After twenty plus attempts, and about to pay-to-pass, I think I found the solution. It worked for me. I'm at 30/31 upgrades, car in the red.
The solution is to avoid sticking to the front man. The bot is too slow and you risk overtaking it. At the same time, the third place bot is very fast. You can't ride the bumper of the front man whilst trying to avoid being overtaken.
What I did was to slow down at the start. Letting the front man get about 150 yards ahead. On the straight it is easy to keep the other car behind you. After the first right hander then race normally. 1st place car will be over 200 yards ahead and you can create a 70+ yard gap to third.
It's just a case of keeping this gap from 1st to 3rd. It got close on the final straight of lap 2 but it is possible.
Don't give up and give in to FM's trap. :)