government’s support of the high-tech industry through its research and development relief which gives companies a deduction on taxable profits of qualifying expenditure.

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The accounts state that “the United Kingdom remains a global centre of competence for the motorsport industry and this coupled with the government’s support for research and development has enabled the company to continue to invest in a highly skilled workforce and technologically advanced asset base”.

Electronics and battery solutions for Mercedes road cars are also designed, developed and manufactured at the Northamptonshire plant. Its output will be boosted over the coming years thanks to a new Mercedes hypercar which will feature one of the engines used in its F1 cars. Plans for the car, which has yet to be named, were revealed at the Paris motor show earlier this month. It will reportedly be launched by 2019 at a cost of around $2m.