Already hit by the departure of Honda, Formula One suffered another blow on Wednesday as BMW confirmed it would be quitting the sport at the end of the season."The BMW Group will not continue its Formula One campaign after the end of the 2009 season,'' BMW chairman Norbert Reithofer said.
"Of course, this was a difficult decision for us, but it's a resolute step in view of our company's strategic realignment,'' he said.
"Premium will be increasingly defined in terms of sustainability and environmental compatibility. This is an area in which we want to remain in the lead.
"We are continually reviewing all projects and initiatives to check them for future viability and sustainability.
"Our Formula One campaign is thus less a key promoter for us.''
While rumours of the possible departures of Renault and Toyota have been flying around the paddock all season, that of BMW comes as a surprise.
And it had looked as if the sport's future was assured when the FIA, motor racing's governing body, announced the completion of negotiations between the FOA (Formula One administration) and the 13 teams who will race in 2010.
It had been thought that this Concorde Agreement, meant to link the two sides until 2012, also included the BMW Sauber team.
The FIA said however they regretted the German team's decision and hoped the sport had seen the last departure of a major manufacturer.
"The FIA regrets the announcement of BMW's intended withdrawal from Formula One but is not surprised by it,'' the FIA said in a statement.
"It has been clear for some time that motor sport cannot ignore the world economic crisis.
"Car manufacturers cannot be expected to continue to pour large sums of money into Formula One when their survival depends on redundancies, plant closures and the support of the taxpayer.''
BMW have been badly hit by the current economic crisis with profits tumbling by 89.5 percent in 2008 compared to 2007, and group sales dropping 19.5 percent in the first half of 2009.
It is also believed the company found it hard to justify spending on Formula One following a poor campaign with drivers Nick Heidfeld and Robert Kubica scoring just eight points this season to leave the team eighth in the nine-team constructors' championship.
BMW arrived in Formula One in 2000 and in 2005 took over the Swiss team Sauber, to become the BMW Sauber stable which now employs 730 people.
Its only Grand Prix win as BMW Sauber came when Kubica won in Canada in 2008, while he also achieved the team's only pole position in Bahrain, also in 2008.
The team finished third last season behind Ferrari and McLaren-Mercedes.
Meanwhile, the FIA said they hoped there would be no more departures from the sport.
"This is why the FIA prepared regulations to reduce costs drastically,'' the FIA said.
"These measures were needed to alleviate the pressure on manufacturers following Honda's withdrawal, but also to make it possible for new teams to enter.
"Had these regulations not been so strongly opposed by a number of team principals, the withdrawal of BMW and further such announcements in the future might have been avoided.
"Nevertheless, as a result of a sustained cost-cutting campaign by the FIA, new measures are in the process of being agreed which should make it easier for new teams to enter and enable existing ones to participate on much-reduced budgets.
"Hopefully it will be enough to prevent further withdrawals and provide a solid foundation for Formula One.''