Honda in pits

’s second largest car manufacturer,

, has announced that it will be withdrawing all its Formula One activities unless a buyer can be found for the racing outfit by the end of the month.

Weakening results off the track have led the company to pull out of the 2009 season, with the economic downturn cutting into car sales in key markets, including the US.

Honda is currently in consultation with the associates of Honda Racing F1 Team and its engine supplier, Honda Racing Development, regarding the future of the two companies.

Honda’s president, Takeo Fukui said: ‘This difficult decision has been made in the light of the quickly deteriorating operating environment facing the global auto industry, brought on by the sub-prime problem in the United States, the deepening credit crisis and the sudden contraction of the world economies.

'Honda must protect its core business activities and secure the long term as widespread uncertainties in the economies around the globe continue to mount.’

The news follows October’s fiscal results, announcing a 19.2 per cent cut to its profit forecasts for the year ending 31 March.

Max Mosley, President of the Federation Internationale de l'Automobile (FIA), has warned teams that their spend on developing cars is ‘unacceptable’.

The FIA said: ‘The announcement of Honda’s intended withdrawal from Formula One has confirmed the FIA’s longstanding concern that the cost of competing in the World Championship is unsustainable.

'In the FIA’s view, the global economic downturn has only exacerbated an already critical situation.’

Honda has participated in F1 races since 2000, with partners British American Racing (BAR).

In 2006, the team switched to running a 100 per cent Honda team, achieving a Grand Prix victory in the same year.

While the possibility of a sale has not been ruled out, Honda’s withdrawal could mean that 600 staff at the team’s headquarters in Brackley, Northamptonshire may face redundancy.