Japan’s 1970s oil and currency shocks collide with tough U.S. emissions rules, and the result is a surprising JDM turning point. The episode contrasts Detroit’s scale-first approach with Japan’s long-term supplier culture and kaizen-style process. Honda’s CVCC strategy beats the catalytic-converter path, while Toyota refines efficiency through continuous improvement. It also traces how the crisis fueled small, reliable exports and how underground tuning, toge mountain runs, and early aftermarket shops (leading to HKS) helped shape the later performance scene.
This week, we're exploring how Japanese automakers fared during the gas crisis of the early 1970's. What led to them being in the right place at the right time? How did they expand across the globe so seamlessly? And what makes Honda's CVCC engine so revolutionary for the time? All of this and more on this week's episode.
"Picture this. It's late 1973 and Japan wakes to a new economic unease. Oil price shocks are rippling across the globe."
When oil gets more expensive, gas gets more expensive too. That makes people and car companies change what they buy and how they design cars.
An oil price shock is a sudden rise in crude oil prices that quickly increases the cost of fuel. In 1973, this kind of shock forced automakers and consumers to rethink how much they drive and what kinds of cars they can afford to operate.
"What emerges isn't some radical new idea, it's a realization. Smaller engines, cleaner combustion, lighter chassis, the very qualities Japan's automakers have been quietly refining for years..."
Smaller engines usually use less fuel. When gas prices spike, that matters a lot.
Smaller engines generally improve fuel economy because they burn less fuel per mile and can be tuned for efficiency rather than only peak power. During the 1970s oil crisis, this became a major selling point for automakers.
"Smaller engines, cleaner combustion, lighter chassis, the very qualities Japan's automakers have been quietly refining for years..."
If the car weighs less, it takes less energy to move it. That can improve both efficiency and how the car feels to drive.
A lighter chassis reduces the car’s overall mass, which improves efficiency and can make smaller engines feel more responsive. Weight reduction is a key engineering theme in many “golden era” Japanese performance cars.
"Last week we talked about the early days of racing on the Japanese mainland with the construction of the Suzuka circuit by Soichiro Honda and Takeo Fujisawa."
Suzuka is a well-known race track in Japan. The episode uses it to explain how Japan invested in racing to improve cars and talent.
The Suzuka circuit is a famous Japanese race track that became a cornerstone of motorsport in Japan. Its construction is used here as a marker of how Japan built racing infrastructure to develop and showcase automotive engineering.
"foreign imports faced 30 to 40 percent tariffs and large displacement engines faced an additional tax."
A tariff is a tax on imported products. If a foreign car costs more to import, local cars become relatively cheaper and more attractive to buyers.
Tariffs are taxes a country charges on imported goods. In this context, Japan’s tariffs made foreign cars more expensive to bring into the Japanese market, giving domestic automakers an advantage.
"But over in America, power rested on scale. Long production runs were optimized, and vehicles were planned in advance."
“Scale” means making a lot of cars. Big companies can often make each car cheaper when they produce in huge numbers.
“Power rested on scale” means larger manufacturers could produce more cars at lower average cost. The episode contrasts this with Japan’s smaller, resource-limited automakers and how that affected strategy.
"A platform approved in 1968 might not reach showrooms until the mid 70s. And once it did, its fundamental architecture was expected to last most of the decade."
A platform is the main “base” design a car is built on. Automakers reuse it so they can build different models without starting from scratch every time.
A platform is the shared underlying architecture (like chassis and major components) used across multiple models. The transcript notes that a platform approved in one year might take years to reach the market, and its core design could be expected to last for a long time.
"Remember, we talked about Kaizen a couple episodes ago, how everybody in the assembly line in the factory could go to their boss, make suggestions for improvements, and just make those little incremental changes that over time add up to a lot."
Kaizen means “small improvements, all the time.” Instead of waiting for big overhauls, people keep tweaking things little by little so the whole process gets better.
Kaizen is a Japanese approach to continuous improvement where small, incremental changes are made regularly. In manufacturing, it encourages workers across the line to suggest improvements that add up over time.
"[555.3s] unpredictably. As a side effect, the yen soared against the dollar. And just like that, Japanese exports, specifically Japanese cars, were a whole lot more expensive."
If the yen gets stronger compared to the dollar, US customers have to pay more for Japanese products. So the price of cars can rise even if nothing mechanical changes.
When the yen strengthens versus the dollar, Japanese exports become more expensive for US buyers. That exchange-rate shift directly impacts car pricing even if the cars themselves haven’t changed.
"For Honda, their urgency was doubled... But Soichiro Honda saw emissions controls as an engineering problem and not a regulatory one."
Honda is the focus here because the episode says they didn’t just try to meet emissions rules with a simple exhaust fix. They viewed it as something to solve through engineering.
Honda is central to the episode’s theme: the company’s approach to emissions was framed as more of an engineering challenge than a regulatory workaround. The transcript contrasts Honda’s thinking with the industry’s reliance on catalytic converters.
"The oil crisis had arrived on top of another deadline that was far less negotiable, the 1970 Clean Air Act. This US law set aggressive emission standards scheduled to take effect in 1975."
The Clean Air Act is a U.S. law meant to reduce air pollution. For car makers, it forced them to meet tougher pollution limits by a specific year.
The 1970 Clean Air Act is a landmark U.S. environmental law that set strict air-pollution rules. In this context, it created a hard regulatory deadline for automakers to meet emission standards by 1975.
"The American manufacturers had already made their decision, which was catalytic converters. A chemical fix bolted onto engines that would otherwise have stayed exactly the same."
A catalytic converter is a part in the exhaust that helps clean up the gases coming out of the engine. It’s like a filter that turns bad exhaust into less harmful exhaust.
Catalytic converters are exhaust devices that use chemical catalysts to convert harmful exhaust gases into less harmful ones. In the transcript, U.S. automakers relied on them as a “chemical fix” rather than redesigning combustion from the ground up.
Concept
engineering problem vs regulatory one
"But Soichiro Honda saw emissions controls as an engineering problem and not a regulatory one. To him, cleaning exhaust after combustion meant admitting that combustion had already failed."
The episode is saying Honda saw emissions as a technical challenge, not just a paperwork/rules challenge. In other words, they wanted to fix the cause, not just add a device to clean up the result.
This contrast describes two mindsets: treating emissions as something to meet through hardware compliance (regulatory) versus treating it as a technical challenge to solve at the root (engineering). The transcript frames Soichiro Honda’s view as rejecting the idea that a chemical filter is the real solution.
"Honda bet its future on an engineering gamble. A gamble called CVCC. Instead of treating exhaust after the fact, it rethought how fuel burned in the first place."
CVCC is a Honda engine trick for burning fuel more cleanly. It uses a small “starter” area inside the engine to help the main combustion happen in a cleaner way.
CVCC stands for Honda’s “Compound Vortex Controlled Combustion,” an engine design that improves how the air-fuel mixture burns. Instead of relying on after-treatment, it uses a pre-chamber to ignite a small, rich mixture that helps the main chamber burn more cleanly.
"I'm a big Civic guy now. I've got an EF hatch in 1988, 1988, that I've turned into a track car,"
A track car is a car that’s prepared mainly for driving on a race track. It usually gets setup changes so it handles better and stays reliable under harder driving.
A “track car” is a vehicle set up primarily for circuit driving, often with changes that improve grip, braking, cooling, and driver control compared to a street setup. The speaker says they turned their EF hatch into a track car, implying performance-focused modifications and usage.
"The gas crisis ended up being good to Toyota for many of the same reasons it was good for Honda. But instead of a new and miraculous technology, Toyota thrived through the difficult work of refinement, repetition, and process."
Toyota is a Japanese car company. Here, the speaker explains that Toyota got better during the gas crisis by improving how they build cars, not just by inventing one magic new thing.
Toyota is a Japanese automaker that became especially influential during the gas crisis by improving efficiency through process rather than a single new technology. The segment frames Toyota’s response as a repeatable system that other companies could learn from.
"Every person on the floor, from senior engineer to the newest hire, was responsible for finding waste and eliminating it. Not in big dramatic overhauls, but in small, relentless, daily improvements."
Eliminating waste means cutting out anything that doesn’t help the final product. In a factory, that could be extra parts sitting around or steps that don’t really add value.
In lean manufacturing, “waste” includes anything that doesn’t add value—like excess inventory, unnecessary steps, or inefficient procedures. The segment uses it to explain how Toyota’s culture targeted inefficiencies at every level.
"to its gearing and weight that quietly pushed fuel economy upward without sacrificing durability. The Corolla and Celica followed a similar logic, each proving in their own way that efficiency"
Gearing is basically the “gear ratios” that decide how fast the engine spins for a given road speed. Better gearing can help the engine run more efficiently and burn less fuel.
Gearing refers to how the transmission ratios are set to match engine speed to driving conditions. Changing gearing can improve fuel economy by keeping the engine in a more efficient RPM range more often.
"I mean, even now the 240Z still great looking car, tastefully lowered on some coilovers with some like 14 or 15 inch wheels with a nice meaty tire on there."
Coilovers are suspension parts that let you change how high or low the car sits. They can also help the car handle better by controlling how the wheels move.
Coilovers are adjustable suspension components that combine a coil spring and shock absorber into one unit. They’re commonly used to lower a car and tune ride/handling, which is why the host mentions them on the 240Z.
"While Nissan was reshaping expectations on the road, Toyo Kogyo, later known as Mazda,
[1678.2s] was doing something stranger and more desperate at the track."
Toyo Kogyo is the old name for Mazda. The episode is talking about how Mazda worked hard to make its unusual rotary engine work and then prove it on the track.
Toyo Kogyo is the original company name that later became Mazda. The episode credits Toyo Kogyo/Mazda with developing the rotary engine and racing it to prove the concept.
"that Toyo Kogyo had spent years and enormous resources cracking the rotary engine, a spinning
[1689.8s] triangle that replaced conventional pistons and promised high power from a tiny package."
A rotary engine is a different kind of engine than the normal piston type. It can spin very fast and keep spinning, which helps in racing, but it tends to use more fuel.
A rotary engine (Wankel) replaces the usual piston-and-cylinder layout with a rotor that spins in an eccentric housing. It can rev very freely and sustain high RPM, which is why it was attractive for endurance racing despite fuel-efficiency drawbacks.
"Cars like the R100 and RX2 were sent to run flat out for hours at circuits like Fuji Speedway,
[1738.1s] where piston engines were nursing heat soak and mechanical fatigue."
Fuji Speedway is a famous race track in Japan. The episode uses it to explain why long races can stress engines, and why the rotary’s endurance mattered there.
Fuji Speedway is a major Japanese racing circuit, referenced here as the venue where rotary cars could run flat out for hours. The track context matters because long stints expose weaknesses like heat buildup and mechanical wear in piston engines.
"The strategy accepted
[1744.1s] more frequent fuel stops in exchange for fewer failures and it worked."
Fuel stops are when the race car has to pull in to add more gas. The host says the rotary cars used more fuel, so they stopped more often, but they were less likely to break.
Fuel stops are the planned interruptions to refuel during a race. The segment explains that rotary cars accepted more frequent fuel stops (because they weren’t efficient) to gain reliability and fewer failures over long stints.
"it took the historic
[1759.4s] 1-2-3 finish at the Fuji Touring Car Grand Prix in May of 1972"
A 1-2-3 finish means three cars from the same group took the top three spots. The host is using it to show how strong the RX3 was.
A 1-2-3 finish means the same team/manufacturer placed first, second, and third in the race. The episode calls it “historic” to emphasize how dominant the RX3 was at Fuji.
"It looks like a Le Mans, like Pontiac Le Mans as we would call it over here. Again, another
[1808.4s] Overfender car for sure. All these 70s Japanese cars look great"
An overfender is extra bodywork that covers the wheel area. It’s often used to fit wider tires and it also gives cars that classic race-car look.
An overfender is a bodywork extension over the wheel arch, often used to fit wider tires or give a more aggressive racing look. The host calls the RX3 an “Overfender car,” tying the styling to the 1970s Japanese track culture and modification-friendly design.
"Suddenly, a black market for custom parts run by experts in the dark art of speed started to appear. In Osaka, rotary owners quietly passed around the name of a young mechanic..."
Back then, some performance parts weren’t easy to buy normally. So people found them through unofficial channels, often from shops and builders who knew how to make cars faster.
The episode describes a “black market” where enthusiasts sourced custom performance parts outside normal retail channels. In JDM culture, this often meant hard-to-find upgrades and specialized fabrication that weren’t widely available through dealerships.
"the very beginning of Japan's aftermarket performance industry. The problems these anonymous mechanics were solving, the heat management, fueling, forced induction were the same problems that companies like HKS would later build entire product lines around."
Forced induction means the engine gets “extra” air pushed into it. More air usually means more power, but it also requires the engine to be managed and cooled properly.
Forced induction is any method of increasing the amount of air entering an engine above atmospheric pressure—most commonly via turbochargers or superchargers. It’s central to making more power without simply enlarging the engine, but it raises demands on fueling, cooling, and engine strength.
"The problems these anonymous mechanics were solving, the heat management, fueling, forced induction were the same problems that companies like HKS would later build entire product lines around."
Fueling is how the engine gets the right amount of gas at the right time. With turbo setups, fueling has to be tuned carefully so the engine runs safely and makes power reliably.
Fueling refers to how much fuel is delivered and when—usually controlled by carburetion or, in modern setups, fuel injection and engine management. In turbo builds, fueling must be matched to boost and air flow to maintain safe combustion and avoid knock.
"Riders came back because the roads demanded precision. Power didn't matter much when momentum was everything. Cars naturally followed."
Momentum is the car’s “rolling speed” through a corner. If you keep the car moving smoothly, you can carry speed through the turn instead of losing it and having to catch up.
Momentum is the vehicle’s motion and how it carries through corners. On tight mountain roads, maintaining momentum by avoiding big slowdowns can be faster than repeatedly accelerating hard from near-stops.
"A KE-25 Corolla on narrow tires. A bluebird light enough in the rear to step sideways if you ask too much of it."
Narrow tires are slimmer than typical modern tires. They can make the car feel less stable when you push it hard, but they also can make it easier to control if you’re smooth.
Narrow tires have a smaller contact patch than wider tires, which changes how the car grips and how it responds to steering and throttle. On mountain roads, narrow tires can make the car feel more “alive” and less forgiving when pushed, encouraging smoother inputs.
"The problem for these early car customizers was that the police started using Bosozoku as a catch-all label. Suddenly anything involving teenagers, engines, and darkness got grouped together."
A catch-all label means one label gets used for lots of different situations. In this case, police treated any loud young driver like they were part of the same group.
A “catch-all label” is a broad term authorities use to lump many different behaviors or groups under one category. Here, police used Bosozoku as a catch-all for teenagers with loud engines, which led to enforcement that wasn’t always tied to the specific modification or behavior.
"A backyard fix that proved reliable through repeated night runs was genuinely useful information."
A “backyard fix” is a DIY solution someone figures out at home. The important part is that it wasn’t just a theory—it worked repeatedly during real driving.
A “backyard fix” is an improvised, DIY modification or solution developed outside a formal engineering setting. The key idea in the segment is that these fixes were proven reliable through repeated real-world driving (night runs), making them credible inputs for later factory work.
"The idea would get noted, tested and sometimes absorbed into the next model year."
“Next model year” means the changes could show up in the following production cars. The idea is that what worked on the street could influence what the factory builds next.
“Next model year” highlights the feedback loop between street experimentation and production changes. The segment suggests that factory teams would note what worked, test it, and then incorporate learnings into upcoming cars.
"I also want to give a big shout out to Demeter Designs for doing our visualizer that you might be seeing on your screen if you're watching this on YouTube."
Demeter Designs is the team behind the visuals/graphics you might see while watching the episode. It’s not a car part—it’s just the production company making the on-screen visuals.
Demeter Designs is credited as the company producing the episode’s visualizer shown on screen for YouTube viewers. While not an automotive performance component, it’s part of how the show presents technical or historical context visually.
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Picture this. It's late 1973 and Japan wakes to a new economic unease. Oil price shocks
are rippling across the globe. At first, the crisis still feels abstract, something unfolding
thousands of miles away in places most Japanese people have never thought much about. But
gas stations in Yokohama have lines forming before sunrise. Taxi drivers in Osaka are
grumbling that their daily allotment has been cut. On the Tome Expressway, cars crawl past
roadside signs warning of fuel conservation enforcement. Nothing explodes all at once,
but the distance between routine and disruption suddenly feels uncomfortably small.
Across the Pacific, the same tension is playing out in real time.
Grainy news clips frame it as a full blown crisis. Fist fights are breaking out at gas stations.
Executives pace the floors of their Detroit factories. A country built on big engines and
cheap fuel finds itself exposed and Japan is watching.
In boardrooms from Aichi to Hamamatsu, executives and engineers are gathering under fluorescent
lights to reassess everything. What emerges isn't some radical new idea, it's a realization.
Smaller engines, cleaner combustion, lighter chassis, the very qualities Japan's automakers
have been quietly refining for years, suddenly look like the future. What almost no one realizes
yet is that this crisis will reshape far more than fuel prices and morning commutes.
It will reorder the global auto industry and quietly crown a new automotive superpower.
A once in a century opportunity has just landed in Japan's lap. Spoiler alert, they don't waste it.
Welcome back to past gas season 2, the rise of Japan's auto industry. My name is Nolan Sykes,
your guide through this incredible story of perseverance, engineering and of course,
really cool cars. Last week we talked about the early days of racing on the Japanese mainland
with the construction of the Suzuka circuit by Soichiro Honda and Takeo Fujisawa. We talked about
homegrown brands like Nissan and Prince taking the fight to the European sports cars that showed up
to that first Japanese Grand Prix. The birth of the legendary Skyline name will definitely be
covering that more later on. But this week, an oil crisis looms over the entire auto industry
and the Japanese get a huge opportunity to make big inroads in previously untapped markets.
And yeah, like I said, they don't mess it up as we know. Alright, so with all that being said,
let's get right into it. It's episode 3.
By the late 1960s, Japan's automakers had momentum. Thanks to strict government regulation from
the Ministry of International Trade and Industry, our friends over at MIDI, you love MIDI by now,
foreign imports faced 30 to 40 percent tariffs and large displacement engines faced an additional
tax. Just to pause real quick, I did not know that they were taxed on engine size. So if you see a car
over there with a big American V8 or something like a large displacement, like a V12, something
with a lot of cylinders, you know those guys are loaded because it's got a pretty big displacement
and they're paying for it in taxes. Pretty interesting stuff. Anyway, these tariffs and
taxes weren't just nationalism at work. The country had narrow roads carved through pre-war cities
with dense residential areas and mountains slicing through its interior. And gasoline had always
been expensive on the island, oil crisis or not. So smaller cars just made more sense.
By the late 1960s, Japan's MIDI was no longer some abstract bureaucracy issuing
distant decrees. It was staffed by career officials who had lived through scarcity first hand.
Their worldview had been forged not in abundance, but in reconstruction.
They remembered the years when steel allocations were measured in kilograms,
not tons. And when a single disrupted supply line could halt an entire factory.
The central question inside MIDI was never how can our companies beat Detroit? It was
how do we make sure they never collapse? Japanese automakers were young, capital constrained,
meaning broke, and operating in a domestic market that could not absorb large volumes of automobiles.
But over in America, power rested on scale. Long production runs were optimized,
and vehicles were planned in advance. A platform approved in 1968 might not reach showrooms until
the mid 70s. And once it did, its fundamental architecture was expected to last most of the decade.
Inside those companies, power flowed outwards from the top executives.
In contrast to the Japanese business culture, American companies approached their partnerships
transactionally. Relationships with suppliers, wholesalers and dealers were fluid and often
fickle. If a partner became inconvenient, they replaced them. This system favored speed and
scale, but it also assumed leverage would always flow from the top down.
Japanese manufacturers behaved differently. To them, a parts supplier was more than a vendor.
These relationships were built to last decades and exist as an extension of the brand.
Parts makers were integrated into development from the beginning. They attended design reviews
and shared responsibility for failures. Because these relationships were built for the long run,
improvements naturally occurred over time. Knowledge wasn't lost when those contracts
expired. Remember, we talked about Kaizen a couple episodes ago, how everybody in the assembly line
in the factory could go to their boss, make suggestions for improvements, and just make
those little incremental changes that over time add up to a lot. And it makes sense that this would
also extend through the supplier networks that all these manufacturers are dealing with. Through
this, you're building a lot of rapport and forging relationships that can survive hardship,
which we're going to see right now. If you were GM or Ford, Japan looked like a fortress built
specifically to keep you out. American consumers accepted American business skepticism about
Japanese imports, which were marked as flimsy tin boxes ill-equipped for a Minnesota winner.
I also have to assume that a little bit of racism played into this perception as well.
If you know about World War II history, you know that the conflict over there was heavily steeped
in race. And it shouldn't be surprising that maybe those feelings still loomed even 20,
30 years after the end of World War II. I remember growing up in the 90s and the
gold made in China sticker was almost the same thing. We saw Chinese products the same way
that Americans in the 60s and 70s saw Japanese products like cheap, flimsy, just meant for the
trash can. And I think now, just like is going to happen in this episode, the perception around
Chinese products is slowly changing. It's changed a lot, I think, in the last 15 years, certainly.
Anyway, Japan was aware of this perception. They knew the lack of an international market
meant their automotive ecosystem could all crumble overnight. And then it almost did.
The strength of a nation's currency is based on the strength of that nation's economy.
And the American economy is by far the strongest in the world. Accordingly, I have directed the
Secretary of the Treasury to take the action necessary to defend the dollar against the
speculators. It was August 15, 1971. Without warning, Richard Nixon went on live television
and announced he was ending the convertibility of the US dollar into gold. The dollar's value
was suddenly determined by supply and demand in global markets, which caused it to fluctuate
unpredictably. As a side effect, the yen soared against the dollar. And just like that, Japanese
exports, specifically Japanese cars, were a whole lot more expensive. A Toyota Corolla that left a
Japanese port in 1970 might land in Los Angeles priced at roughly $1,800 or about 15 grand today.
Cheap enough to offset shipping costs, tariffs, and skepticism from American buyers.
But after the yen's rapid rise, that same car effectively arrived hundreds of dollars more
expensive without a single bolt being changed. In some cases, export prices jumped 20 to 30%
almost overnight. Automotive growth collapsed and was only getting worse.
In the fall of 1973, OAPEC, the Organization of Arab Petroleum Exporting Countries,
announced an embargo against the United States and several other nations supporting Israel
in the Yom Kippur War. Japanese industry, which imported almost all of its oil from the Middle
East, suddenly found itself in dire straits.
For nearly two decades, Japan's economy had grown at a breathtaking pace powered by manufacturing,
exports, and relentless industrial discipline. But now, growth projections were beginning to
collapse. Some analysts were quietly predicting negative GDP for the first time in the post-war
era. Yet amid the panic, there was also clarity. Japan had to pivot, and it had to do it with
the same discipline that made the rise possible. Meanwhile, Japan watched America react to the
oil crisis with frustration. Washington was looking for culprits, and Japanese companies
were an easy target. Politicians ran stories about unfair trade practices, unions testified
about lost jobs, executives lobbied Congress. From Tokyo, it looked like a country lashing out at the
wrong problem. But Japan couldn't afford to spend much time watching, because American consumers
who had never considered a foreign car were suddenly walking into Toyota and Datsun dealerships.
Not out of admiration, but out of necessity. Fuel was expensive and getting worse. And the
small, efficient cars Japan had been quietly building for years were suddenly exactly what
people needed. These companies worked to quickly take advantage of the new market window because
they knew it wouldn't stay open forever. For Honda, their urgency was doubled. The oil crisis
had arrived on top of another deadline that was far less negotiable, the 1970 Clean Air Act.
This US law set aggressive emission standards scheduled to take effect in 1975. It didn't
care about fuel shortages, trade disputes, or engineering philosophies. The law was simple.
Dramatically reduce hydrocarbons, carbon monoxide, and nitrogen oxides, or lose access to the world's
lucrative car market. The American manufacturers had already made their decision,
which was catalytic converters. A chemical fix bolted onto engines that would otherwise
have stayed exactly the same. Expensive, complex, and dependent on unleaded fuel infrastructure
that barely existed yet. But familiar. It let companies preserve displacement and internal
hierarchies. And most importantly, it didn't require anyone to rethink combustion itself.
Honda looked at that solution and saw an admission of failure. Say at the time, Honda was still a
relatively small player in the global car market, not just compared to GM or Ford, but compared to
its Japanese rivals as well. Toyota and Nissan already had a deep export infrastructure which
we touched on last week, broader model ranges, and closer alignment with the regulations shaping
the global industry. They were cautiously preparing for catalytic converters like everyone else.
But Soichiro Honda saw emissions controls as an engineering problem and not a regulatory one.
To him, cleaning exhaust after combustion meant admitting that combustion had already failed.
The idea of solving pollution with a chemical filter offended his instincts. If an engine burned
cleanly enough, the problem disappeared before it even started. And so Honda bet its future
on an engineering gamble. A gamble called CVCC.
Instead of treating exhaust after the fact, it rethought how fuel burned in the first place.
A small, rich mixture ignited in a pre-chamber, which then triggered a cleaner,
more controlled burn in the main combustion chamber.
On paper, it promised lower emissions without sacrificing efficiency.
But in practice, early prototypes misfired, heat management was unpredictable, and tolerances
were brutal. Rival engineers dismissed the idea outright. Stratified combustion had been tried
before and abandoned. Making it reliable, affordable, and most important, scalable,
while everyone else leaned in on catalytic converters, sounded like a fantasy.
Unlike Toyota, which could spread regulatory risk across multiple platforms and markets,
or Nissan, which had the financial buffer of scale and motorsport credibility abroad,
Honda had no such cushion. Its future in the United States was tied to a narrow lineup
and a single engineering bet. If CVCC failed certification, Honda wouldn't just face a delay
or a fine. It would be locked out of the world's most lucrative car market at exactly the moment
Honda needed to grow. Then came the test.
Honda submitted a CVCC engine to the EPA, and the little engine didn't just pass.
It cleared the 1975 standards with room to spare, with no catalytic converter,
no exotic fuel, just combustion rethought. The industry reaction was polite disbelief.
Executives congratulated Honda publicly while privately insisting it was a laboratory trick,
something that might work once, but never reliable across hundreds of thousands of cars.
But Honda knew better. When the civic CVCC reached US showrooms,
it wasn't framed as a compliance car, it was sold as proof. Proof that a small company,
betting everything on engineering instead of a bandaid, could beat the largest manufacturers
in the world at their own game. And in the middle of a fuel crisis, American buyers were in no mood
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The Ford Pinto, the Chevy Vega, and AMC Gremlin had each been rushed to market to counter the
first wave of imports, and each arrived compromised thanks to durability issues,
cost cutting, and old engineering assumptions. Civic, by contrast, didn't feel provisional.
It ran clean, it sipped fuel, and its engine didn't feel strangled. Dude, those Pintos, man. I did
24 hours of lemons in a Pinto one time, and surprisingly, pretty good car. Pretty fun.
Wouldn't drive it. Wouldn't daily drive it, that's for sure. I could see why people made fun of those
things, but pretty decent race car, honestly. Civic sales climbed steadily at precisely the
moment Detroit small cars were losing goodwill. They weren't being sold as novelty imports or
counterculture statements. They were sold as solutions. Reliable, clean, predictable, a car
you didn't have to think about. And in an era when thinking about fuel had become unavoidable, that
mattered. In the mid-1970s, Honda was no longer a fringe player in the American market. The Civic
had become one of the defining small cars in the oil crisis years. It complied with emissions
regulations that Detroit still resented. It consumed fuel at a rate that made rationing
survivable, and it did both without apology. In that way, the Civic was Honda's singular,
brilliant strike at the global automotive industry. However, its rivals at Toyota approached the fuel
crisis differently by making a thousand tiny cuts, each one deliberate.
I've had the chance to drive a CVCC, and it was a lot of fun. By today's standards, very slow car,
but I love the interior of those things. It's really cool. There's like a
color-matched, paint-matched element of the dash. The car I drove was yellow on the outside, and
then on the inside, part of the dash was the same color yellow. It just felt so cool. One of the
better 70s cars that I've driven, one of the more charming ones for sure. And I think I would like
to have one at some point. I think they've aged pretty well. They look good. And dude,
who doesn't love a Honda? Well, probably a lot of you listening, but well, maybe not. I don't know.
I'm a big Civic guy now. I've got an EF hatch in 1988, 1988, that I've turned into a track car,
and I've definitely become a believer in Hondas, which I think my 16-year-old self would
be pretty surprised by, because I did not like Hondas when I was that young.
The gas crisis ended up being good to Toyota for many of the same reasons it was good for Honda.
But instead of a new and miraculous technology, Toyota thrived through the difficult work of
refinement, repetition, and process. They hunted for every inefficiency baked into the global
automotive industry, and in a moment of crisis, their worldview suddenly became the blueprint.
Toyota's answer to the crisis wasn't a single breakthrough. It was a philosophy.
They called it Kaizen, which translates roughly to continuous improvement.
The idea was simple. Every person on the floor, from senior engineer to the newest hire, was
responsible for finding waste and eliminating it. Not in big dramatic overhauls, but in small,
relentless, daily improvements. A junior engineer could propose a change to a test
procedure, and it would be evaluated on its merits, not on who suggested it.
Good ideas moved fast. Bad ones got cut quickly. There was no room for ego, and there was no room
for excess. That last part is worth pausing on. Toyota didn't keep extra parts piling up on
the factory floor just in case. They ordered exactly what they needed, exactly when they needed it.
No buffer stock, no waste, no guessing. This approach, later known as
just-in-time manufacturing, meant that every component in the building had a job to do right
now. It sounds simple, but it was actually a complete reimagining of how a factory could work.
Why does this matter for a show about the golden age of Japanese sports cars? Well,
because the discipline and routines that Toyota built during this era didn't just stay inside
the walls of a Corolla factory. It became the operational DNA of the entire Japanese auto
industry. The precision, the speed of iteration, the culture of solving problems at every level
rather than waiting for someone at the top to notice them. All of that eventually flowed into
the engineering teams that would build some of the most celebrated performance cars in history.
In the meantime, the cars themselves were doing exactly what the moment required.
The Corolla became one of the most dependable cars of the decade through incremental updates
to its gearing and weight that quietly pushed fuel economy upward without sacrificing durability.
The Corolla and Celica followed a similar logic, each proving in their own way that efficiency
and enjoyment didn't have to cancel each other out. None of them were exciting per se, but that
was kind of the point. They were reliable and reliability built a customer base.
That trust also bled into the racing world. And the thing about racing is that it reflects
what's going on in the real world. In the 1970s, that meant scarcity. Japanese cars had never
dominated on sheer power. Their engines and their budgets were too small. But in a world that suddenly
couldn't rely on brute force, those same constraints became competitive advantages.
Some manufacturers bowed out of racing entirely during this period. But Japanese brands,
long accustomed to extracting maximum performance out of minimum displacement, were just getting
started. Nissan arrived at this moment with one of the most important Japanese cars ever made.
The Fairlady Z had been in development since the late 1960s, championed by Utaka Katayama,
the man who ran Nissan's American operations and understood better than almost anyone else
what the export market actually wanted. Katayama had watched American buyers respond to European
sports cars with enthusiasm. He believed Japan could build something just as compelling
at a fraction of the price. The design was handed to Yoshihiko Matsuo, whose long hood,
short deck proportions gave the Z an immediate visual authority that nothing coming out of Japan
had quite matched before. I mean, even now the 240Z still great looking car, tastefully lowered on
some coilovers with some like 14 or 15 inch wheels with a nice meaty tire on there. It's
good looking car folks. What made the Z significant wasn't just how it looked,
it was what it represented. Here was a Japanese sports car that didn't apologize for being Japanese.
It was fast enough, light enough, and affordable enough to compete directly with European alternatives.
In America, it did great. Back in Japan, it changed the conversation about what a
domestic automaker could aspire to build. The Z told a generation of engineers and enthusiasts
that a Japanese sports car could be a serious, desirable product. Not a clever economy car
with sporty trim, but the real thing. That idea would take a few years to fully bloom,
but the Z planted the seed.
While Nissan was reshaping expectations on the road, Toyo Kogyo, later known as Mazda,
was doing something stranger and more desperate at the track. You might remember from last episode
that Toyo Kogyo had spent years and enormous resources cracking the rotary engine, a spinning
triangle that replaced conventional pistons and promised high power from a tiny package.
Well, they finally made it work and now they had to justify it at maybe the worst possible time.
The rotary engine was not efficient. Everybody knew that. It burned fuel at a rate that made
accountants very nervous. But it had one trait, no conventional piston engine of the Erica Match.
It could sustain high RPM almost indefinitely and that made it great for endurance racing.
Cars like the R100 and RX2 were sent to run flat out for hours at circuits like Fuji Speedway,
where piston engines were nursing heat soak and mechanical fatigue. The strategy accepted
more frequent fuel stops in exchange for fewer failures and it worked. Domestically, the RX3
Savannah redefined the formula further. Lightweight, high revving and hard to kill, it took the historic
1-2-3 finish at the Fuji Touring Car Grand Prix in May of 1972 and went on to take the Fuji Grand
Champion Touring Car title in 1972, 73 and 1975. Toyo Kogyo had found a way to make their
liability into an asset. In an era defined by gas worries, the rotary's greatest virtue was an
efficiency. It was that it never stopped. RX3 is a car that I would love to turn into a drag car
at some point. I love these RX3s, they're so cool. It's like someone took a shrink
ray to a muscle car. The front styling, I would say, is almost Pontiac-esque with the headlights.
It looks like a Le Mans, like Pontiac Le Mans as we would call it over here. Again, another
Overfender car for sure. All these 70s Japanese cars look great and that's because they were
all at the racetrack so you can do any sort of racing modification you want to it visually and
it's gonna work because that's what these things were designed to do as we just talked about. Isn't
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While Japanese automakers were working to comply with legislation and improve efficiency in
brightly lit research centers, another form of innovation was taking shape in darker locales.
Alleyways, behind machine shops, garages, near industrial seaports, two car spaces tucked below
residential balconies. These places didn't look like the birthplace of anything significant,
but they were. It all started with young enthusiasts who had a little spending money and a shared
belief that a car's potential shouldn't end at the factory. Suddenly, a black market for
custom parts run by experts in the dark art of speed started to appear. In Osaka, rotary owners
quietly passed around the name of a young mechanic who still lived at home, but seemed to understand
the engine better than Toyokoya themselves. Nobody knew much about him, but if your R100 stopped
running hot after a night at his corrugated metal door, the whispers followed you home.
Around Yokohama, owners of the Fair Lady Z were circulating a different name. The Z ran on Nissan's
L-Series in Line 6, a strong and tunable engine that Nissan had deliberately dialed back to meet
emissions requirements. A tuner in Yokohama knew how to dial it up again, and he could do it without
killing your fuel economy. No small thing during an oil crisis. His workshop was a borrowed space
behind a repair shop. No sign on the door, no business cards, just results and word of mouth.
In other areas, motorcycle tuning expertise simply merged into car culture. Mechanics who had spent
years optimizing power from high-revving Hondas started tinkering with miniature turbo kits that
were never designed for passenger cars. These names traveled like underground code. A good solution
didn't stay local. It bounced from prefecture to prefecture through street meets, track days,
and rumors, arriving slightly distorted, slightly mythologized, but pointed in the right direction.
What was happening in these garages and back alleys was, in hindsight,
the very beginning of Japan's aftermarket performance industry.
The problems these anonymous mechanics were solving, the heat management, fueling, forced
induction were the same problems that companies like HKS would later build entire product lines
around. HKS, which would go on to become one of the most respected performance parts manufacturers
in the world, was founded in 1973, right in the middle of all this. Their knowledge didn't come
from boardrooms. It came from back alley workshops and borrowed tools, passed hand to hand until
someone figured out how to turn it into a business. If you're listening to this show,
you probably know HKS, but if you don't, like, you know, their cars have been featured in Gran
Turismo. They've been on the covers of countless, countless magazines. They're awesome black and
like, I don't know how to describe their, their like paint scheme they use. It's like a bus seat
almost, like black turquoise, fuchsia. We would consider it very, very 90s, but it just works.
If the garages and alleys were the classroom for Japan's young inventors,
the expressways were the exam hall. By day, they were jammed with delivery trucks, taxis and salarymen.
But once the business is closed and street lights flickered on,
most expressways were deserted. The streets were long and gently curved between overpasses.
The pavement was mirror smooth. The guardrails glinted like cut glass. Everyone who made their
way out there late at night was up to no good in the best way possible, and their cars were
perfect accomplices. The police cars struggled to keep up. They weren't built for chases on
elevated loops, and the young drivers knew it. Police scanners from the time were full of reports
like these. The expressways taught lessons no garage could. How aerodynamics mattered,
even at modest speeds. How tire heat changed grip. Drivers had to learn by doing. The runs were
short, maybe two or three interchanges, just long enough to feel the blur of the city around you.
Just enough to catch a glimpse of what your car might do if it weren't being held back by the
demands of everyday life. These quiet anonymous sprints were the first outlines of a culture
that would one day rewrite Japan's automotive identity. But for now, there's just a handful
of kids on the open road learning from their favorite teacher, speed.
Unlike city roads, the mountains were never meant to host cars. The Japanese call their
mountain roads togays. These narrow winding paths exist for work. Logging trucks crawling up hill
under load. Mail carriers tracing long, rural routes. K-Vans ferrying supplies between small
towns. The pavement is narrow and imperfect. Guard rails are inconsistent to say the least.
Sightlines vanish without warning. A mistake on these roads doesn't earn you a ticket.
It ends your night. Or worse. And that was exactly why racers loved them.
Long before cars became central to the underground scene, motorcycle riders had already
claimed the mountains. Small displacement bikes were ridden uphill against gravity and thinning
air not for spectacle but for proof. These runs started as product testing, a way to
stress engines and frames before they reached customers. But by the late 1960s, the testing
had turned personal. Riders came back because the roads demanded precision. Power didn't matter
much when momentum was everything. Cars naturally followed.
A KE-25 Corolla on narrow tires. A bluebird light enough in the rear to step sideways if you ask
too much of it. These were machines that punished aggression. You couldn't force a line through a
corner. You had to negotiate with it. Your speed came from restraint.
Every run taught something new. How suspension geometry revealed itself mid-corner. How throttle
input changed balance more than steering angle ever could. The mountains didn't reward bravery.
They rewarded understanding. Years later, people would give this learning a name. They would call it
drifting. There were no meetings, no banners, no terminology, just people, cars, and roads that
refuse to forgive laziness. Ask older mechanics in Yokohama or Nagoya about those nights and
you'll get two kinds of answers. Either a quiet smile and a claim that it was the best time to be
alive or a shrug that insists nothing special was happening at all. Both are true. It was a network
informal and unspoken built around individuals and their machines. To an outsider, it might have
looked reckless or absurd, but to anyone paying attention, it made perfect sense.
Sociologists reflecting on the 1970s youth culture have noted that after the political
disillusionment of the late 60s, many young people reacted by turning away from mass movements and
towards personal outlets. Something immediate, tangible, and there's alone.
In 1960, millions of Japanese student activists, union leaders, and ordinary citizens had flooded
the streets to protest the renewal of the U.S.-Japan Security Treaty known as ANPO.
To its opponents, this treaty represented everything left unresolved in Japan's
post-war history, foreign troops on Japanese soil, compromised national sovereignty,
and a government more loyal to Washington than to its own people.
These protests became one of the largest demonstrations in modern Japanese history.
For a brief moment, there was genuine hope that public opinion might change the outcome. Then,
it didn't. The message that stuck was simple. The state had other plans, so the energy and
anger moved somewhere else. By the early 1970s, this same generation was looking for something
immediate, something where you put in the work and could see the result with your own hands.
Cars fit perfectly. They were physical, they were technical, and they were cheap enough that
ordinary people could actually own one. Politics had let this generation down.
The garage offered something the protest sign never could. Direct control. You fix the problem,
the car runs better. No committees, no waiting, no disappointment.
Parents didn't get it. Teachers didn't either. But the kids gathering and parking lots after
midnight weren't really causing trouble. They were finding a space that was theirs,
and a country that put enormous pressure on people to conform,
fall in line and fit them old. A wrench in your hand at two in the morning was a small act of freedom.
But the same freedom looked like a threat from the outside. The Japan in the 1970s had a very
specific idea of what a well-functioning society looked like. New roads, rising wages, clean streets,
and obedient citizens. These late night parking lot gatherings didn't fit any
recognized category. Too loosely organized to be a club, too purposeless looking to be a hobby,
too late at night to be innocent. Most of the time the kids were swapping ideas,
drinking canned coffee, and arguing about carburetors until a patrol car rolled by just a little too slowly.
That dynamic shifted when police started grouping all young people with revving engines under a
single label, Boso, or reckless, out of control, a menace to society. In reality, Bosozoku were
biker gangs. Loud, visible, and deliberately provocative. They wrote in formations, modified
their exhaust to be as disruptive as possible, and dressed apart. They weren't subtle,
and by the early 1970s they were showing up regularly on the late night news, that imagery stuck.
The problem for these early car customizers was that the police started using Bosozoku
as a catch-all label. Suddenly anything involving teenagers, engines, and darkness got grouped
together. If you were young and your engine was loud, to the authorities you were a problem.
Tickets were written for modified exhausts regardless of whether the exhaust was actually
modified. Raids happened, IDs were demanded, everyone was told to go home.
But the pressure didn't kill the scene, it pushed it further underground,
later into the night, deeper into the mountains, further from anywhere a patrol car might think
to look. And somewhere in that process, something shifted. But it started as a hobby,
started to feel like something worth protecting. And once an identity becomes something that has
to be defended, it only gets stronger. This really echoes what was going on in the US at the time
just in a different way. You had a lot of people being disillusioned with the federal government,
with the failure. And just like the entire quagmire that was the Vietnam conflict,
them the US finally pulling out in 1973-74 from that conflict. A lot of people just didn't have
a lot of faith in the institutions that for many decades, at least especially following World War
II, had been built up to be these almost infallible structures. But you just see that throughout the
world at this point. Especially in the 70s, man, we're just such a chaotic time, a lot of
change and upheaval and reordering, both good and bad. It's just cool that the figures and companies
that we live so much in the car space were also being born from this time as well. I don't think
we really realized that enough. And it was all just a bunch of kids racing their little civics around,
you know, pretty cool. Engineers at Toyota, Nissan and other OEMs were starting to take notice of what
was happening in the garages and back alleys. And quietly, they didn't mind. A backyard fix that proved
reliable through repeated night runs was genuinely useful information. Someone at a factory would
hear about a heat management trick that was working on rotary powered street cars or a
carburetor tweak that was making Z owners happy. The idea would get noted, tested and sometimes
absorbed into the next model year. The line of what was being built in factories and was being
figured out in parking lots was thinner than anyone wanted to admit. By the end of the 70s,
the scene had shifted in a different way too. The police pressure that had defined the early
years was still there, but it had lost some of its bite. Part of that was simply numbers.
Car culture had grown too big and too spread out to crack down on effectively. The mountain runs,
the parking lot meets, the toge pull offs. These weren't just fringe anymore. They were part of
how young Japanese people spent their time. It's hard to treat something as a public menace when
it's everywhere. Stories spread faster than the cars that inspired them. Someone in Shizuoka would
hear about a Sylvia and Kanagawa running impossibly clean carb tuning and a week later,
some other kid would be trying to replicate it without ever having seen the original car.
It wasn't fame yet, but it was attention and attention creates gravity.
The people keeping this culture alive weren't trying to build anything lasting. Most nights,
they weren't even thinking beyond their next run. They were trying to stretch a tank of gas a little
farther, keep an engine cool a little longer, find a setup that didn't punish them for pushing too
hard. In a decade defined by fuel shortages and rising costs, survival came first. Speed was just
byproduct of learning how to conserve momentum. Nobody believed they were laying the groundwork
for magazines, tuning houses, videotapes, or careers. They were just solving the problems
in front of them. And that's the thing about moments like this. You don't recognize them
when they're happening. Golden eras don't begin when someone says so. They begin because a few
people keep building and testing and moving forward. And eventually, the whole world follows.
That's where we're headed on the next episode of Past Gas. Wow, dude, what a great episode.
Usually when we talk about the gas crisis, it's from an American perspective, duh.
And it's very negative. It had a very bad effect on the US, but here we're seeing it in a very
different light. And that's what we want to do here is find those perspectives that change your
perspective a little bit. I know mine has been changed. Wow. Anyway, guys, thank you so much
for listening to this episode. This has been so great. I'm just so every time we finish one of
these episodes, I'm just really happy with what we're doing here. And let us know if you're happy
as well down in the comments, like and subscribe on YouTube or the podcast platform of your choice.
You can follow me at Nolan Jay Sykes if you'd like and see what my face looks like if you want.
I want to give a big shout out to our writers on this episode, Anthony Hardin, Greg Nix,
Audrey Holden in there, Joe Weber sitting beside me. We're going to get him a mic next time just
so we can chime in every now and then. And of course, our editor, Mark Schroeder. I also want
to give a big shout out to Demeter Designs for doing our visualizer that you might be seeing
on your screen if you're watching this on YouTube. I say this a lot. I don't want to get too schmaltzy
every episode. I love doing podcasts and I love this podcast. And we are only a
corner of the way through this series now at this point. We got so much more coming for you.
And thank you so much. We'll see you next week.
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