Mazda Increases Stake in Irvine-Based Marketing Arm

Mazda Motor Corp. said Thursday it has boosted its stake in Mazda Motor of America Inc. to 88% from 50% in a bid to strengthen the financial structure of the car maker’s U.S. marketing subsidiary.

The Japanese car maker, 33% owned by Ford Motor Co., said it is investing $126 million in the subsidiary by acquiring 5.63 million new shares.

“Mazda’s capital investment in [the subsidiary] is intended to strengthen the company’s financial structure and provide a base from which to [develop] the business in 1997 and beyond,” the auto maker said.

Although Mazda didn’t disclose the earnings of the U.S. sales unit or the size of its accumulated loss, the “earnings haven’t been very impressive” because of a continued slide in sales, a company spokesman said.

Hit hard by the weak dollar trend of recent years and a lack of popular models, Mazda’s auto sales in the U.S. market shrank for the second consecutive year. Between January and November, sales shrank 16% to 265,825 units.

Irvine-based Mazda Motor of America is the importer and wholesaler of Mazda vehicles and repair parts in the U.S. Its other shareholders include Sumitomo Corp. and Itochu Corp. of Japan, whose stakes fell to 4.6% and 5.1% respectively as a result of Mazda’s capital injection.