The finale of the 1976 season left a very bitter taste in Scuderia Ferrari's mouth. Niki Lauda opted to retire on the second lap of a very wet Japanese Grand Prix, and the title went to James Hunt with his McLaren. The Austrian's return in record time, after his terrible accident at the Nurburgring, was in vain.
Lauda was ready to start the new championship more determined than ever. However, the car of Walter Wolf Racing surprised everyone by winning on its debut in Argentina, with South African Jody Scheckter at the wheel. The other Prancing Horse driver, the Argentine Carlos Reutemann, won the second Grand Prix of the season, in Brazil. Lauda claimed his first victory in 1977 at the tragic South African Grand Prix, marred by the death of Tom Pryce. The Briton died on the spot, struck by the heavy fire extinguisher that an alert but over-eager marshal was carrying as he dashed across the track to extinguish a fire in Renzo Zorzi's Shadow. The car, pelting down the straight with Pryce, by then lifeless at the wheel, hit the Ligier driven by Laffite, who was braking going into the first turn. Fortunately, the French driver was unhurt. Lauda himself was affected by the frightening accident, just making it over the line with his engine off, after debris from Pryce's Shadow damaged one of the radiators causing the temperature of the Ferrari V12 engine to sky-rocket.
Mario Andretti drove the Lotus to victory at Long Beach, but Lauda was still in the points with three second places in four races. Then, in France, despite a modest fifth place, he took the championship lead, which he never subsequently relinquished. Fitted with all the latest features, the 312 T2 was almost perfect, and the determined Austrian didn't miss a trick. Car no. 11 won in Germany at Hockenheim, as if to exorcise the Nurburgring accident 12 months earlier, and then again in Holland, also taking three second places in Great Britain, Austria and Italy.
Lauda's podium at Monza helped Ferrari seal the Constructors' title with three races to go. The Italian public also celebrated a win for Lotus driver Mario Andretti, who had previously raced for the Prancing Horse and was still much loved. Now it was up to Lauda to seal the deal in the Drivers' championship. The mission was easy: just one point. On 2 October at Watkins Glen the rainy conditions made the track hazardous. However, Lauda took a cautious approach that paid off in the end. World champion Hunt won the race in a McLaren, but the Austrian's fourth place signalled the end of the British reign and the crown's return to Austria.
With the world title over, Lauda and Enzo Ferrari's differences became increasingly apparent. The Austrian used a victory that had been largely down to him, to ask for a substantial wage hike, which Ferrari refused. This disagreement ended in a split, which unfolded in the worst possible way over a race weekend. After arriving in Canada, Lauda did not even take part in the tests claiming that the car had zero chance of victory at Mosport Park. He then simply packed his bags and returned to Austria, laying down a resounding challenge to the Commendatore. Still flagging up his achievements in the 1977 season, Lauda said: "Let's see where I am in two years and where Ferrari is!" Enzo, in response, replaced the great champion with an unknown Canadian called Gilles Villeneuve, who had only one GP to his name.
Two years later, Scheckter won the driver's title for the Scuderia. Villeneuve, whose exploits excited the fans of the Prancing Horse like never before, was runner-up. Lauda, disappointed by the performance of his Brabham, decided instead to announce his first retirement from competition. Enzo Ferrari had thus won this challenge too.