Between 1971 and 1978, Mazda launched nine new rotary-engined vehicles, including the Capella (Mazda RX-2), Savanna (RX-3), Luce (RX-4), Cosmo (RX-5), and the REPU. By 1979, only three survived and the company had come perilously close to collapse. In the second part of our history of Mazda rotary engines, we take a look at those vehicles and trace Toyo Kogyo’s dramatic reversals of fortune in the 1970s.
See Part One of this story
MAZDA IN AMERICA
Toyo Kogyo’s growth in the 1960s was little short of spectacular. In 1960, its first year of passenger car production, the Hiroshima-based company built about 23,000 Mazda automobiles. In 1970, Toyo Kogyo would sell nearly 10 times that number, even though the company had only recently begun to export its cars outside of Asia; European and Australian sales didn’t begin until 1967.
Toyo Kogyo made its first tentative entrée into the American market in April 1970 with a handful of dealer franchises in Oregon and Washington. The first regional office, Mazda Motors of America (NW), opened in Seattle in late May, followed by offices in Florida and Texas. Mazda’s initial U.S. offerings were all piston-engined: Familia 1200 coupes, sedans, and wagons (badged as Mazda 1200), the bigger Luce sedan and wagon (badged as Mazda 1800), and the B1600 compact pickup. Mazda’s first U.S.-market rotary model, the R100 coupe, arrived in July. Total sales for the 1970 model year were around 2,300 units — not bad considering the late debut and tiny dealer network, but no threat to Datsun or Toyota, much less Volkswagen, then the number-one U.S. import.
In December, Toyo Kogyo hired C. R. (Dick) Brown, a young sales executive from AMC’s Canadian operation, to be the first general manager of Mazda Motors of America (MMA), based in a tiny office in Compton, California. Brown’s task was to expand the dealer network and build a presence for Mazda in America. Although he would have little control over the actual product, he asked for and received almost total operational autonomy.
Under Brown’s leadership, the U.S. organization adopted a different dealer strategy than in Japan, where Mazda dealers tended to be small single-franchise stores. To attract big, well-funded dealers, Brown made the initial cost of a new Mazda franchise quite high, but offset it with margins of up to $600 per car, comparable to a full-size Chevrolet, and much better than most other small cars of the time. That approach proved very effective and within two years, Mazda was averaging more than 25 applications for each new franchise. With more dealers, sales climbed to around 21,000 units in 1971 and more than 53,000 in 1972.
The rotary engine quickly became the cornerstone of Mazda’s U.S. strategy. While the rotary engine’s fuel consumption had already become a sales obstacle in markets with higher fuel prices, that wasn’t yet a major concern for American buyers, and the rotary engine’s power, smoothness, and free-revving nature gave it a distinct identity. Following the passage of the Clean Air Act in late 1970, the rotary also seemed the surest way to meet tough federal nitrogen oxide (NOx) emissions standards, then slated to take effect in 1975. By 1972, more than four out of five Mazda vehicles sold in America had rotary power, and the company expected that figure to reach 100% by 1975.
THE CAPELLA RE AND MAZDA RX-2
Until the late sixties, Toyo Kogyo’s bread and butter had been the subcompact Mazda Familia and the tiny R360 and Carol mini-cars; Mazda’s first larger model, the Mazda Luce, had been a commercial disappointment. The increased emphasis on export sales, however, brought with it the need for a broader range of products.
The first of these was the Mazda Capella, launched in Japan in May 1970; it arrived in Australia that October and in U.S. in early 1971. Offered either as a sedan or coupe, the Capella was Toyo Kogyo’s first midsize car, splitting the difference between the Familia and the Luce; a starting price of ¥696,000 (about $1,930) put the Capella about ¥36,000 ($100) above the most expensive Familia. Like its smaller cousin, the Capella was a conventional rear-wheel-drive car with monocoque construction, MacPherson strut front suspension, and a live axle, albeit on rear coils rather than the Familia’s semi-elliptical springs. In size, the Mazda Capella was comparable to the Datsun Bluebird 510, Toyota Corona, Ford Cortina, or Holden LC Torana.
The Capella’s standard engine was a 105 PS (104 hp, 77 kW) SOHC four, but there was also a rotary version, initially called R612 and known in some markets as the Mazda RX-2. The RX-2 was powered by the new 12A rotary engine, essentially the 10A from the Familia Rotary/Mazda R100 with its rotor housings enlarged from 60 to 70 mm (2.36 to 2.76 in.), bringing total swept area to 1,146 cc (70 cu. in.). The 12A engine retained the smaller engine’s dual spark plugs, twin distributors, and combination of side intake and peripheral exhaust porting, but traded the 10A’s single exhaust ports for three smaller ports per chamber, an effort to reduce engine noise. Output was quoted at 130 gross horsepower (96 kW) — 120 PS (118 hp, 88 kW) net — with 116 lb-ft (157 N-m) of torque. Federalized cars, fitted with a thermal reactor to reduce hydrocarbon emissions, had 120 SAE gross horsepower (90 kW) and 110 lb-ft (149 N-m) of torque, although a switch to SAE net ratings for the 1972 model year reduced those figures to 102 hp (76 kW) and 98 lb-ft (133 N-m).
Inevitably, the rotary-engined Mazda Capella overshadowed its piston-engined counterpart, which was largely ignored by the press. The rotary car’s performance was harder to overlook: 0-60 mph (0-97 km/h) took less than 10 seconds while top speed was nearly 120 mph (190 km/h), comparable to the BMW 2002tii or Alfa Romeo Giulia GTV. U.S. cars were a bit slower, but could still blow the doors off of rivals like the Datsun 510 or Ford Capri 2000. Enthusiast reviewers found the Mazda’s suspension a little soft for really aggressive driving, but owners spoke highly of the RX-2’s handling. The Capella also won praise for its fine ergonomics and generally excellent fit and finish.
As with the earlier Familia Rotary/R100, the flies in the ointment were price and fuel economy. The rotary Capella/RX-2 was about 20% more expensive than its piston-engined counterpart, and a lot thirstier to boot. U.S. cars averaged about 18 mpg (13 L/100 km) overall, reaching perhaps 20 mpg (11.7 L/100 km) on the highway. Cars without the thermal reactor did only a little better, which limited sales at home and in Europe. Even in the U.S., consumer surveys found owners dismayed with the rotary engine’s fuel consumption.
Despite its drawbacks, the RX-2 had much to offer. It won Road Test‘s Car of the Year Award in January 1972 and for a time, demand for the RX-2 in the U.S. market outpaced supply. The RX-2 sold well enough that Mazda Motors of America actually dropped the piston-engined Mazda 618 at the end of the 1972 model year.
In the fall of 1971, the Capella received a modest facelift, giving non-U.S. cars dual round headlights like those fitted to the federalized Mazda 618 and RX-2. Automatic transmission, already available on piston-engined Capellas, was now optional on the rotary versions as well, a first. (The NSU Ro80 had a torque converter, but its transmission was not actually automatic.) The Mazda transmission was made by the Japanese Automatic Transmission Company (JATCO), a joint venture formed in late 1969 by Toyo Kogyo, Ford, and Nissan. The JATCO transmission was a conventional three-speed-plus-torque-converter arrangement, albeit with a special high-stall converter and different shift points to suit the rotary engine’s torque curve. The automatic hampered off-the-line acceleration, but reviewers found that the JATCO unit otherwise had surprisingly little effect on performance. The automatic became optional in Australia in early 1972 and in the U.S. that December. (A five-speed manual gearbox was introduced on the Japanese-market Mazda Capella GSII coupe in 1972, but it was not offered on U.S. RX-2s; we don’t know if it was available in other export markets.)
SAVANNA RE: THE MAZDA RX-3
Around the same time the Series 2 Capella appeared in Japan, Toyo Kogyo introduced the next phase of its expansion plan: the Mazda Savanna, which bowed in September 1971. The Savanna was essentially a rotary-powered version of the new Mazda Grand Familia, a larger subcompact positioned between the Familia and Capella. Interestingly, although the Savanna was looked much like its piston-engined counterpart (known in other markets as 808 or 818) and would be offered with the same body styles, Toyo Kogyo marketed it as a separate entity — a distinct contrast with the rotary Familia, which it would shortly replace.
Like the Familia Rotary, the initial Japanese-market Savanna used the 982 cc (60 cu. in.) 10A engine, now rated at 105 PS (104 hp, 77 kW). Since the Savanna was somewhat heavier than the Familia, performance suffered a bit; claimed top speed was 109 mph (175 km/h). Prices were similar to the Familia: ¥600,000 (about $1,725) to start, rising to ¥700,000 (about $2,015) for a GR sedan or GS coupe.
In early 1972, Toyo Kogyo added a Savanna rotary wagon — another first — and a new GT coupe with lowered sport suspension, a five-speed gearbox, and the 1,146 cc (70 cu. in.) 12A engine from the rotary Capella. Weighing almost 140 lb (65 kg) less than the Capella, the Savanna GT quickly established itself as Mazda’s top rotary performer.
That spring, the Savanna began arriving in export markets, usually badged Mazda RX-3. In Australia, New Zealand, and other markets, the RX-3 had the 10A engine, but U.S. cars used the larger 12A, albeit with a more restrictive exhaust system that trimmed output to 90 net horsepower (67 kW) and 96 lb-ft (130 N-m) of torque. Export cars had fewer trim options than did their Japanese counterparts, and the five-speed gearbox was not initially available, leaving a choice of four-speed manual or JATCO automatic.
Although the Savanna/RX-3 was a bit slower than the RX-2, the smaller car was usefully cheaper — by as much as $270 in the U.S. Before long, the Savanna was outselling its larger brother by a substantial margin, bolstered in part by an impressive competition career (see the sidebar below). More than half of all Savannas were coupes; of the rest, it appears that wagons may have outsold sedans despite not being offered in all markets.
The Mazda Savanna got a mild makeover in late 1973, including a new front clip and taillights, the latter a response to emerging Japanese safety regulations. The 10A engine was dropped, replaced by the latest single-distributor version of the 12A. Like U.S. cars, the JDM Savanna now had a thermal reactor to reduce hydrocarbon emissions. Although Japan’s own pending emissions standards were still mired in political debate, as an interim measure, the government had decided to offer tax incentives for the purchase of low-emissions vehicles. Models with the thermal reactor (which Mazda christened REAPS, Rotary Engine Anti-Pollution System) were called Savanna AP, for “Anti-Pollution.”
Even with the bigger engine, the addition of the thermal reactor and a 100 lb (45 kg) weight increase meant that Series 2 Savannas were no faster than before. Nonetheless, the Savanna remained the most popular of the early Mazda rotaries, which for a time was enough to make the RX-3 the world’s most successful rotary-engined car. In its first two and a half years alone, Mazda built 218,842 copies.
MAZDA LUCE RX-4
The introduction of the Savanna lifted Mazda’s annual rotary production past the 100,000-unit mark, but Toyo Kogyo remained committed to offering the rotary in nearly all of its products. Next in line was the second-generation Mazda Luce, which arrived in October 1972. (Except for the rare front-drive R130, the previous-generation Luce had been offered only with piston engines.) Unlike its Bertone-styled predecessor, the second-generation Luce was designed in-house; the new car had sporty proportions, but drew criticism for its fussy detailing.
The new Mazda Luce was initially offered as a four-door sedan in Special, GR, and GRII trim, or a two-door hardtop coupe in SX, GS, GSII, or luxurious Grande trim. (A four-door wagon — offered in the same trim levels as the sedan plus a Grand Turismo version with fake wood paneling — was added in 1973.) Non-rotary cars were once again powered by a 1,796 cc (110 cu. in.) SOHC four, but the rotary models had the 12A engine with either 120 or 130 PS (118 or 128 hp, 88/96 kW) and offered a choice of four- or five-speed manual gearboxes or JATCO automatic. There was also a thermal reactor-equipped AP version, which became a popular fleet vehicle in Japan.
A facelifted Series 2 Luce arrived in December 1973, including a new front clip for sedans that made them look more like the coupes. Both coupe and sedan were now available in GT form, with wider tires, radius rods for the rear axle, and a new 1,308 cc (80 cu. in.) 13B engine with 135 PS (133 hp, 99 kW) and 133 lb-ft (180 N-m) of torque. The extra power made the Luce GT the fastest rotary Mazda since the Cosmo Sport L10B; Toyo Kogyo quoted a top speed of 121 mph (195 km/h) and a 0-400 meter (quarter mile) acceleration time of 15.8 seconds.
The first Luce exports began in early 1973, usually badged Mazda 929 in piston-engined form or Mazda RX-4 with rotary power. American buyers didn’t get the piston-engined Luce (the 929 wouldn’t be offered in the States until 1988), but the U.S. RX-4 arrived in early 1974. The RX-4’s sole engine was the federalized 13B, rated at 110 net horsepower (82 kW) and 117 lb-ft (159 N-m) of torque, mated to either a four-speed gearbox or the three-speed automatic. The five-speed gearbox wouldn’t arrive until 1976, part of an effort to improve fuel economy.
TROUBLE IN PARADISE
By the fall of 1973, Toyo Kogyo was riding high. Total passenger car production for the calendar year would be more than 450,000 units, up 50% from 1970. To accommodate its export business, the company now had assembly plants in Malaysia, Indonesia, New Zealand, and South Africa, with a new Philippine plant following in January 1974. U.S. sales for the 1973 model year had totaled more than 117,000, nearly twice the previous year’s figure.
By 1973, interest in the rotary engine was also reaching its peak. The pending U.S. NOx standards meant that nearly every automaker in the world was at least considering offering rotary power. GM was paying $5 million every six months on a $50 million license from NSU and Curtiss-Wright while promising that the two-rotor GM Rotary Combustion Engine (GMRCE) would go on sale by the 1975 model year. Nissan and Toyota had taken out licenses of their own in 1971 and 1972, while Ford hoped to get a leg up by acquiring a piece of Mazda. (Negotiations collapsed when Toyo Kogyo made it clear the rotary would not be part of the deal.) Mazda’s American advertising cheerfully pointed out that what other automakers were still struggling to develop, Mazda already had; the company built its 600,000th production rotary in 1973.
Despite that success, all was not rosy for Toyo Kogyo and the company was already facing a number of serious problems.
The first issue was currency exchange rates. Since 1949, the value of the Japanese yen had been fixed at ¥360 to one U.S. dollar. The Nixon Administration’s decision in August 1971 to abandon the gold standard, which had kept the value of the dollar relatively stable, led to the collapse of the Bretton Woods system of fixed exchange rates based on the dollar. Allowed to “float” on the currency trading market, the yen’s value quickly increased, climbing to around ¥270/dollar by 1973. That shift, combined with new U.S. tariffs on imported goods, led to an escalation in the U.S. prices of various Japanese-made products as manufacturers struggled to keep pace. That inflation affected all Japanese automakers doing business in the U.S., but was particularly troublesome for Mazda, whose rotary products had been fairly expensive to begin with.
The second problem concerned the rotary engine’s reliability and maintenance costs. Despite their mechanical simplicity, the Mazda rotary engines were not necessarily any cheaper to maintain than a four-cylinder reciprocating engine. Oil consumption was inherently high and early engines had two ignition systems to maintain as well as a prodigious appetite for spark plugs. Both J.D. Power & Associates and Consumer Union (publisher of Consumer Reports) reported problems with seal failures in federalized 10A and 12A engines. In sharp contrast to NSU’s experience, Mazda’s apex and corner seals turned out to be surprisingly robust in service — several automotive magazines did teardowns of high-mileage Mazda rotary engines and found little wear in those areas — but the same was not necessarily true of the oil seals or the gaskets mating the rotor housings to the side plates. On early engines, those seals were rubber O-rings, which took a beating from the rotary engine’s considerable waste heat, limiting the seals’ lifespan.
By the 1973 model year, Toyo Kogyo had developed more durable seals, but some owners complained that the company was reluctant to replace the seals on earlier cars under warranty. Mazda’s U.S. organization responded in March 1974 by adding a three-year, 50,000-mile (62,500-km) warranty for new Mazda rotary models, but complaints about earlier cars eventually resulted in a lawsuit that was not settled until 1980.
The third problem was the rotary engine’s high fuel consumption. As we mentioned in Part 1 of this story, the rotary engine’s combustion chamber has a large surface area for its volume, resulting in reduced thermal efficiency; more of the heat of combustion is lost to the cooling system than in a typical overhead-valve piston engine. Furthermore, the large surface area can create an effect called wall quench, where some of the vaporized fuel mixture re-condenses on cooler areas of the combustion chamber (or even on the rotor itself) and passes into the exhaust stream without burning.
Fuel consumption was even heavier on emission-controlled cars thanks to their thermal reactors. The thermal reactor was essentially an afterburner, injecting fresh air into the exhaust stream to continue the combustion process. Although the afterburner’s purpose was to reduce hydrocarbon emissions at the tailpipe, the thermal reactor didn’t work effectively unless the exhaust leaving the engine had high levels of unburned hydrocarbons. To accomplish that, Toyo Kogyo opted for very rich fuel mixtures, making Mazda’s early emissions-controlled cars even thirstier.
By U.S. standards, the rotary engine’s fuel consumption only seemed unreasonable in comparison to four-cylinder rivals; it was roughly comparable in fuel economy to a big American six. However, when the U.S. Environmental Protection Agency (EPA) ran a 1973 Mazda RX-2 through the new EPA simulated fuel economy cycle, the RX-2 returned a dismal 10.6 mpg (22.2 L/100 km); the smaller RX-3 did little better. The EPA eventually adopted new test procedures intended to more accurately reflect real-world driving conditions (including the now-familiar city/highway split), but that did Mazda little good in the short term; the early test results put Mazda rotary models in the same league as full-size American luxury cars with big V8s.
Kenichi Yamamoto, the head of rotary development, was already working on improving the rotary engine’s fuel economy, but political events elsewhere in the world were moving much faster, creating a crisis that would nearly become Mazda’s undoing.
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 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.
MAZDA COSMO RX-5
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 new Mazda 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 JDM Mazda 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. The federalized Mazda Cosmo 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 Mazda 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 engine’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 Mazda 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 Mazda 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 the company’s new rotary-powered two-seat sports car, the Mazda Savanna RX-7, which debuted in Japan in March 1978. In other markets, the new car would be called simply Mazda RX-7.
Although the Savanna RX-7 would become Mazda’s best-selling rotary model for the rest of its 26-year lifespan, the company continued to offer rotary engines in the Japanese-market Mazda 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 rotary engines 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 Mazda 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 Mazda 16X has a narrower rotor housing than the 13B or current RENESIS engine, 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.
Considering the rotary engine’s ups and downs in the marketplace, that perseverance may seem quixotic, but Mazda has remained committed to the rotary engine for far longer than even NSU, which pioneered the design with inventor Felix Wankel in the 1950s. While poor fuel economy ultimately limited the Mazda rotary engine’s impact on the family sedan market, the company nonetheless managed to sell a million rotary-powered vehicles from 1967 to January 1978. The first-generation Mazda RX-7 would account for another 500,000 units between 1978 and 1985.
Moreover, Mazda succeeded in making the rotary a viable production engine, where even Daimler-Benz and General Motors had given up. That’s quite an accomplishment for a small automaker, and it’s a fine legacy for Kenichi Yamamoto and the late Tsuneji Matsuda, who decided back in 1960 that the rotary engine would become his company’s signature. Fifty years later, it still is.
(AUTHOR’S NOTE: Kenichi Yamamoto died on December 20, 2017, about seven years after this article originally appeared and 16 years after he retired as chairman of Mazda Motor Corporation. He was 95 years old.)
AUTHOR NOTE AND ACKNOWLEDGMENTS
The author would like to thank Johnny Aguirre, Alain Durand, ‘verner_oscar,’ and ‘Telkine’ for the use of their photos; Halie Schmidt of Hill & Knowlton, Mazda’s PR agency, for her assistance in obtaining images and information from Mazda’s archives (some of which were provided on a nifty flash drive shaped like a trochoidal rotor); and Bob Nichols for the generous loan of his camera to take some of the author photos in this article.
The title of this article was inspired by the tagline of a mid-nineties U.S.-market Mazda ad, although the original ad was for the Miata, not a rotary-engined car.
For the record, the author has never owned a Mazda rotary, but does own a Mazda3 sedan, and years ago was compensated by a marketing firm hired by Mazda for participating in a couple of owner focus groups related to that model.
NOTES ON SOURCES
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Additional information on Mazda’s rotary competition efforts came from “Bathurst 1971: Hardie-Ferodo 500,” “Bathurst 1972: Hardie-Ferodo 500,” “Bathurst 1973: Hardie-Ferodo 1000,” “Bathurst 1974: Hardie-Ferodo 1000,” “Bathurst 1975: Hardie-Ferodo 1000,” and “Bathurst 1976: Hardie-Ferodo 1000” (no date, Unique Cars and Parts, www.uniquecarsandparts. com.au, accessed 7 November 2011); Patrick Bedard, “Rotary Racer and Piston Politics,” Car and Driver Vol. 19, No. 10 (April 1974), pp. 58-74; Jim Donnelly, “Baby, It’s You: IMSA RS, the Ellis Island of Japanese-branded sedan racing,” Hemmings Sports & Exotic Car #56 (April 2010); “Former Hunterdon resident Walt Bohren, Mazda car racer for many years, drowns in British Virgin Islands,” Hunterdon County Democrat 10 February 2011, www.nj. com, accessed 13 October 2011; Michael J. Fuller, “An Interview with Jim Downing,” conducted 20 January 1996 (2000, www.mulsannescorner. com/ downing.htm, accessed 12 October 2011); Alexis Gosseau, “IMSA RS Challenge : everybody could go racing” (25 October 2009, IMSAblog, alex62.typepad. com/ imsablog/ 2009/ 10/ imsa-rs-challenge-everybody-could-go- racing.html, accessed 10 October 2011); Berny Herrera, “Rotary Power Shines at the 2006 SCCA Solo National Championships” (4 October 2006, RotaryNews.com, rotarynews. com/node/view/844, accessed 12 October 2011); Jeff Koch, “Le Mans-winning Mazda 787B to appear at the Japanese Classic Car Show” (24 August 2011, Hemmings Blog, blog.hemmings. com/index.php/2011/ 08/24/ le-mans-winning-mazda-787b-to-appear-at-the- japanese-classic-car-show/, accessed 13 October 2011); Aaron Robinson, “Checkered Past,” Car and Driver April 2007, www.caranddriver. com, accessed 15 October 2011; Chris Rosamond, “Epic Mazda 787B Rides Again: 700hp rotary racer to return for Le Mans demo” (23 May 2011, PistonHeads, www.pistonheads.com/news/default.asp?storyId=23665, accessed 13 October 2011); “Second Crop of Classes Halfway to a Solo National Championship” (27 September 2007, SCCA, 184.108.40.206/ newsarticle.aspx? hub=3&news=3163, accessed 12 October 2011); and Brock Yates, “The New Little Engine That Couldn’t,” Sports Illustrated 16 April 1973, pp. 79-81, sportsillustrated.cnn. com, accessed 19 October 2011.
Additional information on the environmental legislation of the 1970s and the 1973 OPEC embargo came from Chris Bishop, ed., The Encyclopedia of 20th Century Air Warfare (London: Amber Books/Barnes & Noble, 2004); California Environmental Protection Agency Air Resources Board, “Key Events in the History of Air Quality in California” (13 January 2011, ARB, www.arb.ca. gov/ html/brochure/ history.htm, accessed 18 October 2011); Anthony Curtis, “Is cleanliness three-cornered?” New Scientist and Science Journal Vol. 49, No. 740 (25 February 1971), pp. 415-417; Environmental Protection Agency, “Milestones” (9 July 2007, EPA, www.epa. gov/ oms/ invntory/ overview/solutions/ milestones.htm, accessed 10 October 2011); David Halberstam, The Reckoning (New York: William Morrow and Company, 1986); Michio Hashimoto, “History of Air Pollution Control in Japan,” How to Conquer Air Pollution: A Japanese Experience (Studies in Environmental Science 38), ed. Hajime Nishimura (Amsterdam: Elsevier Science Publishers B.V., 1989), pp. 1–90; David C. Isby, Jane’s Air War I: Fighter Combat in the Jet Age (New York: Collins Reference, 1997); National Traffic Safety and Environmental Laboratory, “Overview and Future Prospect of Emissions Regulations in Japan” (4 February 2003, NTSEL, www.ntsel. go.jp/e/ symposium/040203session4.pdf, accessed 10 October 2011); Donald Neff, Warriors Against Israel: How Israel Won the Battle to Become America’s Ally 1973 (Ft. Collins, CO: Linden Press, 1981); Hajime Nishimura and Masayoshi Sadakata, “Emission Control Technology,” How to Conquer Air Pollution: A Japanese Experience, pp. 115–115; the official website of the Organization of the Petroleum Exporting Countries, www.opec. org, accessed 14 November 2011; and the Wikipedia® entries on the 1973 oil crisis (en.wikipedia.org/wiki/1973_oil_crisis, accessed 13 October 2011) and the Yom Kippur War (en.wikipedia.org/wiki/Yom_Kippur_War, accessed 14 November 2011).
Additional information came from the Auto Editors of Consumer Guide, “1963-1966 NSU Wankel Spider” (24 July 2007, HowStuffWorks.com, www.howstuffworks. com/ 1963-1966-nsu-wankel-spider.htm, accessed 7 October 2011); International Money Fund, “Cooperation and reconstruction (1944–1971)” and “The end of the Bretton Woods System (1972–1981),” About the IMF: History, N.d., www.imf.org/external/about/history.htm, last accessed 2 April 2014; Jim Kaler, “Capella” (13 December 1998, University of Illinois Department of Astronomy, stars.astro. illinois.edu/ sow/ capella.html, accessed 13 October 2011); “Kohei Matsuda, Former President of Mazda,” New York Times 4 August 2002, www.nytimes. com, accessed 14 November 2011; Jona Lendering, “Ahuramazda and Zoroastrianism” (no date, www.livius. org/ ag-ai/ ahuramazda/ ahuramazda.html, accessed 13 October 2011); “NSU Wankel Spider” (2008, NSU Prinz, www.nsuprinz. com/ Models /NSU_Spider.asp, accessed 7 October 2011); Masaaki Sato, The Honda Myth: The Genius and His Wake (New York: Vertical, Inc., 2006), and The Toyota Leaders: An Executive Guide, trans. Justin Bonsey (New York: Vertical, Inc., 2008); “Showroom Stock Sedans: The Nine Cars on the Track,” Car and Driver Vol. 17, No. 11 (May 1972), pp. 38-45; Eiji Toyoda, Toyota: Fifty Years in Motion (Tokyo: Kodansha International, 1987); the Wikipedia entries on the Bretton Woods system (en.wikipedia.org/wiki/Bretton_Woods_system, accessed 1 November 2011), Jim Downing (en.wikipedia.org/wiki/Jim_Downing, accessed 12 October 2011), Jujiro Matsuda (en.wikipedia.org/wiki/Jujiro_Matsuda, accessed 13 October 2011), the Mazda Capella (en.wikipedia.org/wiki/Mazda_Capella, accessed 28 October 2011), Mazda Cosmo (en.wikipedia.org/wiki/Mazda_Cosmo, accessed 16 October 2011), the Mazda Familia (en.wikipedia.org/wiki/Mazda_Familia, accessed 26 October 2011), Mazda Grand Familia (en.wikipedia.org/wiki/Mazda_Grand_Familia, accessed 3 November 2011), the Mazda Luce, en.wikipedia.org/wiki/Mazda_Luce, accessed 16 October 2011, the Mazda R100 (en.wikipedia.org/wiki/Mazda_R100, accessed 7 October 2011), the Mazda RX-2 (en.wikipedia.org/wiki/Mazda_RX-2, accessed 9 October 2011), the Mazda RX-3 (en.wikipedia.org/wiki/Mazda_RX-3, accessed 10 October 2011), NSU Motorenwerke (en.wikipedia.org/wiki/NSU_Motorenwerke, accessed 7 October 2011), the NS Savvanah (en.wikipedia.org/wiki/NS_Savannah, accessed 13 October 2011); The Return of Ultraman (en.wikipedia.org/wiki/The_Return_of_Ultraman, accessed 9 October 2011), and the SS Savannah (en.wikipedia.org/wiki/SS_Savannah, accessed 13 October 2011).
Some historical exchange rate data for the dollar and yen came from Lawrence H. Officer, “Exchange Rates Between the United States Dollar and Forty-one Currencies” (2011, MeasuringWorth, https://www.measuringworth.org/exchangeglobal/, used with permission). Exchange rate values cited in the text represent the approximate equivalency of Japanese and U.S. currency at the time, not the contemporary U.S. suggested retail prices, which are cited separately. Please note that all exchange rate equivalencies cited in the text are approximate; this is an automotive history, not a treatise on currency trading or the value of money, and nothing in this article should be taken as financial advice of any kind!
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