Sitting here watching baseball reading a sales report for mazda 8s and was wondering,Are rotaries cheaper to make then piston engines?Simple logic tells me it would be.Just kinda curious if it allowed mazda to upgrade interior handleing ect by saying money on the rotary.Any thoughts?

i remember from way back long ago, probably around march or so, there was a mention that the rx-8 is expensive to build, and the renesis is also relatively expensive to build, compared to say...the duratec v6. they are hand assembled after all.

do we even keep posts that old? :P

What the original poster said is true. I remember reading that the Renesis is cheaper to produce than any of the 6 cylinders that Mazda produces. I'm not sure about the 4 bangers though.

What exactly is the latest on sales numbers? I haven't seen anything lately on them.

either dealers have more in or demand is down

Originally posted by daedelgt
What the original poster said is true. I remember reading that the Renesis is cheaper to produce than any of the 6 cylinders that Mazda produces. I'm not sure about the 4 bangers though.

I'd have to disagree - I don't know where you read this, but it's not true. Sure, the Renesis has fewer moving parts, so raw component cost is less - but machining the housings is very expensive, and the engines are all hand assembled in Japan. That's much more expensive than the robot assembly used for almost all piston engine production, and is the real limiting factor in Renesis production volumes - that's why you won't see a Renesis in a lower-cost vehicle like a Miata, for example.

In the 70s, Japanese labour was dirt cheap, and hand-assembling rotaries for RX-2s, 3s, 4s, etc. was no big deal. There's no way that Mazda could afford to produce large volumes of rotary engines for low-cost vehicles like that currently.

Regards,
Gordon

Plus somehow someone has to pay for all the R&D for the car.

I don't think that I read it anywhere, but that I saw it on one of the various rotary "specials" on TV. I would tend to believe the fact.

Remember, not only do they have to pay for componentry, but also the man hours for putting together the motor. They have, what? Three guys making the Renesis?

There has to be more than 3 guys!

Mazda has said they intend to ship 30,000 RX-8's in the first year.

If it was 3 guys they must move at warp speed.

Assuming these guys work 40 hour, 5 day weeks, and take 3 weeks off a year, we get:

48 weeks x 40 hours = 1920 hours per man.
Times 3 guys = 5,760 hours.
5,760 / 30,000 = .192 hours per engine.

I doubt those 3 men can build an engine every 11 minutes or better!

The hand building should not drive up the cost all that much.

If we assume there are 30 guys building engines on the line:
30,000 engines a year.
30 guys
1,000 engines per builder, per year.

Let's say these are expensive employees, and cost the company $100,000 a year per man

30 x 100,000 = $3,000,000 in labour.

That is about $100 labour per engine.

Also, if we look at the alternative of machine built engines.
What would the machinery cost?
I do not know how much, but i am sure it is not cheap equipment!

And they sell an engine for how much?

I believe a replacement engine sells for around $5,000 at the dealers.

canzoomer knows his stuff

In an anterview with one of the mazda designers I belive he said the miata could not get the Renesis, because it would drive up the cost of the car by $3000 (for the engine)

That's bs if you were ask me. There is no way it costs 3k more for the rotary. For instance, a replacement for the 99 Miata engine, whatever is is, is about 5k. That number is directly from their forums, on severla posts. Sounds like a familiar number, eh?

Obviously there is a lot more to pricing than just the raw production costs.

Let's compare the RX-7 to the RX-8

When they stopped selling the 3rd gen RX-7 turbos in North America ( 1995 I believe) the stated reason was that the price point had become too high, and as it was an expensive car to build.. yaddah..yaddah..
They were selling these 3rd gens for $37,800 list back in 1995
Based on the inflation rates in the USA over the past few years this is about $45,000 in todays dollars.

So, now here we are with the 2004 RX-8.
Same rotary engine, still has some aluminum body parts, way more trick expensive toys like HID headlights, air conditioning, leather, and so on.
I just paid $42,000 Canadian for mine, which is a GT with all the toys except the moon roof and the NAV.
That is about $31,000 US.
A base Sport model can be had for around $28K

Go figure!

Sources:
Inflation rates:
http://www.westegg.com/inflation/
http://www.jsc.nasa.gov/bu2/inflateCPI.html

Price of 1995 Mazda RX-7:
http://www.epinions.com/auto_Make-1995_Mazda_RX_7/display_~full_specs

Originally posted by canzoomer
When they stopped selling the 3rd gen RX-7 turbos in North America ( 1995 I believe) the stated reason was that the price point had become too high, and as it was an expensive car to build.. yaddah..yaddah..

Hi Canzoomer,

The real reason for the last RX-7's demise was economics and emissions. While the quoting of US inflation prices is interesting, note that the real reason for the high price of the last RX-7 (and other Japanese sports cars) was the exchange rate between the dollar and yen.

While the 70s and 80s exchange rates were extremely favorable for Japan made vehicles, the 90s were a different story. With the higher prices, the RX-7s, Zs, and Supras simply became less attractive for their cost. By the end, Enough people weren't buying the Japanese sportscars to make it worth all the hassle of passing all of the US regulations and importing them.

The new EPA emissions regulations that were put into place in 1996 were the last straws on the camels back.

1990 Clean Air Act tailpipe emissions standards
............. HC ..... CO ..... NOx
Tier 2 .... .41 .... 3.4 .... 1.0

1996 Tailpipe emissions standards
............. HC ..... CO ..... NOx
Tier 2 .... .25 .... 3.4 .... 0.4

Even if Mazda could engineer the FD3S to meet the new standards, it was simply not worth it.

To get back to the topic a little bit, I have read before that the Renesis is similar in cost to 6 cylinder engines for Mazda.

The "Rotary Redux" article by Roger Schreffler (Mar 1, 2002) mentioned the below about the Renesis cost:

"...Mazda expects to produce the car's Renesis (name derived from “rotary” and “genesis”) rotary engine for around $2,000..."

"Predicated on monthly output of 5,000 units, the company says, amazingly, that Renesis' cost is slightly less than it would pay for a standard V-6 engine."

I've read other sources that say the renesis costs slightly more than a 6 cylinder engine.

Brian

Originally posted by canzoomer
The hand building should not drive up the cost all that much.

If we assume there are 30 guys building engines on the line:
30,000 engines a year.
30 guys
1,000 engines per builder, per year.

Let's say these are expensive employees, and cost the company $100,000 a year per man

30 x 100,000 = $3,000,000 in labour.

That is about $100 labour per engine.

Also, if we look at the alternative of machine built engines.
What would the machinery cost?
I do not know how much, but i am sure it is not cheap equipment!

And they sell an engine for how much?

I believe a replacement engine sells for around $5,000 at the dealers.


I hate to inject accounting into this, but corporate economics and standard accounting methods make equipment much cheaper than manpower, holding all other variables neutral (but, of course, we don't have numbers for all the other variables, so we can only really guess). Corporations can depreciate the value of equipment over time, so if they depreciate the equipment on normalized schedule, they are "paying" less for the equipment each year due to inflation, even though they depreciate the same dollar amount each year. Employee costs tend to rise with inflation and cost of living, becoming more expensive each year.

I don't know how long posts stay on the Forum, but earlier this year there was a video of a guy at Mazda assembling a Renesis engine, it was quick. Maybe someone can dig up that link. IMO, It appeared much easier and faster than any piston engine would be to assemble, manually or automated.

Now THAT would be cool and interesting... I'm off to the search page!

Here's the link I found:

Renesis factory video (http://www.rasterwerks.com/vid/RENESIS_high.wmv.zip)

BTW, here's the original thread (http://www.rx8club.com/showthread.php?s=&threadid=2550&highlight=Renesis+engine+video)

Some good discussion similar to what we've been talking about on this thread

Cost all depends on how long that it takes to build the engine compared to time allowed to build the engine. There is usually alot of waste in the assembly process (the whole vehicle) when production first starts. So if the people building the engine get more time than it actually needs, that will drive the cost up.

This is just a theory but here it goes:

Mazda is the only large scale producer of the rotary type engines. They hold a monopoly on it. Mazda could charge whatever they felt like, because rotary enthusiest would have no other option other than to buy from Mazda, or unless they went the piston route. I believe the cost of production could be lowered if mazda wanted to, but why would they? They'll be the ones losing profit.

Originally posted by Tronics
This is just a theory but here it goes:

Mazda is the only large scale producer of the rotary type engines. They hold a monopoly on it. Mazda could charge whatever they felt like, because rotary enthusiest would have no other option other than to buy from Mazda, or unless they went the piston route. I believe the cost of production could be lowered if mazda wanted to, but why would they? They'll be the ones losing profit.

And here is counterpoint:

Mazda tried that with the RX-7 3rd gens. They jacked up the price over the 2nd gen by half, and sold very few cars. And in 1995 they stopped importing them to N. America.

Originally posted by Tronics
This is just a theory but here it goes:

Mazda is the only large scale producer of the rotary type engines. They hold a monopoly on it. Mazda could charge whatever they felt like, because rotary enthusiest would have no other option other than to buy from Mazda, or unless they went the piston route. I believe the cost of production could be lowered if mazda wanted to, but why would they? They'll be the ones losing profit.

Hi Tronic,

Your opinion does not seem thought out completely. Are you stating that you believe that companies lose profit when they lower production costs?

There are other very simple economic reasons why the last gen RX-7 became too expensive. There doesn't seem to be a reason to have to resort to conspiracy theories to explain things here?

Brian

Originally posted by canzoomer
And here is counterpoint:

Mazda tried that with the RX-7 3rd gens. They jacked up the price over the 2nd gen by half, and sold very few cars. And in 1995 they stopped importing them to N. America.

Hi Canzoomer,

I'm not sure if you read my earlier posts on this thread but the main reason why the 3rd gen RX-7 became too expensive is because of the varying Yen-Dollar exchange rates.

The 1985 exchange rate was 238 yen/dollar while the 1995 exchange rate dropped to about 94 yen/dollar. This had a huge effect on the US prices of all of the Japanese exports and we saw the end of the Z, the Supra and the RX-7. The volatility of the exchange rates is a major reason why many of the Japanese automakers pushed harder to build more plants in other countries.

Brian

Originally posted by Buger
Hi Tronic,

Your opinion does not seem thought out completely. Are you stating that you believe that companies lose profit when they lower production costs?

There are other very simple economic reasons why the last gen RX-7 became too expensive. There doesn't seem to be a reason to have to resort to conspiracy theories to explain things here?

Brian

Yes, I'm stating that companies lose profit if they lower prices when they do not have to. Might not be an actual lose, but they will surely not be making the most money they can. And I agree, the exchange rates screwed over the rotary. If mazda/ford wanted to they could transform a current Ford factory into a rotary production plant here in the US, but then again, it would be to costly if the 8 did not do to well.

I don't know how auto manufacturers set up their facilities, but I would think the startup cost for a rotary engine plant is more expensive in proportion because they're so uncommon. The actual engine production, once the plant is set up, might be cheaper, but I would think the plant itself is more expensive.

If you want to manufacture a piston engine, there are probably hundreds, or maybe thousands, of manufacturing facilities that do the same around the world. You can copy their techniques, easily outsource portions of the production process, and get a lot from other vendors. Not only that, but you can put suppliers in a bidding war with each other to reduce costs.

To make a rotary engine facility, the only resources Mazda has is knowledge from previous Mazda manufacturing of rotary engines. Any specialized equipment for the job has to be custom made. They can purchase the metal and plastics from the same places everyone else does, but they need unique configurations.

I could be totally wrong, of course. This is just a guess.

Originally posted by Buger
Hi Canzoomer,

I'm not sure if you read my earlier posts on this thread but the main reason why the 3rd gen RX-7 became too expensive is because of the varying Yen-Dollar exchange rates.

The 1985 exchange rate was 238 yen/dollar while the 1995 exchange rate dropped to about 94 yen/dollar. This had a huge effect on the US prices of all of the Japanese exports and we saw the end of the Z, the Supra and the RX-7. The volatility of the exchange rates is a major reason why many of the Japanese automakers pushed harder to build more plants in other countries.

Brian
Perhaps, but it does not seem to have had much effect in the last 10 years.
In November 1995 the dollar/yen rate was 1-102
In November 2002 it sat at 1-102
Today it is at 1-109

More interesting is that in January it was at 1-120, but we have seen no price changes this year from the Japanese auto makers.

If that were a truly important factor one would see that the price of the RX-8 would have changed, but it has not.

It is pretty well a given that when rates change out of their favour they will howl and complain.

But when it changes to their favour do they complain? Of course not!

These are businessmen, and they play it up and down, just as people do in the stock markets.

As for the cost factor due to exchange rates, about the only variable that is affected is the cost of labour involved.

If we take that into account the change in cost and price should not be that significant. Remember, when the rates changed as drastically as they did the Japanese automakers had an inventory, which rose in value. This offset the cost increases for at least one year.

We can argue as much as we want, but we will never reach a definative answer unless Mazda releases some information about costs, which IMO they never will. Who knows how much each RX-8 costs to build for mazda. Could be half the amount at invoice, 1/4, 1/3, and so on. Your guess would be as good as mine.

Originally posted by Tronics
I believe the cost of production could be lowered if mazda wanted to, but why would they? They'll be the ones losing profit.

Last attempt: Lowered production costs lead to increased profit.

Originally posted by Tronics
Yes, I'm stating that companies lose profit if they lower prices when they do not have to. Might not be an actual lose, but they will surely not be making the most money they can.

If you believe that Mazda feels that they have a monopoly and can set their prices artificially high, why would they lower prices if their production costs went down. If a manufacturers production costs go down, they make more profit.

Whatever the case, this is all economics and perhaps some economics people would want to discuss this further.

Looks like many people disagreed that the Renesis is expensive to produce, but I looked up my reference for that: Bob Hall, a journalist who spent ~14 years as a product planner for Mazda (1982-1996) and is credited as being the father of the Miata, participates regularly at www.miataforum.com under the username bwob. In this thread (http://www.miataforum.com/cgi-bin/ultimatebb.cgi?ubb=get_topic;f=11;t=012706) discussing the possibilities for the next generation Miata, he wrote:The use of a rotary in a Miata is mitigated by the fact the rotary (in old 13b or Renesis form) is a very expensive engine to manufacture. The mechanized aspect of its construction (primarily milling and machining processes) is not such a big deal, but the fact that final assembly is almost done entirely by hand is a real problem. At 1970s wage levels and 360 Yen to a US Dollar that wasn't a problem, but today's wages in Japan and a much stronger Yen make use of the rotary in a car cheaper than a base RX-8 a dodgy proposition.

Given that Bob spent 14 years in Mazda's employ and still has many contacts within the company, I tend to trust his statements regarding Mazda!

Regards,
Gordon

Originally posted by canzoomer
Perhaps, but it does not seem to have had much effect in the last 10 years.
In November 1995 the dollar/yen rate was 1-102
In November 2002 it sat at 1-102
Today it is at 1-109

More interesting is that in January it was at 1-120, but we have seen no price changes this year from the Japanese automakers.

If that were a truly important factor one would see that the price of the RX-8 would have changed, but it has not.


I'm not aware that car manufacturers normally change msrp month to month. I am sure that they are aware that exchange rates vary. Like I mentioned before, one of the reasons for the Japanese manufacturing plants in the US is to mitigate the exchange rate issue. As the RX-8 and the rotary engines are strictly built in Japan, they are affected by exchange rates more than say the Mazda6.

Originally posted by canzoomer
It is pretty well a given that when rates change out of their favour they will howl and complain.

But when it changes to their favour do they complain? Of course not!

These are businessmen, and they play it up and down, just as people do in the stock markets.

To (over)simplify things a bit, if it cost 2,000,000 yen to manufacture a car in Japan, an exchange rate of 1-110 (dollar/yen) would mean a manufacturers cost of about $18,182. If the exchange rate changed to 1-220, the manufacturers cost would be about $9,091. As companies are in the business of making money, the manufacturer would then lower the cost of their car to make it a better option than their competitors and sell more cars.

I'm sure you must be aware of this but I'm not sure why you don't think that exchange rates were a "truly important factor" in the price rise of the last RX-7.

Originally posted by canzoomer
As for the cost factor due to exchange rates, about the only variable that is affected is the cost of labour involved.

If we take that into account the change in cost and price should not be that significant. Remember, when the rates changed as drastically as they did the Japanese automakers had an inventory, which rose in value. This offset the cost increases for at least one year.

The variable that is affected would be the manufacturers entire cost for manufacturing the vehicle yes? If it cost 2,000,000 yen to manufacture a car in Japan, an exchange rate of 1-200 (dollar/yen) means that the manufacturer could sell the car for anything over 10,000 + export/certification costs and make money. An exchange rate of 1-100 would mean that the manufacturer would have to double the US price in order to just break even. This similar to what happened to the Japanese sports cars in the mid-90s. When the prices of the Z, Supra, RX-7 started getting close to the $40,000 mark, they were not quite as attractive as they used to be and they didn't sell.

Whatever the case, I'm not really here to discuss supply/demand and economics. I originally posted some info on the reported cost of the renesis and got sidetracked because I couldn't understand how anyone could think that all of the Japanese manufacturers would arbitrarily raise the prices of their cars in the mid-90s so that they could lose money.

Once the plant and equipment are in place the marginal cost of each engine is probably not that great. Because of fewer moving parts, etc., that should lower the price. But the fixed costs of the rotary are probably high because it's unique and takes unique equipment (plust they want to cover the fixed costs of the R&D they put into it). Mazda, with its monopoly power over the rotary is able to recoup those fixed costs of both machinery and R&D.

LOL i always seem to stir up the sh*t dont i?