KUALA LUMPUR • This year's Malaysian Grand Prix is set to be the country's last, Prime Minister Najib Razak said yesterday, citing rising costs and falling ticket sales.
The race, whose future has been in doubt for several years, will disappear from Formula One's 2018 calendar - a year earlier than initially planned.
"The Cabinet has agreed to end the Formula One Grand Prix effective 2018, in view of the low returns compared to the cost of hosting the race," Datuk Seri Najib said in a statement.
Officials said last year that Malaysia would cease to host F1 from 2019, waving the flag on a race which began in 1999. State oil and gas firm Petronas, the title sponsor of the Sepang race, has been hit hard in recent times by tumbling oil prices.
Razlan Razali, chief executive of Sepang International Circuit (SIC) said the termination was "mutually agreed" by race organiser Formula One Management and SIC.
Unfortunately in the last few years, we've seen a dramatic decline in terms of TV audiences and spectators.
RAZLAN RAZALI, chief executive of Sepang International Circuit, giving reasons why Malaysia will not host another F1 grand prix beyond this season.
"Unfortunately in the last few years, we've seen a dramatic decline in terms of TV audiences and spectators," he added.
Malaysia spends RM300 million (S$94.8 million) each year to host the race, revealed Tourism and Culture Minister Nazri Aziz. The race has faced intense competition in the region, particularly from the night grand prix in Singapore.
A move to have the Sepang race immediately after the Marina Bay date - in a bid to ride on the excitement generated at the Singapore Grand Prix - also did not work.
The Sepang circuit, with a capacity for 120,000 fans, has seen attendances fall since a record overall turnout of 140,000 over three days in 2006. In the early years, it averaged between 70,000 and 80,000 fans on race day but hit rock bottom last year, with only 44,611 passing through the turnstiles.
"It's always sad to say goodbye to a member of the Formula One family," said Sean Bratches, managing director of the sport's commercial operations. "Over nearly two decades, the Malaysian Formula One fans have proven themselves to be some of the sport's most passionate supporters."
Formula One faces an uncertain future in South-east Asia as the Singapore Grand Prix, which costs $150 million to host, has yet to agree on terms for an extension of its contract that expires this year.
The first Singapore race was held in 2008 and the crowds were high in the initial years. Last year, the daily attendance was 73,000, the lowest over the nine years of the race.
It was well below the 80,000 who turned up during the 2009 global financial crisis and the 87,000 who thronged Marina Bay Street Circuit in 2015.
When asked if the Singapore race's contract had been extended, a Singapore GP spokesman would only say: "We don't comment on ongoing commercial negotiations."
But, if the organisers of the Singapore Grand Prix are expecting to benefit from the Malaysian pullout, they may be disappointed.
"There could be a small increase in Singapore's attendance from the diehard Formula One fans who still want to get their race fix. However, that alone won't be enough to restore the Singapore attendances to the peak levels achieved," James Walton, sports business group leader at Deloitte Singapore & South-east Asia told The Straits Times.
"To hit those numbers again will require canny marketing, a competitive championship between the teams and a good mix of world-class entertainment acts to draw the crowd. The Coldplay sellouts showed that the right acts can be a big draw. A year without any haze or Zika threats around race week would be a boost too."
AGENCE FRANCE-PRESSE, REUTERS