The big news for 1975 was the Mazda Cosmo AP, introduced in October after debuting at the Frankfurt Motor Show. A big four-seat coupe reviving the name of Toyo Kogyo’s first rotary production car, the Cosmo AP had some commonality with the Luce, sharing the same wheelbase and track, but in the best American tradition, the coupe was longer, lower, and wider. The new Cosmo’s styling had a distinct Detroit flavor as well, resembling both GM’s “Colonnade” intermediates and the 1974 AMC Matador Coupe.
The Cosmo shared the Luce’s transmissions and engine lineup — the familiar OHC four in 1,796 cc (110 cu. in.) and later 1,970 cc (120 cu. in.) forms for the cheaper models, the 12A and the 13B for rotary cars — but suspension was more like the Capella’s, trading the Luce’s rear leaf springs for coils, trailing arms, and a Panhard rod. All Cosmos had four-wheel disc brakes and 14-inch (356mm) wheels. Japanese-market models also offered the choice of a JATCO automatic or a five-speed gearbox with a fluid coupling rather than a plate clutch, an arrangement shared with the Japanese Luce, but not offered on U.S. export cars, which had a conventional five-speed instead. Upper-level Cosmos were lavishly equipped, in keeping with their lofty prices; the RE Limited started at ¥1,795,000, equivalent to more than $6,000.
If Toyo Kogyo had hoped for a piece of the lucrative American personal luxury car market, they were to be sorely disappointed. Federalized Cosmos arrived in early 1976 to lackluster reviews and general buyer disinterest. Extra weight made the Cosmo slower than the cheaper RX-4 coupe and the Cosmo’s Americanized looks did it no favors with U.S. import buyers; customers who wanted a Detroit-style luxury coupe could buy a Chevrolet Monte Carlo for less money. One New York dealer tried to drum up some interest by running a Cosmo in the 1976 24 Hours of Daytona, but Mazda’s U.S. organization was still struggling to interest buyers in any new Mazda, much less a $6,000 luxury coupe. We don’t have a breakdown of U.S. sales by model, but Mazda only sold around 35,000 cars in the U.S. in 1976 and we suspect very few were Cosmos.
The Cosmo met a similar fate in other export markets, but it turned out to be a big hit in Japan, which took the lion’s share of production: over 50,000 in the first year alone. In July 1977, the Cosmo even spawned a still more American-looking variation, the Cosmo L Landau, with a notchback roof and padded vinyl top.
The Cosmo was popular enough at home to make it profitable, but mediocre export sales made it less successful than anticipated and it was not quite enough to stave off the company’s mounting losses.
THE END OF A DYNASTY
The end of the OPEC embargo had not brought much of a recovery for Mazda. Total sales for 1975 were down an additional 22%; the company declared a loss of ¥17.3 billion (roughly $60 million) for the fiscal year. By the end of the calendar year, Toyo Kogyo was close to bankruptcy.
That was not a happy prospect for the Hiroshima area, where Toyo Kogyo was responsible, directly or indirectly, for about 25% of the industrial jobs, or for the Sumitomo Bank, which was the company’s second-largest shareholder and creditor, with a total financial exposure of around ¥60 billion (more than $200 million). The bank tried to convince Toyota to purchase an equity stake in Toyo Kogyo in hopes of bolstering the company’s capital position, but when that didn’t pan out, Sumitomo Bank agreed to step in directly to keep Toyo Kogyo afloat.
Kouhei Matsuda, who had succeeded his late father as president in 1971, has ended up shouldering much of the blame for the company’s near-collapse. Unlike his father, who had been a persuasive leader of considerable vision, Matsuda ruled through intimidation as much as respect, and many employees and executives were afraid of him. Toyo Kogyo had always been essentially an autocracy; there were many executives and executive committees, but most actual decision-making power resided with the president. Since no one was eager to give Matsuda bad news, much less argue with him, he was slow to recognize problems and slower still to respond even when business turned sour.
Even in the face of the company’s financial crisis, Matsuda resisted outside attempts to change the company’s direction. In January 1976, he reluctantly allowed Sumitomo Bank to appoint bank executive and troubleshooter Tsutomu Murai as Toyo Kogyo’s new executive vice president. Murai and managing director Hiroshi Mineoka, another Sumitomo appointment, enlisted the support of other Toyo Kogyo executives to develop and implement new procedures and strategies throughout the company. Murai also made some important appointments of his own, including making Hiroshima plant manager Yoshiki Yamasaki the new head of production.
Perhaps the most unusual strategy Toyo Kogyo adopted during this period was the dispatched worker program, which put volunteers from throughout the company through a two-week sales training course and then shipped them off to dealerships around the country for temporary stints as car salesmen, making up for the recent losses to Mazda’s sales force. At its peak, the program involved almost 3,000 employees.
In December 1977, Matsuda agreed to relinquish the presidency to Yamasaki, ending the Matsuda family’s five-decade dominion. By the time of Matsuda’s departure, Toyo Kogyo had managed to reduce costs, increase sales and revenues, and improve relationships with its suppliers. Since the company union had agreed to accept delays or reductions in bonus payments as an alternative to salary cuts or layoffs, the cost in jobs and wages was relatively modest. The company reported a net profit of ¥15 billion (perhaps $65 million) for fiscal 1978 and did even better the next two years, due in part to Ford’s belated acquisition of an equity stake: 12.9% in 1979, rising to 25% in 1980. Only seven years earlier, Henry Ford II had declared Toyo Kogyo worthless except for the rotary. Now, Ford was more interested in Mazda’s piston-engined compact pickups than in the rotary engines.
While the company’s late-seventies recovery had a lot to do with the new piston-engined Mazda Familia (a.k.a. Mazda GLC or Mazda 323, depending on market), introduced in January 1977, the financial crisis and reorganization did not mean the end of the rotary engine. Kenichi Yamamoto — by 1977 a director of the company as well as manager of rotary development — persuaded Sumitomo Bank of the rotary’s continued viability, promising even greater reductions in emissions and fuel consumption. With the bank’s support, the rotary would survive into the 1980s, albeit on a more limited basis. Yamamoto’s career also continued to advance: He became senior managing director in 1983, president in December 1984 (shortly after Toyo Kogyo officially became the Mazda Motor Corporation), and chairman from 1987 to 1991.
By the late seventies, Toyo Kogyo’s ambitions for an all-rotary line were fading. While the company mostly avoided canceling products outright — the main exceptions were the Mazda Roadpacer AP and the REPU, both dropped by 1978 — it gradually pruned its export offerings. As existing rotary models reached the end of their lives, they were not necessarily replaced. The new Familia was not offered with a rotary engine, nor was the next Capella, introduced in Japan in October 1978. The luxury-oriented Luce and Cosmo would continue to offer rotary power, but would no longer be exported in any numbers. Both models were dropped from the U.S. lineup at the end of the 1978 model year, vanishing from Australia and other export markets by mid-1979.
The Savanna was another matter. Even with the energy crisis, the Savanna/RX-3 had been a solid success, selling 285,887 units worldwide, and its racing exploits had given the coupe a strong performance image in Japan. Rather than sacrifice that recognition, Toyo Kogyo applied the Savanna name to Mazda’s new rotary-powered two-seat sports car, the Savanna RX-7, which debuted in Japan in March 1978. In other markets, the new car would be called simply RX-7.
Although the Savanna RX-7 would become Mazda’s best-selling rotary for the rest of its 26-year lifespan, the company continued to offer rotary engines in the Japanese-market Luce and Cosmo into the 1990s. The 1982 Cosmo RE Turbo would be the world’s first turbocharged rotary production car, while the 1990 JC Cosmo, sold through Mazda’s Eunos sales channel, would be the first production car to offer a three-rotor engine.
Mazda would continue to develop rotary engine technology into the 21st century, adding catalytic converters, fuel injection, resonance supercharging, twin-scroll and sequential turbocharging, and even a hydrogen-fueled version. Mazda rotaries also saw considerable competition use, culminating in the remarkable four-rotor 787B that won Le Mans in 1991.
The company’s most recent rotary model, the RX-8, made a promising debut in 2003 with first-year production of 60,100 units, but declining sales and difficulty meeting Euro V emissions standards led to its withdrawal from European markets in 2009. It was dropped from the U.S. market at the end of the 2011 model year. Mazda announced in October 2011 that Japanese production would conclude in June 2012 with 1,000 copies of a final Spirit R limited edition.
In 2007, Mazda released information about its next-generation rotary engine, known as the 16X. Still a two-rotor engine, the 16X has a narrower rotor housing than the 13B or current RENESIS, but a greater eccentricity and epitrochoidal radius (comparable to reducing the bore and increasing the stroke of a piston engine) for a total geometric displacement of 1,598 cc (98 cu. in.). Despite the increased displacement, Mazda claimed that a lower surface-to-volume ratio and the adoption of direct injection would give the 16X fuel consumption comparable to the company’s four-cylinder 2000MZR engine, making the 16X at least 30% more efficient than the RENESIS. As of this writing, a shortage of development capital has forced Mazda to table the 16X project, but Mitsuo Hitomi, general manager of powertrain development, has maintained that the company has no intention of abandoning the rotary.