Pirelli is estimated to be spending more than £46 million a year over the next three years to fund its new contract to supply Formula One with tyres.
The Italian tyres manufacturer fought hard to win the race to become the new sole tyre supplier for the sport, taking over from Bridgestone whose contract runs out at the end of the 2010 season.
And, according to a report in Tyres and Accessories, it is going to be a costly venture.
The magazine reports: “Deutsche Bank analysts have estimated Pirelli’s investment in Formula One sole tyre supply between 2011 and 2013 as being US$70 million per season.
“This annual sum, which may represent a figure at the conservative end of the spectrum, is seen by the bank as positive news for shareholders as it should improve brand equity without affecting profit and loss.
“As Tyres & Accessories has already reported, Pirelli intends to finance its F1 activities at least in part by reducing its expenditure in other motorsport sponsorship, including WRC.
Alex Kapadia, Operations Team