TOKYO — Japanese automaker Honda has pulled out of Formula One, citing a slowdown in the global economy and a need to focus on its core business activities.

"We have come to the conclusion that we will withdraw from all Formula One activities, making 2008 the last season of participation," Honda CEO Takeo Fukui told a news conference Friday.

Fukui said the deteriorating world economic conditions led to the decision.

"This difficult decision was 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 crises and the sudden contraction of the world economies."

He said the company would be willing to sell the team.

"We will enter into consultation with the associates of the Honda racing team and its engine supplier Honda Racing Development regarding the future of the two companies. This will include offering the team for sale."

A pullout by one of the world's biggest car manufacturers will send shock waves through F1, which could start the season with only 18 cars on the grid. Japanese team Super Aguri, which was backed by Honda, pulled out of F1 this year.

The season opens at the Australian Grand Prix on March 29.

Team bosses Ross Brawn and Nick Fry informed the near 700-member team late Thursday. Fukui offered his apologies to the team and Honda's fans at Friday's press conference.

"The team had done a superb job of getting ready for the 2009 season and I offer my sincere apologies to everyone involved," said Fukui. "I also apologize to our loyal fans who have supported us so well over the years in F1."

On Thursday, Honda Motor Co. announced it is cutting jobs in Britain and Japan because of plunging vehicle demand. It has already reduced its annual production of consumer cars by more than 140,000 worldwide.

Honda is also cutting 760 temporary workers at four plants, including one motorcycle plant, or nearly 18 percent of its Japan temporary work force of 4,300, this month and next month in response to nose-diving demand in the U.S. and other key markets, said company spokesman Hideto Maehara.

The Honda team, with an operational budget of around $294 million, finished ninth in the constructors' standings last season with Jenson Button 18th out of 20 drivers with three points. Rubens Barichello, who was dropped by the team going into 2009, was 14th with the remaining points.

"It's understandable if you look at the current situation around the auto industry," said auto analyst Koji Endo at Credit Suisse. "Ford, GM, and Chrysler are all facing extremely tough times. I would not be surprised if Japanese auto manufacturers start losing money in 2009, which would be the first time since World War II. Given this situation, it may be a good idea for them to pull out of auto racing."

Friday's announcement leaves Button without a team for 2009. Brazilian Bruno Senna, the 25-year-old nephew of the late triple world champion Ayrton, had been tipped to take the place of compatriot Rubens Barrichello at Honda next season.

"It is unfortunate," said Chief Cabinet Secretary Takeo Kawamura. "I understand it was the decision from a point of corporate management. But I hope Honda will resume (F1) after overcoming (the economic crisis)."

Honda, which originally entered F1 as a constructor for a stint in the 1960s before returning as an engine supplier in the 1980s, bought out BAR Racing in 2005.

"It really shows that the auto industry, which has been leading the Japanese economy, is facing severe economic conditions," added Economy, Trade and Industry Minster Toshihiro Nikai.

FIA president Max Mosley had described F1's combined $1.6 billion spending in 2008 as "unsustainable," saying the teams were relying too heavily on the goodwill of rich individuals and corporate sponsors. Mosley has vowed to push through cost-cutting measures by 2010 in a bid to make the sport more feasible.

"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," the FIA said in statement Friday. "In the FIA's view, the global economic downturn has only exacerbated an already critical situation.

"As the guardians of the sport, the FIA is committed to working with the commercial rights holder and the remaining members of FOTA (the Formula One Teams' Association) to ensure that Formula One becomes financially sustainable."

The governing body has already reached a deal with F1 to cap the cost of engines supplied to smaller teams as part of a plan to save money during the global financial crisis.

Over recent months, the 10 teams have been meeting regularly with F1 boss Bernie Ecclestone to discuss reducing costs, including streamlining engines.

Honda's announcement could also prompt fears that other major manufacturers could follow Honda's example.

Toyota Motor Corp. Honda's main rival in the auto industry, also announced cutbacks Thursday.