Dr. Wankel's Engine
RX-7's are powered by the Wankel Rotary Engine. The remarkable design of this 1.3 liter engine allows it to produce significant horsepower (112hp+ per liter). It was the design of a person by the name of Dr. Felix Wankel. Dr. Wankel proposed his engine design to many automakers but many reluctantly choose to follow through with his ideas. In its early days of production, the engines were prone to leaks and others problems. Today, the Wankel Rotary engine has been researched and developed to obtain the utmost reliability and derivability. Mazda has done this through it workings with the RX-7. In the late 80's, Mazda added a turbo to one of their models and named it the TURBO II. Unfortunately, the TURBO II engine never saw its way onto a production convertible (not in the USA, anyways). Many people have taken on the project of transplanting a turbo into a convertible to make the "Ultimate Conversion."

Here are some more images of the rotary engine,

All About the Rotary Engine

Terminology

There are some terms specific to the rotary engine that may help you understand its operation, or that you may want to refer to when viewing the table below.

Rotor: A rotor is a somewhat triangular shaped engine component. It is roughly equivalent to the piston of a conventional engine, except that it has a total of three combustion surfaces (located between each apex) to the piston's one (the top or face of the piston).
Apex: Each rotor has three apexes, which are the points of the triangular shape of the rotor.
Eccentric Shaft: The rotors drive the eccentic shaft, which is the equivalent of the crankshaft in a piston engine.
Rotor Housing: A rotary engine consists of a sandwich with several layers. The rotor housing is one such layer that is the same width as, and contains a rotor. The inner shape of a rotor housing, which the rotor's apexes follow, is called a peritrochoid curve. These housings contain the exhaust ports*.
Side Housing: A side housing is another layer of a rotary engine sandwich that is much like the bread of a regular sandwich. Every rotary engine has exactly two of these as they are the layers that cap each end. These housings generally contain intake ports.
Intermediate Housing: The intermediate housing is found between two rotor housings. Because the rotary engines found in RX-7s have two rotors, they have only one intermediate housing. Intermediate housings also contain intake ports*.

* Note: There are some rotary engines, called 'peripheral port' engines, that have their intake ports in the rotor housings and none in the side/intermediate housings. Mazda has reportedly developed a rotary with all side ports, including the exhaust ports, for use in the RX-01.

How the Rotary Engine Works

Piston	Description	Rotary
	Intake An intake event occurs when there is a chamber with an expanding volume open to the intake system. On a piston engine, this is when the intake valve is open and the piston is moving down. Intake on a rotary takes place when the intake ports are uncovered by the rotor, at which time the chamber open to the port will be increasing in volume.
	Compression A closed chamber decreasing in volume describes the compression cycle. A piston engine is in compression when the valves are closed and the piston is moving upward. Compression is achieved on a rotary as a result of the rotor moving in its housing such that the volume of its closed chamber is decreased.
	Power/Expansion The power or expansion cycle begins as the compressed intake charge is ignited by a spark. The gas expands as it is heated by the burning fuel. An engine gets its power by harnessing this expanding gas. In a conventional engine, this force pushes the piston downward which works to turn the crankshaft. In a rotary engine, this force pushes rotor in a direction that expands chamber containing the burning gases and in the process rotates the eccentric shaft.
	Exhaust The exhaust cycle clears the contents of the chamber preparing it for another full cycle. This is achieved in a conventional engine by opening the exhaust valve as momentum carries the piston upward. In a rotary, the leading apex of the combusting chamber uncovers the exhaust port in the rotor housing through which the spent charge is exhausted.

Other Comparisons to Piston Engines

Displacement
Rotary engine displacements seem small when compared to piston engines of similar power. In fact, both displacements are measured the same way. Displacement is the sum total of positive combustion chamber volume increases for one complete revolution of the main shaft (crank or eccentric). In a piston engine, this means the total amount of space swept by its pistons. In a rotary, it is easiest to think about the difference between the maximum and minimum volumes for a single chamber multiplied by the number of rotors (where each rotor has 3 chambers). Remember that the rotor actually revolves at one third the speed of the eccentric shaft, which is the reason only one chamber's displacement is used in the calculation. The difference in power is due to the fact that the rotary uses its full displacement to produce power for each revolution of the eccentric shaft while only half the displacement of the piston engine is producing power for each revolution of the crankshaft. Other differences also play a role; rotaries do not have the losses of reciprocating motion and there is no valve train to power.
Combustion Frequency and Power Stroke Duration
When you consider the facts above, you will see that on a rotary, each rotor fires once per eccentric shaft revolution. In a piston engine, only half of the combustion chambers fire for a given revolution. This means that a 2-rotor engine fires as often as a 4-cylinder engine. However, the power stroke duration in a rotary is 50% longer, it being 3/4 of a main shaft revolution to the piston engine's 1/2. This makes a 2-rotor engine similar to a 6-cylinder.

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