Honda has announced that the 2008 season will be its last in Formula One, and that it is looking to sell the team by the end of the year. If no buyer can be found the outfit may simply be shut down. Honda CEO Takeo Fukui broke the news in a statement today in Japan.

Fukui's reasons for the decision were simple. "We, Honda Motor Co., Ltd., have come to the conclusion that we will withdraw from all Formula One activities, making 2008 the last season of participation. This difficult decision has been made in light of the quickly deteriorating operating environment facing the global auto industry, brought on by the sub-prime problem in the United States, the deepening credit crisis and the sudden contraction of the world economies," he said.

The news comes after months of speculation regarding Honda's interest in staying involved in F1, following several seasons of poor results and exorbitant costs. In fact, Honda last year pumped $218 million into its F1 program to finish with a dismal eighth place in the 2007 constructors' world championship. According to Honda's own team of accountants, the annual costs were the highest of any F1 team on the paddock in 2007 (although we at MotorAuthority dispute this), and these costs are expected to be even higher this year due to heavy expenditure on new technology.

Other indicators of the demise of the Honda F1 team came yesterday when Shuhei Nakamoto left the team. Nakamoto, Ross Brawn's predecessor, was senior technical director after 2006 and saw the failure of Honda's single seaters in both the 2007 and 2008 seasons. Nakamoto will reportedly be focusing on Honda's motorcycle racing efforts instead now.

Bernie Ecclestone, head of F1, told Sky News TV, "This is a wake-up call." Whether his interpretation of that wake-up call is what most would make of it, however, is up for debate. "The announcement of Honda's intended withdrawal from Formula One has confirmed the FIA's long-standing concern that the cost of competing in the World Championship is unsustainable,'' said the FIA in a statement released today.

Honda's one month deadline doesn't bode well for the numerous employees and sponsors of the Honda F1 team, however Honda will reportedly give the team away for free to anyone who has the money to support it - a move which may attract some unexpected suitors itching at the chance to get into F1. If no buyer is found, the 2009 F1 season will have just nine teams and 18 cars - four less cars than at the start of this year.