MAZDA

Toyo Kogyo’s product strategy centering around rotary-engine powered vehicles faced a significant turning point when the first oil crisis hit the world in the fall of 1973. Rotary engines were low-pollution engines high in performance, however, they fell short in fuel efficiency. Therefore, in response to the rising crude oil prices worldwide, consumers began to steer clear of rotary engines. It resulted in sales volume plummeting, mainly in the U.S., and a rapid increase in inventory. In 1975, Toyo Kogyo incurred a huge deficit for the first time in its history, inflicting heavy damage to its management as well as to its corporate image. Numerous reconstruction measures were put into place, including a reduction in production volume and labor costs, sales of assets, a change of management, and “All Mazda dispatch,” an initiative to transfer a lot of Toyo Kogyo’s employees to work for sales companies throughout Japan. At the same time, the company’s product lineup was overhauled, making a big shift toward a focus on customers’ viewpoints, rather than focusing on technology. This resulted in products such as Mazda 323/GLC, or Familia AP in Japan, and E-series, or Bongo multi van in Japan , which both offered new values from the user’s point of view. Furthermore, “Phoenix” was launched, a plan with an aim to improve the fuel efficiency of rotary engines by 40 percent. It was decided that compact, yet high-output rotary engines were to be equipped only on selected models that could greatly take advantage of the features offered by such an engine, in an effort toward the engines’ survivability.