Dec. 16 (Bloomberg) -- Subaru quit the World Rally Championship after 20 years, becoming the second team to exit in two days as carmakers struggle with slumping auto demand.

“Given the sudden deterioration in the operating environment, we were forced to make this decision,” Ikuo Mori, president of parent company Fuji Heavy Industries Ltd., told reporters today. The move will save the company “a few billion yen.” The Tokyo-based company expects net income to plunge 46 percent to 10 billion yen ($111 million) in the year ending March 31.

Subaru follows Suzuki Motor Corp. in withdrawing, halving the number of automakers in the series overseen by Paris-based Federation Internationale de l’Automobile. Ford Motor Co. and PSA Peugeot Citroen remain, and Ford backs two other teams in the sport.

Malcolm Wilson, whose Cockermouth, England-based M-Sport Ltd. company runs the three Ford teams, said he was “pretty confident” the championship would go ahead with five teams next year. Officials at London-based North One Television Ltd., which owns the rights to the series, didn’t immediately return phone messages and e-mails seeking comment.

“We’re disappointed about the two departures but we’re still very excited about next season,” Wilson said in a phone interview. “We don’t really see any change.”

Ford last month publicly committed to competing in the series in 2009, Wilson said.

Five Championships

Ford and Citroen, which between them won the last five manufacturer championships, will continue to duel for the title next season, Wilson said. Citroen’s Sebastien Loeb won the last five driving championships.

The Subaru team, which won the last of its six driver and constructor titles with Petter Solberg in 2003, was operated by Banbury, England-based Prodrive Ltd., which said it would seek to relocate 100 staff to other projects.

“Subaru’s departure from the World Rally Championship is a great loss as it’s one of the sport’s icons,” Prodrive Chairman David Richards said in a statement.

The team’s other champion drivers were Britons Richard Burns and Colin McRae in 2001 and 1995, respectively.

Although the Subaru team historically represented a “significant part” of Prodrive’s business, today it accounts for no more than 20 percent of company revenue, the statement said. Prodrive will seek to return to the series in 2010 with another manufacturer, it added.

Honda Quits F-1

Honda Motor Co. quit Formula One, the richest and most- watched motor sport, on Dec. 5, saying withdrawing will save it more than 20 billion yen.

Japan’s second-largest automaker announced the pullout after slashing its earnings forecast, firing assembly workers and reducing production.

Unless Honda is replaced, Formula One will have nine teams, the fewest in 11 years, when next season opens March 29. Super Aguri, a Japanese-owned team, folded in May.

To contact the reporter on this story: Alex Duff in Madrid at aduff4@bloomberg.netTetsuya Komatsu in Tokyo at tekomatsu@bloomberg.net

Last Updated: December 16, 2008 12:16 EST