Honda and Sauber have agreed to call off their deal for the Japanese manufacturer to supply the team with Formula 1 engines in 2018.

The deal was put together by Honda motorsport’s general manager Masashi Yamamoto and former Sauber team principal Monisha Kaltenborn after the latter made an enquiry about a supply.

Following Kaltenborn’s departure in June, just before the Azerbaijan GP, Sauber and Honda held talks and decided “differences in the future directions” of the two parties meant it was best to cancel the deal.

“We had built a good relationship with Sauber, and had been looking forward to entering the 2018 F1 season together,” said Yamamoto.

“However, during discussions after management changes at the team, we reached a mutual agreement to call-off the project due to differences in the future directions of both parties.

“We would like to thank Sauber for their cooperation, and wish them all the best for their future.”

Sauber team boss Frederic Vasseur said: “It is very unfortunate that we have to discontinue the planned collaboration with Honda at this stage.

“However, this decision has been made for strategic reasons, and with the best intent or the future of the Sauber F1 Team in mind.

“We would like to thank Honda for their collaboration and wish them all the best for their future in Formula 1.”

Given Sauber’s struggles this season, it is believed the team feels it needs a more competitive engine next term to changes its fortunes.

It remains unclear whether Sauber will extend its long-time Ferrari deal or secure a deal with Mercedes or Renault.

For Honda, its only link in F1 now is with McLaren, though the future of that relationship is under threat following a lack of power and poor reliability from the engine so far this season.

McLaren is considering splitting with Honda, but it is believed Mercedes and Ferrari are not interested in supplying the team with engines, leaving Renault as its only alternative.

Regarding the impact of the Sauber deal being cancelled, Honda said in a statement: “Honda’s passion for motorsports and strong commitment to Formula 1 remains unchanged.”

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Entrust Finance are a team of professional finance experts located in Brisbane, providing business and personal brokering services across South East Queensland and Australia. Our...