Sources in Japan are reporting that Honda will soon announce that it has agreed a long-term Formula 1 engine supply deal with Sauber, which will provide the Swiss operation with the potential to become more competitive in the longer term, and with a better financial package than it has had with Ferrari customer engines in recent years. The deal is probably for three years, to get the team to the end of the current commercial agreements in 2020. It is difficult to imagine it being longer than that, as decisions about continued participation will probably depend on the rules and regulations

As part of the deal, Sauber will use McLaren-designed and developed transmission systems. Honda was keen to secure a second team in order to speed up the development process and wanted also to protect itself against any team claiming engines because of new regulations that oblige engine manufacturers to supply teams that are in need of engines, without having the right to choose its partner. By securing a deal with Sauber, Honda will now have two teams, the same as Ferrari, while Renault and Mercedes will have three apiece. There has been much recent speculation – most recently from TV pundit Eddie Jordan that McLaren will switch to Mercedes at the end of the season, but this does not seem the likely outcome. Mercedes does not want to be seen to be doing deals that would force Honda out of the sport and while the Sauber deal could provide a way in which Honda and Mclaren could split, the finance coming from Honda to McLaren means that the team would prefer to continue with the Japanese firm. There is also opposition to McLaren being given Mercedes engines because there are fears that the team might embarrass the factory team. It is much more likely that Honda will purchase engine know-how from Mercedes (and other companies such as Mahle, which has patented the turbulent jet ignition (TJI), which has been used by Mercedes. This was originally developed by Australian William Attard, but he left Mahle in 2014 and now works for the Fiat Chrysler Automobiles’s advanced engine and transmission controls division. In 2015 Ferrari acquired the Mahle technology for its F1 programmes and it may be using Attard as FCA and Ferrari are sister companies. Technology transfer deals are common in the automotive world.