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World financial crisis

Motor racing latest casualty, HSBC profits from property slump

Article published on the 2008-12-05 Latest update 2008-12-12 17:24 TU

Honda showroom in Toyko.(Photo: Reuters)

Honda showroom in Toyko.
(Photo: Reuters)

Sport is beginning to feel the effect of the global financial crisis, as Honda announced on Friday that it will withdraw its Formula One team from next season. Meanwhile, British banking group HSBC has made a profit of more than 280 million euros from the sale and buyback of its HQ in London.

"Honda must protect its core business activities," Honda President Takeo Fukui explained.

Honda, which has been involved in Formula One motor racing since the 1960s, have said that this will be their last season. The Japanese company will withdraw their team and will no longer provide engines for other teams.

There is a discussion about a possible sale, but the contracts of both Honda drivers, Jenson Button and Rubens Barrichello, have expired.

The company is Japan's second-biggest car manufacturer and investors reacted to the announcement, with shares dropping by almost two per cent.

Other manufacturers are feeling the pinch with the sales of luxury German marque BMW dropping by 25 per cent compared to last year.

While sport and industry struggles the banks continue to keep their head above water, HSBC has made 288 million euros from buying back its headquarters in London.

The British bank sold the property for 1.25 billion euros in May last year but 18 months on property prices have dropped sharply and they've made a significant profit on the building in Canada Square.

In France, economists and the media are reacting to President Nicolas Sarkozy's stimulus package, announced on Thursday.

The plan includes big infrastructure projects and measures to support French industry. But some commentators believe that Sarkozy is just juggling with numbers.

Segolene Royal who took on Sarkozy in the last Presidential election said these were "mini-measures that were not adequate for the scale of the problem."

But supporters of Sarkozy, believe the plan will help growth, "it's a very powerful plan which by its nature will reestablish confidence," Prime Minister, Francois Fillon told French television.

Elsewhere in Europe, Spanish industrial output dropped by more than 12 per cent in October compared to last year, official figures from the National Statistics Institute showed. Making it the sixth month of shrinking output.