A Car that May Reshape the Industry’s Future

July 1, 1972, 8:00 AM UTC
rotary engine from July 1972 issue of Fortune magazine
Osamu Murai/Fortune/Time Inc.

The Sunday salons hosted by a Hollywood pop-music composer named Les Baxter are notable, among other things, for the dazzling automobiles that bring the guests. Maseratis, Ferraris, a Rolls-Royce here, a Lotus there routinely line the narrow roadway in front of his mountaintop home. But the car that really captivated Baxter’s friends one Sunday last winter was his new $3,100 Japanese Mazda sedan. They were impressed not by its looks, which resemble those of a bread-and-butter Toyota or Datsun, but by its engine—the first proved, produced-in-volume Wankel rotary engine in the world. After fifteen years as a someday possibility about as likely as battery power or steam, the rotary engine had arrived, and it was not only natural but symbolic that it should upstage that elegant assemblage of the world’s great but suddenly conventional automobiles.

Unprepossessing though it may be, the Mazda heralds perhaps the most basic change in automobiles since their invention. For the rotary engine has emerged almost abruptly as the coming prime source of automotive power in the U.S., if not in the world. By 1980, according to some expert prognosticators, from 75 to 95 percent of the engines produced in the U.S. will be rotaries. This is a remarkable outlook for a technological infant that is competing with the venerable and highly developed reciprocating engine. But the rotary is in a position analogous to that of the jet aircraft engine in the late 1950’s, with advantages in performance and cost that make it all but irresistible. Light, compact, simple, and powerful, it is potentially more reliable and much cheaper to build than the conventional engine. It has 40 percent fewer parts, weighs anywhere from a third to half as much, and is half the size—thus offering car designers great opportunities for making more efficient over-all use of space and materials.

Of more immediate concern, it is the only engine known that can meet future federal emission standards without prohibitive cost or special gasolines. The builder of the Mazda, Toyo Kogyo Co. Ltd., shocked other manufacturers last spring when, almost matter-of-factly, it told the Environmental Protection Agency that preliminary testing indicated its rotary engines should be able to conform to the controversial standards set by Congress for 1975 models. In Detroit, where Mazda’s timetable still seems impossible to match, Robert J. Templin of the General Motors special-product-development group calls the rotary “the only path we know to simultaneously improve fuel economy, vehicle performance, and emissions.”

G.M. tools up

The most portentous news now comes, in fact, from General Motors, which has revealed much more in deed than in official word. G.M. has paid out $15 million of a $50-million licensing agreement with Curtiss-Wright, which holds U.S. rights to the rotary engine, and the German licensors, headed by the Volkswagen subsidiary Audi NSU, which owns world rights. G.M.’s unique licensing arrangement is a measure of how seriously it takes its rotary research. All other Wankel licensees have to share technical findings and pay royalties on all engines built in production; G.M., by putting up a lot of money in front, won the right to keep its findings to itself and forgo royalties.

G.M. has assembled a large, talented, and amply financed staff to design a production engine. Machine tools are in place for a prototype line; there is some expectation that G.M. will order production machinery before the end of this year, and several major machine-tool makers are ready with newly designed equipment. Indeed, says one Detroit toolmaker, “we don’t need any further new technology or expertise to build any part of the Wankel engine today.” Technical analysts and engineers who know most about G.M.’s production plans expect that it will offer 25,000 or more rotary engines as options in 1974 model Vegas, and if all goes well, anywhere from 200,000 to 500,000 in the 1976 model year—maybe in a Nova-sized vehicle with front-wheel drive.

G.M.’s work has provoked a flurry of activity elsewhere. Chrysler has not yet gone beyond investigative research. But Ford has launched “an accelerated program” to come up with a suitable design. American Motors is planning to buy its engines from G.M. when the time comes. Curtiss-Wright has done a great deal of research and development for automotive, marine, and aircraft use. NSU has sold more than 27,000 rotary-engine Ro 80 luxury sedans. Volkswagen, which acquired NSU in 1969, has announced no plans for a rotary-engine car further down the price scale, but VW President Rudolf Leiding has said that the company is spending $6 million a year to develop one. Citroën is building a rotary-engine car in conjunction with VW’s subsidiary Audi NSU, and Rolls-Royce is working on a rotary diesel design. Toyota and Nissan are both expected to be selling rotary cars before G.M. Practically every other major carmaker in the world has either taken out or is negotiating for a license.

The customers are ready

What’s most remarkable, though, is that while the biggest automobile company in the world is still at the design stage, the rotary engine has already passed its critical tests on the factory floor and in the marketplace. Toyo Kogyo has sold more than 250,000 rotary-powered Mazdas since 1967, 50,000 of them in the U.S. This year it is expanding its rotary-engine production from 13,000 a month to 20,000 a month, half of its total automobile production; it is ready to increase output further next year. In California, where the company has launched its strongest U.S. selling efforts, the car has been on the market a little over a year and has already shot to fourth place among imports, passing such well-established names as Opel, Colt, and Capri, the captive imports of G.M., Chrysler, and Ford. Nationally its sales are on a par with Volvo, despite the fact that Mazda is now sold in only twenty-one states while Volvo has been sold across the country since 1955. C.R. (Dick) Brown, general manager of Mazda Motors of America, expects to sell 60,000 cars this year, up from 21,000 last year; his target for 1973 is 120,000—and for 1975, 350,000. No imported car in history has taken off as rapidly as the Mazda, and its success has done as much to boost the rotary’s prospects as any of the scores of technological breakthroughs that made it practical.

Up from minicars

Mazda’s mastery of the rotary engine is the latest proof that the world will indeed beat a path to the door of the better mousetrap builder. Ironically, it is also proof that people who invent better mousetraps are not necessarily the ones who capitalize on them most effectively. Like the transistor, the rotary engine was commercialized successfully in Japan, far from the country of its origin. The company that turned the trick, Toyo Kogyo, is an unusually innovative one with a brilliant technical staff. Today it’s the third-largest Japanese auto maker (after Toyota and Nissan) with sales of $878 million. Its facilities, which sprawl over 500 acres in the southeast corner of Hiroshima, make up the largest auto-production complex in a single location within Japan, and it ships its cars abroad on its own specially designed vessels.

But in 1960, when Toyo Kogyo first began considering the rotary, it was relatively small. It specialized in trucks and minicars with tiny 360-cc engines, and also built machine tools. Its late president, a venturesome engineer named Tsuneji Matsuda, knew that the company would have to enter the standard-sized car market to keep up with the industry. The company was a leader in putting new technology into operation—it had just installed a computer-control system for all of its vehicle production, the first in Japan—and since it was looking forward to expanding, it could afford to consider new ideas even if they made existing tooling and facilities obsolete.

The president’s insight

When Toyo Kogyo first asked NSU for a license to build Wankel engines, its request was rebuffed. But during a subsequent visit to Hiroshima, West Germany’s Ambassador to Japan was given a full tour of the plant, and shortly afterward he sent word that NSU would be willing to talk. In October, Matsuda and five of his technical men went to Germany, rode in a Wankel-powered NSU Prinz, and saw the engine on the test stand. They were impressed. Matsuda “used to like new things, and he jumped into the rotary and concluded an agreement,” says Michio Shigemi, a company director (the post is equivalent to a corporate vice presidency). “It was the insight of the late president that if we continued making the same engine as other manufacturers, our growth would be limited.”

Toyo Kogyo realized that the engine would require a lot of development work, but still its engineers were dismayed by their first single-rotor prototype, built in late 1961; it burned enormous quantities of oil, spewed white smoke, vibrated terribly at low speeds, and broke down fairly quickly. After about a year of part-time research, which produced no notable progress, the company committed itself to a full-scale development effort—concentrating, moreover, on the more complicated and virtually untried two-rotor design that seemed most promising for automotive use. Toyo Kogyo’s rotary-engine development center, opened at the start of 1964, was the world’s most elaborate, with thirty test benches monitored by computers and television cameras and a central control room equipped to record around-the-clock running tests.

In the next three years Toyo Kogyo invested some $11 million and 90,000 hours in testing almost 500 different designs; it destroyed some 5,000 engines and amassed more than 200 patents as well as numerous proprietary production techniques. Sealing proved to be its biggest headache, as it has with other developers of the rotary. The apex seals at the tips of the rotors serve roughly the same purpose as piston rings in a reciprocating engine, but they are subject to, and create, different forces as the rotor sweeps around the epitrochoidal surface of the housing. (See the illustration on the opposite page.) In early engines, the seals quickly wore chatter marks—wave-shaped patterns—on the housing itself. These soon caused breakdown. Toyo Kogyo’s solution, after many experiments with different materials, was first to coat the inner surface of the aluminum rotor housing with steel—using a sophisticated technique of spraying on powdered metal at high temperatures—and then to chrome-plate it. And it devised an aluminum-impregnated carbon material for its apex seals, which today appear good for at least 60,000 miles of service.

There were numerous other major problems whose solutions evolved through trial and error and computer simulation. The unique nature of combustion patterns in the long, narrow, shifting chamber formed by the moving rotor made fuel intake, spark-plug location, and ignition timing highly critical factors. Rough idling and poor low-speed performance, for example, were cured only by a complete relocation of the intake port at a small sacrifice in peak horsepower. Even engine cooling presented novel problems that were solved only after exhaustive research.

A frumpy pioneer

As Toyo Kogyo gradually chipped away at design problems, it enjoyed one important advantage over other would-be builders of the rotary: as a machine-tool maker, it had the wherewithal to develop the special machinery and processes required. By the beginning of 1966 it had built a number of prototype engines, installed them in new cars especially designed to show off the rotary’s characteristics, and sent sixty of the cars out to its suppliers and dealers for testing. They put some 360,000 miles on the test models, and the results were everything the company had hoped for; the cars were smooth running, economical, and capable of exceptional acceleration. Most important, they were reliable. Named the Cosmo Sport, the test model went into production the following year. If it was frumpy looking by today’s standards, it was nonetheless the vehicle for the world’s first two-rotor automobile engine.

Toyo Kogyo did not enter the U.S. market until three years later. Despite its technical expertise, the company is conservatively managed and a cautious marketer, and its first sales effort in the U.S. was low-keyed and almost timorous. The company set up several distributorships in the Northwest, the Southeast, and Texas, but it spent little to promote the cars, which were frequently sold from the same showrooms as other makes.

The approach changed drastically when Dick Brown was made head of Mazda Motors of America late in 1970. A tough and determined strategist, Brown frequently tells people, “This is my only chance to build a company from the ground up, and I’m going to do it right.” Now thirty-nine, he had spent fourteen years as an executive in automobile marketing and distribution, mainly with Chrysler, where he was admired—and upon occasion resented—for his hard-driving abilities. He quickly perceived that the unique car demanded a unique marketing strategy to capitalize on its virtues, while reassuring buyers who might be wary of its newness.

Mazda’s limited sales program had, in fact, created a good deal of excitement, not only among consumers but among dealers. In his first few months, Brown received ten or more applications for every potential sales outlet. Most of the applicants had experience and money; quite a few were already running successful dealerships for U.S. cars or imports, and some were high-powered chain operators. Brown therefore was able to pick and choose, and build a solid foundation for sales and service.

Mazda Motors of America sets high capital requirements for its outlets—e.g., a dealer who plans on selling sixty cars or more a month must prove that he has operating capital of $150,000 to start with, and can expect to invest some $500,000 in his facilities. Many dealers go far beyond the minimum outlays. One dealer—Moran Cadillac of Torrance, California—spent a cool $1 million.

The company will not accept dual distributorships—i.e., two makes of car sold from the same showroom. It has to approve site locations and showroom layouts; it sets standards for parts inventories and service facilities, signs and decor, and even specifies that sales people must sell Mazdas exclusively. In turn, Mazda backs its dealers to the hilt. Besides large advertising outlays, it provides training courses not only for mechanics and service managers, but also for sales personnel. Its policy is to give full backing on warranty claims—in contrast to the haggling between factory and dealer that has done so much to turn off customers in recent years. Brown explains why his strategy was not only desirable but necessary: “The greatest restriction we faced was the doubt in the eyes of the public as to whether the rotary is a reliable vehicle. If we had come in with low capital structure and dualing, no one would have touched it.”

An adman’s dream

The results of Brown’s solid organizational work have been spectacular. Two hundred dealerships are open for business in the West and Southeast, and Brown has over 1,700 applications on file for the eighty or ninety franchises to be granted in the Midwest and East by the end of the year. Sales per dealer under the new organization average fifty cars a month in contrast with fewer than ten for the earlier distributorships; and Mazda ranks fifth among all imports in sales per outlet as calculated by Automotive News. More to the point, the dealer network has helped generate and maintain an unprecedented degree of consumer excitement. A survey taken among the first thousand private owners by the Los Angeles market-research firm of J. D. Power & Associates showed that 80 percent would buy another one—an unusually high percentage, says Power. Informal polls show the same pattern, and Mazda dealers who have been in the automobile business for years say they’ve never seen such enthusiastic owners. It may be worth noting that in southern California, at least, a fair number of buyers have also run out to buy Toyo Kogyo stock (which recently sold for about $1.50 on the Tokyo Stock Exchange).

Part of the interest in the car is the sheer novelty of it, of course. The automotive press has helped by pouring out copious praise. “The car is an advertising man’s dream,” says Lou Scott, chairman of the Los Angeles office of Foote, Cone & Belding, which handles Mazda. When Mazda went on sale in the Los Angeles area, for example, F.C.&B. ran a series of television spots and newspaper supplements. In the first three days some 86,000 people poured through twenty-seven showrooms.

The enthusiasm is durable, for reasons that are apparent to anyone who has driven the car. “If we can get them into the car,” Mazda salesmen say, “we’ve got them sold.” The inherent qualities of the rotary engine provide a tangibly superior driving experience that can make all but the most dashing of conventional cars seem dull. The RX-2, which accounts for most of the Mazdas now being sold, is startling in its power and smoothness. The engine climbs easily to the 7,000-r.p.m. red line without the least sensation of straining. The car accelerates smoothly from zero to sixty miles per hour in anywhere from eight and a half to ten and a half seconds and through the quarter-mile in seventeen seconds to a speed of about eighty—performance that outshines other small sedans, many sports cars, and quite a few big V-8-powered cars. Top speed is 110 or more. At highway passing speeds the car leaps ahead where others run out of breath. But the performance seems even stronger than it is because of the car’s uncanny freedom from noise and vibration. Only a few luxury cars offer comparable sensations; with windows rolled up, the loudest sounds at seventy-five miles per hour are wind noise and the whine of transmission gears.

The car does have its drawbacks. Drivers must learn to heed their tachometers, since the engine climbs so easily to high revolutions. Although the four-speed transmission is smooth, with gear ranges well suited to U.S. driving conditions, a stiff and “grabby” clutch exacerbates the problem of starting smoothly from a dead stop. Those who want automatic transmissions will have to wait until later this year. Owners have also complained that gas mileage, which averages between eighteen and twenty-three miles per gallon, is poor for a small car, and oil consumption averaging 1,400 miles a quart distresses some. The emission-control equipment sometimes makes the car backfire alarmingly during deceleration. Though the pops and bangs are not harmful, they can be annoying.

Most drivers, though, are inclined to forgive the car its minor faults. While the Mazda is not cheap, it is carefully built, and it brakes and handles well. It is, in fact, a small big car, and many of its buyers are people who might otherwise have been reluctant to abandon the amenities of a larger one. And the car’s service record is good. Apart from some early transmission defects, the most common maintenance problems seem to be small ones connected with the car’s sophisticated emission-control system—all U.S. rotary Mazdas carry the equipment required by California’s tough laws. The engine seals have evidently delivered all the reliability they promised.* As one dealer says, “You never used to ask a customer how his car was running, because you’d get a two-day dissertation. With the Mazda, I enjoy asking—complaints have been nil.”

Pushing tools into the river

For other carmakers, Mazda’s success with the rotary engine has added fuel to a fire that is burning brightly of its own accord. At one time the industry was inclined to resist new engine schemes because it felt nothing could justify retooling costs or the obsolescence of its expertise. But the rotary’s benefits and savings now promise to far outweigh the expenses of changing over. Dr. David Cole, thirty-four, an automotive engineer at the University of Michigan and the son of G.M.’s President Edward N. Cole, has studied the rotary and shares his father’s enthusiasm for it. “There is no doubt in my mind that this will have the greatest impact on the auto industry of [any innovation in] our time,” he says. “There is a point in savings where you can afford to obsolete tooling. You wouldn’t do it for 2 cents a unit, but for $200 you could write it off or push it into the river.”

The engine itself, because it has fewer parts and weighs less, will be cheaper to build than the conventional motor. The exact amount is still uncertain, but costs will be substantially less—probably between 25 and 35 percent less. The principal saving, for a U.S. manufacturer in particular, will be in labor costs; and these savings could be great indeed if the engine were produced on a fully automated line—inconceivable for the piston engine but quite possible for the simpler rotary. Some students of the rotary have also speculated about possible savings to be gained by using common parts for different sized engines—one rotor for a small car, two for an intermediate one, and three or four for a big one. Most engineers regard these benefits as elusive because the single-rotor design is a poor performer, and assembling more than two rotors on a common shaft is expensive. At present, the most practical way to achieve greater horsepower is simply to increase engine size. Since rotary technology is still new, though, the possibility of three- and four-rotor production engines cannot be disregarded.

But construction savings go beyond the engine itself. Weighing as little as it does, and occupying so much less space than the piston engine, it requires less of the car’s strength and space to accommodate it. “The key economic incentive is packaging,” says Cole. A car designed for the rotary engine could be one or two feet shorter and several hundred pounds lighter without any loss in interior space. Engineers and designers would have more room for such things as energy-absorbing bumpers, and more freedom in body design and interior layout. In fact, the rotary opens up a whole new array of possibilities for more efficient use of space and materials and better handling and performance. Front-wheel drive, for instance, affords superior handling, while doing away with the long drive shaft and with it the hump in the car’s interior. Front-wheel drive is now an expensive proposition for a large or medium-sized car because its complex mechanisms must carry a good deal of weight—much of which will be eliminated by a lighter rotary engine. The rotary is ideal for the sports car, that small but profitable package where a high power-to-weight ratio is a prime asset.

A dirty engine comes clean

If the rotary engine offered nothing else, it would compel the attention of carmakers for its pollution-control potential. The design is still young enough so that experts argue over its inherent emission characteristics, and engineers have only begun to explore the basic design changes that can make it cleaner. But Charles Jones, Curtiss-Wright’s head rotary engineer and an inventor of several patented rotary improvements, says that even at this early design stage the engine is cleaner without emission controls than were conventional engines of the early 1960’s. And there is no doubt that the rotary naturally produces fewer oxides of nitrogen, or NOx, the most difficult of the automotive pollutants to eliminate, than the reciprocating engine. NOx are produced by high combustion temperatures, and in the rotary’s long, narrow combustion chamber, peak temperatures are several hundred degrees lower than in the cylinders of a reciprocating engine, owing to the greater ratio of metal surface to volume.

Without pollution-control equipment, the Mazdas now being sold would be worse than conventional 1972 models with respect to hydrocarbons, another principal constituent of automotive pollution. (Rotary and reciprocating engines produce about the same amount of carbon monoxide, the third major pollutant.) But the rotary is much easier to clean up after. For one thing, it is more adaptable to the thermal reactor, a simple afterburner that mixes fresh air with the exhaust gases to ignite them. Thermal reactors work more efficiently on the rotary because its exhaust temperatures are higher—which is not the paradox it seems in light of lower peak combustion temperatures. There are only two exhaust ports and no valves, and consequently less metal to dissipate the heat of gases rushing from the engine. The difference is most pronounced during warm-up, where thirty seconds of poor performance can negate emission-control savings achieved during an hour of driving. Equally important, the rotary’s small size means there is plenty of room under the hood for a thermal reactor; most engineers despair of fitting them into conventional cars whose engine compartments are already crammed from wall to wall.

Spinning smoothly on 80 octane

The rotary engine is also better suited to the alternative method of dealing with exhaust gases: the catalytic converter, which uses agents such as platinum to transform pollutants into harmless compounds. The reciprocating engine, unlike the rotary, needs high-octane gasoline to perform efficiently. The accepted and economic way to raise octane is with tetraethyl lead, but the lead is itself a pollutant, and it also degrades the catalytic converter, eventually rendering its elements useless. In designing engines to burn low-lead, low-octane gas, manufacturers have been forced to lower compression ratios at the expense of economy and power. According to the Automobile Club of Southern California, cars that meet California’s exacting standards for 1972 models are down some 15 percent in gas mileage and are noticeably poorer in performance, in large part because of their lower compression ratios.

The only way out of the downward spiral would be high-octane, unleaded gas. The petroleum industry has estimated the cost of converting its refining facilities for that kind of product at anywhere from $4 billion to $7 billion; it would, in addition, be getting less gasoline from each barrel of oil, thus wasting petroleum resources. But the rotary engine runs perfectly well on gas with an octane rating of 80, which is well below the poorest gas available in the U.S. today. Rotary-grade fuel, in fact, could be produced lead-free at lower cost than any of today’s gasolines.

Finally, the rotary engine shows some promise of being adaptable to an ingenious intake system known as “stratified charge,” which introduces richer gas mixtures to some parts of the combustion chamber and leaner mixtures to others. Stratified charge can actually reduce pollution without cutting deeply into performance; it may even offer better mileage. It has been made to work on reciprocating engines, but at an exorbitant price and only with fuel injection. Work done by Curtiss-Wright suggests that lower-cost stratified charge is possible for the rotary, maybe even using carburetors instead of the more expensive fuel injection.

The development of the rotary engine is still unfolding. In an exhaustive book, The Wankel Engine, Jan P. Norbye, automotive editor of Popular Science magazine, concludes that “the rotary engine is still too young to be assessed in proper historical perspective.” It is about as highly developed now in terms of its potential as the reciprocating engine was in 1930. There is, in short, a lot of room for growth.

Much of it will come from General Motors, by virtue of that company’s size and resources. The full measure of its work in progress has to be deduced from leaks and sketchy public utterances. The company apparently feels that favorable official comment would only encourage the competition and perhaps prompt the government to urge a speedier timetable in the interest of pollution control.

Oddly enough, G.M. has turned much of the rotary-engine manufacturing development over to its Hydra-matic Division. Robert Brooks, a Chicago industrial-management consultant who has studied the rotary extensively, says the reason is that “the automatic transmission is more sophisticated than the engine in current cars.” And he adds: “It’s the old adage—if you want to build a new pump, don’t go to the old pump makers.” The prototype assembly line is already installed at Hydra-matic. Popular Science, in its 100th-anniversary issue last May, presented a full drawing of a rotary engine intended, it said, for the 1974 Vega; and it listed numerous material and design specifications. G.M. will not comment on the report, other than to say that it has no official source. But President Cole, in his rare talks to the trade press, has exuded confidence in the rotary, alluding to the prospects for front-wheel drive, 400,000-mile seals, and even three-rotor engines. “We understand the rotary-engine cycle,” he has said, in a tone of voice that implies that G.M.’s understanding goes well beyond the current body of public knowledge. Perhaps the most significant clue to progress is that G.M.’s money managers, including Vice Chairman Thomas A. Murphy, are as excited about the rotary as the engineers. “Murphy even has a model of it on his desk,” one insider says, “and that’s really something for a financial type.”

Great expectations in Hiroshima

But if G.M. dominates the stage, its role is, so to speak, that of an imposing backdrop for the play. Mazda still has the lead part and most of the good lines. Toyo Kogyo has a three-year headstart over G.M.’s earliest possible rotary car, and when G.M. does finally announce, says Brown, “it can only help us.” Toyo Kogyo’s engineers have the practical production experience, and they are not standing still with their own basic research. Their confidence in meeting 1975 emission standards suggests progress in basic design, as opposed to bolt-on control equipment.

The company’s profits are thin these days ($26 million on that $878 million in sales), and Director Shigemi does not expect any great increase for 1972. Rotary-engine development work entailed enormous costs—a total of $36 million for license fees, development, and testing. “The company has a great research and development section, but management is not very good at moneymaking” Shigemi says wryly. Costs will drop, of course, as volume increases, and the company is thinking about automating the production line. It recently introduced a new model series, the RX-3, with snappier styling and a somewhat smaller price tag, which includes a new rotary-powered station wagon as well. “In the long run when all the new facilities are completed and the rate of rotary-engine production increases, I feel our profits will be rapidly increasing,” Shigemi says. “We are anticipating the next few years with much pleasure.”

*Officially, the company rates the seals for at least 60,000 miles of wear. But the automotive magazine Road Test took a Mazda engine totally apart after 50,000 miles of driving and reported seal wear so low that it projected a life of 150,000 miles. To replace the three seals would cost a motorist about the price of a valve job for a V-8 engine—anywhere from $250 to $350, depending on local labor rates.

With additional research by Aimée Morner

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