THE OPEC EMBARGO
Since the mid-1950s, major Western oil companies had maintained tight controls on the production and price of Middle Eastern oil. While those restrictions kept fuel prices stable and relatively low, Middle Eastern leaders chafed at the limits on their income and what they saw as the lingering specter of Western colonialism. That growing frustration only worsened with the depreciation of the U.S. dollar following the end of the Bretton Woods system, which effectively reduced the value of crude oil.
By 1973, a series of minor clashes with the oil companies had led the members of the Organization of the Petroleum Exporting Countries (OPEC) to two powerful conclusions: First, that the price of oil (around $3 a barrel in early 1973) was well below what the oil would actually be worth on the open market, and second, that the major oil companies would bend if sufficient pressure were applied.
On October 6, 1973 — during the Jewish holiday of Yom Kippur — a coalition of Egyptian, Syrian, Iraqi, and Jordanian military forces mounted a large-scale assault on the Israeli-occupied Sinai Peninsula and Golan Heights, hoping to regain territory and prestige lost in the wake of Israel’s 1967 offensive. Although taken by surprise, the Israeli Defense Force soon rallied and mounted a counteroffensive, thanks in no small part to substantial military aid from the United States and other Western powers.
The war provided the pressure OPEC needed to dramatically increase oil prices. By mid-October, crude was up to $5 a barrel and there was talk of significant production cuts. That was only the beginning. Of the belligerents, only Iraq was a member of OPEC, but many other members were sympathetic to the coalition’s cause. On October 19, OPEC announced an embargo on oil sales to the U.S. in protest of the U.S.’s new $2.2 billion aid package for Israel.
Diplomatic pressure ended the shooting war on October 26, but the embargo would continue into the new year. By early 1974, oil prices had reached nearly $12 a barrel, sending fuel prices soaring. In the U.S., the average price of a gallon of gasoline climbed from 36 cents to as much as 60 cents while fuel shortages led to long lines at gas stations and various rationing measures, including limiting fuel purchases to alternating days based on the last digit of a car’s license plate number.
The embargo, which lasted until March 1974, put a damper on the public’s appetite for large or thirsty cars. Even in countries that weren’t targeted by the embargo, the spike in fuel prices caused sales to plummet except on the smallest, thriftiest models. The rotary engine’s gas guzzler stigma meant that Mazda sales were hit particularly hard, falling about 30% in Japan and more than 40% in the U.S. Alarming as they are, those figures don’t fully suggest how badly Mazda’s rotary sales suffered. Worldwide production of the rotary Capella/RX-2, for example, fell from 54,962 in 1973 to 7,656 in 1974, while the Savanna/RX-3 dropped from 105,819 units to only 29,678.
Despite the drop in sales, Toyo Kogyo’s production continued unabated. By the end of the 1974, Mazda had huge stockpiles of unsold cars: an estimated 140,000 in Japan and more 50,000 in the U.S. At home, where Mazda dealers already struggled with slim margins and high carrying costs, salespeople began to jump ship. By year’s end, the company had lost one-fifth of its domestic sales force. Dick Brown also departed, resigning in July 1974; his replacement was former Chrysler executive Sidney Fogel. (Brown went on to become president of the DeLorean Motor Company, followed by stints at Avanti and Daihatsu.)
The OPEC embargo cooled much of the enthusiasm other automakers had shown for the rotary engine. As regulatory attention shifted from air pollution to fuel economy, the 1975 emissions standards were pushed back, giving automakers more time to develop emissions controls for reciprocating engines. GM announced in September 1974 that it was indefinitely suspending its Wankel engine plans. Comotor, a joint venture between Citroën and NSU to produce rotary engines, collapsed after the failure of Citroën’s GS Birotor. The NSU Ro 80 would survive through 1977, but after that, Toyo Kogyo would be going it alone.
PARKWAY, REPU, AND ROADPACER
Despite the energy crisis, Toyo Kogyo still had ambitious plans for the rotary, many of them in motion long before the embargo.
A revised Series 3 Mazda Capella bowed in Japan market in late 1973, sporting hexagonal taillights, a new dashboard and bumpers, and the 1,146 cc (70 cu. in.) 12B (single-distributor 12A) engine with a thermal reactor and optional five-speed gearbox. the new Capella arrived in some export markets in early 1974, but U.S. cars got only a few of those changes. The U.S.-market Mazda RX-2 was discontinued at the end of the 1974 model year, although the Series 4 Capella, introduced in Japan later that year, continued in other markets through 1978.
The next new rotary Mazda was the first intended solely for the American market: the Mazda Rotary Engine Pick-Up, or REPU. Launched in April 1974, the REPU was a rotary version of the Mazda B1600 truck, trading its 1,587 cc (97 cu. in.) piston engine for the federalized 13B rotary engine. Since the pickup’s curb weight was about the same as the RX-4 wagon’s, the 110 hp (82 kW) rotary gave the Mazda REPU brisk performance for the era. The truck was also surprisingly nimble and had better-than-average ride quality. However, with a base price of $3,495, the REPU was $500 more expensive than the B1600 and fuel economy was decidedly heavier, typically running to 16-17 mpg (13.8 to 14.7 L/100 km/h) overall. The REPU sold 14,366 units in its first year, but demand dried up after that. Only 113 were built in 1975, a meager 632 in 1976, and 1,161 in 1977, its final year.
Three months after the REPU, Toyo Kogyo introduced perhaps its strangest rotary model: the Mazda Parkway Rotary 26. The Parkway was not a car, but rather a rotary version of Mazda’s recently introduced 26-passenger bus, itself based on the Mazda Titan commercial truck. While the standard Parkway 26 was offered with either a four-cylinder petrol engine or a choice of diesels, the Rotary used the thermal reactor-equipped 13B, linked to a four-speed manual gearbox. The Parkway Rotary was built in limited numbers — 44 between 1974 and 1976 — and we don’t believe any were exported.
As those models debuted, Kenichi Yamamoto was hard at work on Project Phoenix, a crash program intended to reduce the rotary engine’s fuel consumption by 20% for the 1975 model year and 40% for 1976; see the sidebar below.
The first all-new model introduced after the start of Project Phoenix was another Japanese-market oddity: the Mazda Roadpacer AP. Introduced in March 1975, the Roadpacer was essentially a rebadged version of the Holden Premier, the second-largest model offered by GM’s Australian subsidiary, trading the Premier’s GM-H powertrain for a JATCO automatic and an emissions-controlled 13B. Probably aimed at senior company executives and government officials, the Roadpacer was by far the largest and most expensive Mazda, with a ¥3,800,000 list price (around $13,000), and among the thirstiest, returning less than 10 mpg (24 L/100 km) in hard driving. Sales amounted to only 800 units through 1978.
The Mazda Roadpacer was not sold in the U.S., where Mazda dealers were putting renewed emphasis on the piston-engined Mazda 808, a model that had previously accounted for less than 10% of sales. For the 1976 model year, Mazda even offered a fuel-sipper 808-1300 model, the Mizer, powered by the 1,272 cc (78 cu. in.) four used in Japan and elsewhere. Despite the Mizer’s impressive EPA fuel economy, Mazda’s U.S. sales remained slow, totaling around 61,000 for MY1974 and 65,000 for 1975.