BMW sales plunge and Honda quits Formula One

By Michael Shields and Alastair Himmer

FRANKFURT/TOKYO (Reuters) - Global sales at BMW, the world's top premium carmaker, plunged by a quarter in November, and Honda backed out of Formula One racing on Friday as the economic downturn exacted a mounting toll on automakers.

With even well-heeled consumers keeping a tight grip on their wallets, group vehicle sales at BMW fell 25.4 percent to 96,570 units, led down by a 26.2 percent drop at the flagship BMW brand, it said.

Car sales across the globe have plummeted as consumers curb spending in the face of mass lay-offs and a credit crunch, pushing big U.S. carmakers to the brink and heaping pressure on their foreign rivals, too.

In Germany, Europe's biggest auto market, new car sales are expected to hit post-reunification lows this year and next before recovering somewhat in 2010, the VDA auto industry association forecast this week.

In Japan, Honda Motor delivered a major blow to Formula One by withdrawing from the sport with immediate effect.

Japan's number two carmaker is seeking to cut costs to combat the global economic crisis and concluded it would no longer bankroll the Formula One team and its estimated annual budget of $500 million (340.5 million pound).

Honda Chief Executive Takeo Fukui told a news conference a return to the sport could take time, and that there were no plans to continue as an engine supplier.

"This difficult decision was taken recently and was made in light of the quickly deteriorating operating environment facing the global auto industry," Fukui told reporters.