Nov. 4 (Bloomberg) -- Toyota Motor Corp., the world’s largest carmaker, will withdraw from the Formula One racing championship as the company cuts costs amid record losses.

The Japanese automaker announced the decision at a briefing in Tokyo today.

The move may save Toyota 50 billion yen ($553 million) a year, according to Koji Endo, managing director of Advanced Research Japan, a Tokyo-based equity research firm. Honda Motor Co., Bayerische Motoren Werke AG and Bridgestone Corp. have also announced their withdrawal from the championship in the past year as the global recession cuts auto sales.

“More than cutting fixed costs, pulling out of F-1 is significant in showing Toyota is focusing on its core business,” Endo said.

Toyota, which announces second-quarter results tomorrow, in August predicted a net loss of 450 billion yen for the year ending March 31. Company spokeswoman Ririko Takeuchi earlier declined to estimate the cost of participating in the racing championship.

Tokyo-based Honda spent about 20 billion yen a year operating the team, excluding engine and car development costs. The carmaker reassigned its racing team’s 400 engineers to speed up development of new technologies to improve fuel efficiency and emission levels for mass-produced cars.

BMW, which spent an estimated 200 million euros ($295 million) a year on Formula One to market its brand, dropped out in July, a month after the biggest luxury carmaker reported a 13 percent drop in car sales.

Lotus Returns

The Federation Internationale de l’Automobile, F-1’s Paris- based ruling body, said Sept. 15 that sports car maker Lotus Cars Ltd. will take BMW’s place in the 2010 championship, which starts March 14 in Bahrain. The 2009 season ended Nov. 1.

Toyota, which failed to win a Grand Prix after joining F-1 in 2002, was one of four carmakers including Ferrari SpA’s team that in July signed up to stay through 2012. Toyota finished fifth in this year’s constructors’ championship as the formerly Honda-owned Brawn GP team took the title.

Toyota unit Fuji International Speedway Co. said in July it would stop hosting Japan’s Formula One Grand Prix race, citing the recession. It was held this year at Honda’s Suzuka circuit.

The $1 billion series has also been marred by scandal and friction between the teams and FIA during the last three years. Renault admitted to crashing on purpose at the 2008 Singapore Grand Prix to try to influence the outcome. In 2007, McLaren was fined $100 million for spying on Ferrari.

Teams including Ferrari, McLaren and Renault this year threatened a breakaway series over planned rule changes that they said would result in a two-tier championship.

To contact the reporter on this story: Makiko Kitamura in Tokyo at mkitamura1@bloomberg.net

Last Updated: November 4, 2009 03:14 EST