Mazda Shopping for Ad Agency for Upscale Line : Automotive: Officially, the program doesn’t even exist. But the new luxury models, code named Pegasus, is expected to be announced soon as a challenger to Lexus and Infiniti.

Mazda Motors of America has begun shopping for an advertising agency to handle marketing chores for a new upscale car line to go up against Toyota’s Lexus and Nissan’s Infiniti, industry sources said Tuesday.

Officially, the new car line--being planned at Mazda’s Irvine headquarters under the code name of the Pegasus Group--is only a feasibility study.

But one source said Mazda is expected to announce a final decision on the U.S. launch of Pegasus next year, possibly as early as the Chicago Auto Show in February.

Mazda officials could not be reached Tuesday for comment.

But sources that have been briefed by Mazda said the U.S. importer interviewed five advertising agencies in Irvine last week, including Foote, Cone & Belding/Santa Ana--the agency that handles the rest of Mazda’s domestic advertising.

And Adweek magazine, a trade journal, has reported that at least three other agencies, two in New York and one in Dallas, are in the running. Adweek estimates that the Pegasus account could be worth up to $75 million a year.

The Pegasus team reportedly is discussing a three-car line, to be sold in separate showrooms, that would include a full-size V-12 sedan, a V-8 coupe about the size of the current Mazda 929 and a V-6 sedan based on the Mazda 626.

In an interview earlier this year, Clark Vitulli, senior vice president of Mazda Motors of America, said the company is intent on upgrading its image in the United States.

“The intent is to build world-class, unique, specialty products. Not cars that will be liked by everyone, but cars that will be loved by certain people,” Vitulli said. The former Chrysler Corp. executive had been in charge of marketing Chrysler’s luxury line before joining Mazda in November, 1988.

“There is no question but that Mazda has the products under development” in Japan, said David Hillburn, president of Hillburn & Associates, a Los Angeles automotive market planning firm. “So if and when Mazda decides to enter the luxury market, they are well-positioned to succeed.”

While the Pegasus line would be Mazda’s first new car line in the United States, the Japanese auto maker has maintained a separate upscale brand--called Eunos--in Japan for several years.

One source said Mazda Motors of America already has selected territories for Pegasus dealerships and that dealers will be required to build separate showrooms but will be allowed to use existing service facilities.