The Erebus Mercedes project will cut back to two cars for the 2014 V8 Supercars championship, with ex-DTM driver Maro Engel losing his seat.

The team’s third entry, run in collaboration with James Rosenberg Racing, has been transferred to leading Holden team Walkinshaw Racing.

Walkinshaw – which operates the factory Holden Racing Team as well as its eponymous entry – is expanding to four cars and giving 2011 Bathurst winner Nick Percat a full-time seat.

Of its three 2013 drivers, Erebus is only retaining Lee Holdsworth.

Tim Slade, who drove the Rosenberg/Erebus entry this season, has already agreed a deal to move to Walkinshaw for 2014, replacing the retiring Russell Ingall.

Team CEO Ryan Maddison said Engel would probably be transferred to its GT programme.

The German, who raced for Mercedes in the DTM from 2008-11, has only managed one top-10 finish and is 28th in the championship, last among the full-time drivers.

“It has been a tumultuous year for Maro,” Maddison told the official V8 Supercars website.

“Clearly he is a very skilled operator, but we all knew what makes V8 Supercars so special is it is a very unique category. There is a lot of contact, it is a unique car to get your head around.

“Obviously Erebus Motorsport has an agreement with Maro right now as a driver and it would be remiss of us to lose a talent like that from a GT perspective considering we are actively pursuing a GT programme for the [Bathurst] 12 Hours next year and both domestic and international categories.”

Erebus took over the Stone Brothers squad at the start of 2013 and introduced the AMG C63 to the series.