DETROIT (AP) - The rotary engine, once hailed as the auto motor of the future, appears to have suffered another setback because of its fuel economy problems.

The Detroit News reported Wednesday that Japan's Nissan Motor Corp. is joining Ford Motor Co. in abandoning development of the rotary engine for its cars.

The News quoted the Tokyo Press Center as saying Nissan, which makes the Datsun, "reportedly has decided to give up its plan to start production of a rotary-engine vehicle scheduled for this autumn."

Ford shelved its rotary development program early this winter after two years of work because the engine's fuel economy was far below that of reciprocating engines. Ford would not say how much it spent on the project, but industry observers estimated the cost ran in excess of $10 million.

The center, which covers the Japanese automotive industry, said Nissan planned on building 3,000 rotary-powered cars a month, but is now scrapping its plans because of fuel economy problems.

Nissan's apparent withdrawal from rotary production leaves Toyo Kogyo, the Japanese firm which makes the rotary powered Mazda, and General Motors as the only major auto companies remaining in the rotary engine field.

Toyo Kogyo has been selling Mazdas in the United States since 1970. GM is planning to offer the engine as an option in its subcompacts early next year. The Press Center said Toyo Kogyo was "shocked" by Nissan's decision to abandon the rotary engine. Sales of Mazdas had doubled every year since its introduction here until this year, when the Environmental Protection Agency disclosed the engine uses 50 per cent more fuel than piston engines. Prior to the EPA mileage rating, the engine was hailed for matching the performance of piston engines while producing fewer exhaust pollutants. Now Mazda sales are running 40 per cent below last year as consumer fears about the energy crisis suddently made fuel economy a key criterion in car buying.

General Motors is spending $50 million in royalty payments and millions more for development of the engine. The auto giant originally planned to introduce the new power-plant in a sporty subcompact this fall, hut delayed the program to improve the engine's fuel economy. GM said last week it is incorporating new technology into the rotary system and is now confident the engine will obtain fuel economy equal to or better than a comparable piston engine of the same performance and size.

American Motors plans to purchase rotary engines from GM to put in its new sporty subcompact Pacer, which will be introduced early next year.