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HONDA RACING TEAM MEDIA CONFERENCE

September 15, 2017

Art St. Cyr

THE MODERATOR: Thank you for joining us for the final in a series of media briefings that we've had throughout the 2017 season. As is customary, our guest today is Art St.Cyr, the president of HPD. Art, thanks for making time for us. Let me‑‑ I think I can speak for everybody under the canopy when we open by wishing you a very happy birthday.
ART ST. CYR: Thank you very much.
THE MODERATOR: And our present is that we aren't going to sing.
ART ST. CYR: I appreciate that. I actually only have one wish for my birthday, and it's a championship. I also wish for a Honda jet for my birthday, but I'm probably not going to get that.
THE MODERATOR: Let's begin with your take on the IndyCar season as a whole. Seven victories, one from each team, each Honda‑powered team, at least one from each Honda‑powered team, and a chance at the championship going into the final event. Kind of give us a reflection on 2017 from your standpoint.
ART ST. CYR: Yeah, I mean, that really sums it up, especially considering that this year the aero kit rules were frozen, so last year we won two races, which was not a great year, but we did win the Indy 500 last year. This year we have come back. We've won seven races so far. This year including the Indy 500 again, with Takuma Sato, which has turned out to be a really great thing for Honda worldwide. STE mentioned that every one of our five teams has won at least one race, which I think is a testament to the overall strength of all of our teams right now that what we want to do at Honda is really raise all boats and have information and teams and drivers that allows all of our teams a chance to win every week, and I think that we've achieved that.
Having Scott Dixon right in the championship hunt, considering what happened to him at the Indy 500, the other double‑points race, shows his resilience throughout this year. There's a couple races between Texas and the Indy 500, a couple things that he got taken out on situations that weren't his deal, I guess, to see where he is now really is a testament to how strong that team is and how good of a driver Scott Dixon is, and to be three points out and challenging for a championship at Sonoma here is just fantastic, so it's very exciting.
THE MODERATOR: As we look ahead to 2018, my understanding is that the homologation table doesn't really permit a great deal of modification from an engine standpoint. What will HPD be focusing on as it prepares the IndyCar engine for the 2018 season?
ART ST. CYR: Right, so with the engine formula, as most people know, there are different parts you can work on every year. 2017 was actually a relatively small year to do development. 2018, again, is a another relatively small year for parts that we can develop in the engine.
With that being said, there are still some areas that we are looking to improve on for next year. We don't expect anybody to be standing still. Our competition is not standing still for sure. So we are still working to improve our engine, what we have right now. We hope to give our teams a very solid engine package next year. Combine that with the new universal aero kit next year, we expect to have a very strong package. We expect all our teams, again, next year will be fighting for victories every week, so that is our expectation.
One thing that I think is really good is that we do have our driver‑‑ not our driver but our team lineup is set for next year, so we are keeping the same five teams that we have this year with the latest announcement with Andretti Autosport at Watkins Glen announced that we re‑signed them. So we still have the same five teams with Andretti Autosport, Chip Ganassi Racing, Dale Coyne Racing, Rahal Letterman Lanigan and Schmidt Peterson Motorsports, so we will have the same teams. Driver lineup might be a little bit different, but having those teams set right now gives us a chance to really put our plan in place early on to make sure that the off‑season testing will go well, especially with this new universal aero kit, make sure that the information that we can provide for the teams gives them a good foundation for them to launch off next year. Hopefully next year will be even more successful.
THE MODERATOR: At least in the marketplace, so to speak, the 2018 car seems to be playing very well in terms of its reception. We've been testing it with the Schmidt Peterson team with Oriol Servia behind the wheel. What kind of feedback are you getting relative to where the 2018 car is in development right now?
ART ST. CYR: Well, it's interesting because Oriol after the first test at Indianapolis Motor Speedway called me right after the test and actually was pretty much glowing about how that test went, that he was pretty much flat right out of the pits.
Obviously there are a lot of work that went into making that car ready to go like that, but the signs so far with the tests we've done in Mid‑Ohio, the tests we've done at IMS, all of the work that has been done by IndyCar in conjunction with the teams, things have been very, very encouraging. It looks like some of the things that we want to happen, we want to put more of the downforce on the underside of the car so we can race closer together, so one of the beauties of IndyCar the way it is right now is that there's a lot closer racing than there are in pretty much any other series around, and next year we can only expect that to get even closer. We haven't really seen any real major issues with the universal aero kit for next year so far, obviously knock on wood. And we still haven't really got into our manufacturer testing or our team testing, so that's the next step. But so far all the signs have been very, very encouraging for how stable the kit is as a platform, how raceable it is, and hopefully will lead to very exciting races next year.
THE MODERATOR: Let's move into a different category. Let's talk about the NSX GT3 sports car program, which is also on display here this weekend with Pirelli World Challenge under the auspices of our partners at RealTime Racing. First‑year program, out of the gate pretty strong. I would expect that you would be fairly pleased with what we've seen on the racetrack in both the IMSA WeatherTech championship and Pirelli World Challenge with the NSX GT3 so far.
ART ST. CYR: Yeah, there's a whole long story with the NSX GT3 including when we received the base car for that and really started our development of that last summer to get ready for this season. The people at HPD along with the support that we had with our partners in Italy and Yaz along with our family in Japan really got that car off to a really good start.
The fact that we led Daytona right out of the box was pretty fantastic. Obviously there was still some teething pains with a brand new car, a brand new platform, but honestly, we won to races in IMSA, one race in the Pirelli World Challenge so far.
I don't think any other first‑year manufacturer can boast that many wins in a new series, so we're very, very pleased with the performance of the NSX GT3. It was really great working with Michael Shank Racing in IMSA as well as RealTime Racing in the Pirelli World Challenge. Those two groups necessarily needed to work very, very closely together with part shortages and development things that we had to do, which it was very good for us. I think it was very good for them. But the overall success of that program has been fantastic.
We announced in mid‑Ohio that we are turning that program into a customer program, so we have had‑‑ to date I think we've had three sales so far globally of that car worldwide. We are having a production run of those vehicles right now that we will be selling to customers, hopefully next year. I'm not sure how many there will be and where they'll be, but it's a big step in HPD's development that we homologated a global specification so that car is able to run in any global or any international, any GT3 series around the world right now, so we're actively marketing that vehicle and looking for customers to race that vehicle successfully next year.
THE MODERATOR: This is really the first of these media briefings we've done since the announcement we made in late August regarding a new sports car program for next year in the WeatherTech championship, the DPI program in partnership with Penske Racing. Seemed like that made rather a large splash when the news was announced at the Monterey Auto Weeks. Talk about the development of that car a little bit and your ambitions for that program in 2018.
ART ST. CYR: Well, first of all, talking a little bit about the series that we're entering, the IMSA DPI series, that series is already a very challenging and a very competitive series. The champion this year was crowned two races ago or something, so we recognize that we are entering into a series that has very strong competition. We know that some of the other manufacturers are looking at coming into that one. Some of them have changed partners to work in that one, so we know it's going to be extremely challenging.
With that being said, our Acura DPI program is based off the very successful Oreca 'O7 chassis with Acura‑specific body work and an Acura‑specific engine for that car. We have done a shakedown test of that vehicle at Paul Ricard. We did our first test a couple weeks ago with that car at Road Atlanta, and by all accounts we were able to get through the program that we wanted to do during that test.
So far, knock on wood, things are going according to our plan right now, but we have no illusions that coming into this DPI series is going to be easy. We know we have a lot of challenges ahead. We have a lot of work that we are working very closely with Team Penske to get that car raceable and ready to go in January's 24 hours of Daytona.
But like I said, we're very excited about that new program. It's always nice to have a new car. It's really energized the folks at HPD to work on that, and we're really looking forward to what the future brings with that particular class and that particular formula.

Q. Are you planning on running at Petit LeMans this year with Team Penske with the DPI?
ART ST. CYR: We are not running Petit LeMans this year. Our first race with that car, debut for that car will be Daytona in 2018.

Q. On the IndyCar side, Michael Andretti talked to Chevrolet about switching manufacturers; what did you have to do to keep him? Did you have to pitch him or sell him? How do you say, hey, we're a better option?
ART ST. CYR: Well, it wasn't really a sales pitch that we had. We said that we have been successful with Andretti auto sports since they came over to Honda Power back in 2014, and we desire to continue with them. It was more about a mutual understanding that we thought we were happy together. We thought that we would be more successful together than we would be separate on that.
You know, ultimately it came down to Michael having to make a decision A or B, and thankfully for us, we think, they stayed with Honda Power, and we're very happy about that, and we're very excited to look at the future with them and especially with all the history that we have with our Indy 500 victories and other race wins.

Q. Are you comfortable where the series is, having the manufacturers have a bidding war for teams to keep things relatively level?
ART ST. CYR: That's an interesting question because there's only so much we can do as a manufacturer, and when we reach that limit, we reach that limit, so there's no real impact that I can think of with the IndyCar rules per se that affect that. Really our decisions about what teams we work with are the ones that share our values, that share our desire to try and bring all the Honda cars to the front of the field and to work together as a group to accomplish that.
But manufacturers will spend what they're allowed to spend, I think, no matter what, so I don't think that necessarily any IndyCar rules per se is keeping that. I think that's our own caps that we have on our own limitations on what we want to do.
Really it's about us developing our own program, deciding what teams work in that envelope and making sure it fits into that. There's no secret sauce to that, I guess.

Q. Are you comfortable with where budgets are then, terms, etcetera?
ART ST. CYR: Well, I think no matter what, the racing industry, or the racing environment, is different than it was 20 years ago, and budgets are necessarily smaller now because the ability for the teams to attract sponsorship is smaller right now.
So I think if you're talking about the rules from the team sides about how much it costs to run a car versus how much they can get for sponsorship, I think that that's at a pretty good balance right now, and I am comfortable with that.

Q. You said earlier if I understand it correctly, in 2018 we have small areas where we can improve the engine. Can you give some details what kind of areas?
ART ST. CYR: I could if I knew it off the top of my head, but I don't know specifically what those‑‑ it's in the IndyCar rules, so it's available. It shows what are the open homologation items for each year on 2018‑‑ it's pistons and‑‑ I don't know. I don't know exactly what they are. I'd have to look at that myself. If Mark Crawford was here he could rattle off exactly, or David Salters, but I don't know off the top of my head what it is we're allowed to work on.

Q. Any kind of engine, the designers are trying to reduce friction. Is there any research from HPD to remove friction?
ART ST. CYR: So the question is is there any work being done to reduce friction in the engines. So there are some rules‑‑ so we are not unlimited with our lubrications of what we can do with the engine, so specifically the oil. The oil that we are using has to be available to everybody, can't be a specific unique that only Honda teams can get type oil. Obviously we do look at reducing friction, but the areas of being able to‑‑ coatings and that type of stuff are open, so there is some research being done on that. But quite frankly this engine has been around‑‑ this is the sixth year, I believe, of this engine. Next year will be the seventh year of this engine. So we're approaching the theoretical development limit of what we can actually extract out of this engine without making major changes to it.
The simple answer is we're always looking to reduce friction, but right now the avenues available to us to reduce friction are much limited.

Q. The last one is your IMSA program next year, I understand you (indiscernible) from France. Would it be easier to switch to Dallara which already (indiscernible)?
ART ST. CYR: We chose our DPI supplier based on a very long list of what is‑‑ what gives us our best chance to win races based on our personal criteria, and from that we chose the Oreca to do that. We didn't really consider the importation and those types of things. Obviously, yeah, working from France makes things a little bit more difficult from a logistics standpoint, but we plan for that. Obviously the body work is done by us, so we don't see that as a limitation, quite frankly.

Q. The other day there was a pretty thorough price guideline for all the teams. Are you as a manufacturer comfortable with those prices for all of your teams, or do you think there might be a little bit of an initial financial hardship for some of the smaller teams?
ART ST. CYR: Any time you have a change that requires the teams to do something different than they're doing right now, it's going to be a hardship.
Now, the level of that hardship is debatable right now, but I think that one of the driving forces of doing this universal aero kit was to reduce costs, and I think overall the costs are going to be reduced. Crash damage is going to be cheaper next year.
So I think any initial investment that is laid out by the teams I think will be paid back over the course of the season, so I don't think it'll be that difficult for the teams.

Q. And also, do you have any input as a manufacturer (indiscernible)?
ART ST. CYR: This is for the DPI program you're talking about? Well, yes, of course. So we're in discussions about that right now. We're not prepared to announce who those are as yet mainly because we don't know‑‑ we don't have 100 percent confirmation on those. But we are hoping to nail down our full season drivers fairly season, and then we'll talk about the endurance drivers after that. But yeah, it's active discussions between us and the Penske folks.

Q. You said that the engine is kind of at the apex of its development and there's not much more that you can do under the rules that you have now; what would you like to see opened up?
ART ST. CYR: Well, quite frankly, this engine‑‑ the engine formula that was‑‑ I've got to give a little bit of background, but the engine formula that we made, and I say we because Honda was the sole supplier when we made this engine spec, and obviously Chevy and Lotus came in in 2012 with this engine spec, but our expectation was this formula was only going to last four years, five years maximum. So the power gains that we have are really stressing the overall structure of this engine that we have right now that we need to really kind of re‑think and redesign the entire engine. So we're looking forward to the next iteration or next generation of engine to do a complete redesign.

Q. When? When do you think that'll happen?
ART ST. CYR: Well, there's actually meetings today ‑‑ it's going to be in the next couple years. This can't go on forever, so there will be an announcement at some point. It's not my announcement to make on that, but we are in discussions of what that formula for the next engine is going to be and what that's going to take and we'll have announcements for those when the time is right for those. But we're working with this engine for at least obviously this year and next year at the very minimum.

Q. How important is it to keep not just the same teams but the same drivers in your lineup?
ART ST. CYR: So the answer is we look at this as a family. When we look at our teams and we look at our drivers, we look at it as part of the Honda family.
Now, there's various things that can help performance of the car. Obviously the chassis is one, the engine is another one, the team is another thing, and then the drivers. So we are always looking for‑‑ it's a competitive sport, so we think it's good to have stable teams. We know what their engineering capability is. We know how to work with them. Drivers, obviously, we're always looking to get the best driver lineup we can. Quite frankly we have 13 seats to fill, and we realize there's going to be some attrition here and there, and we do work with our teams to make sure that we have appropriate drivers that fill those seats, but ultimately the driver lineup is the teams' decision. All we can do is help encourage that.
In the perfect world, we'd like all of our drivers to finish position 1 through position 13 in the championship and they're fighting against themselves, and then I'd say absolutely I want to keep them. But until that happens and we realize it's a transient sport, that there will be some changes, but all we can do is really work with our teams to make sure the lineup is as strong as humanly possible to drive our Honda cars.

Q. Talk about the possibility of expanding, to supply more teams if possible.
ART ST. CYR: It's not a simple answer, quite frankly. Our capacity, the way that we're staffed is really for 11 cars. That's our capacity at HPD. Now, obviously we can extend that given the circumstances that we have. We would prefer not to. Quite frankly this year 13 cars really stretched our capability. We wouldn't be looking to add to that number short‑term. Obviously it's a physical limitation of our engine build shop just to try to get enough engines through that shop. I mean, as it is right now, we still building Indy engines I think in February, so it becomes a little bit problematic in terms of building enough supply to do that stuff.
To answer your question about whether we have the capacity or the willingness, we always want to‑‑ we want this series to grow, so we want more teams, but that's quite frankly one of the reasons we encourage looking for other manufacturers is to kind of help with that car count, and 13 is really kind of our practical limit that we have right now, so we're not really looking to expand above that number.

Q. Early in the season you had the reliability problems. How has that worked itself out, and what are you anticipating in 2018?
ART ST. CYR: Well, we anticipate not failing engines in 2018. It's well‑documented the issues that we had starting in Long Beach. I think we addressed it in one of these meetings here that it was a part quality problem. We fixed that part quality problem and the spec of the engine that exists right now is the same as it was back then, so our expectations are‑‑ it's unfortunate this year because I'm not sure if you guys understand the rules of the engine manufacturer championship is that you can only earn engine manufacturer points with your first four engines, so the fact that we changed out all of our teams' engines early in Long Beach or after Long Beach and then with our issues that we had at the Indy 500 really made that problematic, so I think we're down to maybe only three cars that are capable of earning‑‑ don't quote me on that number, but a very small number, and actually the other side has the same problem, so there's really only probably six or seven cars that are capable of earning manufacturer points at this race, so it makes things a little bit complicated on that.
But our expectation and our work is really to, as we increase the power of this engine, is to really make sure that we address‑‑ and this goes a little bit to Tony's question, when we had 13 engines, part of it is we had to hurry through some of our processes to get these engines out the door, that that's kind of a direct result of that, as well. So we're working on trying to tighten up our business at HPD, and next year we expect to be able to do the whole season on four engines. Now, obviously crash damage and those types of things are outside of our control on that, but like I said, from a reliability standpoint, we expect to do the next year with four engines all the way through the season.

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