1998 was a year of unfulfilled promise from Arrows. The cars were designed by the renowned John Barnard, and looked highly distinctive with an almost completely black livery. The car's main weakness was its engine. Tom Walkinshaw, the Team Principal of Arrows, had bought into Brian Hart's engine company and thus Arrows became the first British F1 team to produce their own engines since BRM in 1977. However, Hart's budget was not enough to compete with the major car manufacturers who supplied most of the other teams, and the problems were exacerbated by the car not being completed on time.
The car therefore proved to be quite unreliable throughout the season, particularly in the first few Grands Prix, culminating in an embarrassing simultaneous engine failure at the 1998 Spanish Grand Prix. However, the next race at Monaco proved the effectiveness of the chassis: on a circuit where engine power is not so vital, the cars were competitive and scored a double-points finish. Thereafter, the cars were too slow and unreliable to be serious contenders, although Diniz salvaged fifth place at the chaotic 1998 Belgian Grand Prix.
The team eventually finished a respectable seventh in the Constructors' Championship, with six points.