BMW is pulling out of Formula One at the end of this season, the second carmaker to leave the series within a year as a severe global economic downturn hits new car sales and forces manufacturers to cut costs.
The German company announced the decision at a news conference Wednesday, saying it wanted to use the significant F1 budget in other areas. It will remain involved in other forms of motor sport.
"Of course, this was a difficult decision for us. But it's a resolute step in view of our company's strategic realignment," BMW chairman Norbert Reithofer said at the news conference.
He said the Munich-based carmaker would use the resources previously spent on the F1 team to advance "sustainability and environmental compatibility."
Since entering F1 as a team by taking over the Sauber operation ahead of the 2006 season — it had previously acted as an engine supplier — BMW had posted just one race win, at last year's Canadian Grand Prix.
Touted as a championship contender for the 2009 season, BMW had been very disappointing, lagging well off the pace of the leading teams.
Klaus Draeger, the board member responsible for development, said the team was "unable to meet expectations in the current season."
The decision came before the signing of the new Concorde Agreement, the document that governs the sport, expected this week.
BMW's withdrawal followed that of Japanese carmaker Honda ahead of the 2009 season, illustrating the growing pressure upon carmakers to cut costs amid the economic downturn.
Their withdrawal lent credence to efforts by the FIA to significantly reduce F1 costs in order to retain existing teams and attract new entrants.
The FIA, motor racing's world governing body, said it hoped BMW was the last manufacturer to leave the series.
"The FIA regrets the announcement of BMW's intended withdrawal from Formula One, but is not surprised by it," it said in a statement.
"It has been clear for some time that motor sport cannot ignore the world economic crisis. Car manufacturers cannot be expected to continue to pour large sums of money into Formula One when their survival depends on redundancies, plant closures and the support of the taxpayer. This is why the FIA prepared regulations to reduce costs drastically."
The FIA also blamed the teams for failing to heed its warnings about the need to cut costs.
"Had these regulations not been so strongly opposed by a number of team principals, the withdrawal of BMW and further such announcements in the future might have been avoided," the governing body's statement added.
The decision to end its involvement on Formula One only came Tuesday and BMW was still considering what to do with the staff involved with the team, Draeger said.
"Of course ... would all have liked to continue this ambitious campaign and show that this season was just a hiccup following three successful years," BMW motor sport director Mario Theissen said.
"But I can understand why this decision was made from a corporate perspective. We will now focus sharply on the remaining races and demonstrate our fighting spirit and put in a good result as we bid farewell to Formula One racing."
Mercedes, the other major German carmaker involved in Formula One, said it regretted BMW's pullout, "but it will have no influence on our F1 engagement."