(Adds company comment, launch of new model, stock price)
TOKYO, June 28 (Reuters) - Mazda Motor Corp , Japan's fifth-largest automaker, said on Monday it was considering raising production of engines to meet strong demand at home and abroad for its sports cars.
Mazda President and Chief Executive Officer Hisakazu Imaki said the company could not keep up with strong demand for cars such as its Atenza and Axela sports models, which use the MZR engine.
"It's a fact we need to produce more MZR engines," he told reporters at the launch of a new car model on Monday. He declined to give details on its production increase plans.
The Nihon Keizai newspaper, citing company sources, said on Monday that Mazda planned to invest five billion yen ($46.64 million) to boost production of the engines at its main Hiroshima plant by 30 percent.
Mazda, one-third owned by Ford Motor Co , would raise production of the 1.8 to 2.3 litre engines used in the Atenza and Axela to 540,000 from the present 425,000 units a year, starting this autumn, the business daily said.
The MZR engine was jointly developed with Ford.
The news boosted Mazda shares by as much as 6.01 percent in early trade. The shares closed up 4.92 percent at 384 yen, while the benchmark Nikkei average inched up 0.88 percent.
Mazda, whose profit jumped 40 percent to 70.17 billion yen for the year ended March 31, released the Atenza in 2002. The model has been successful in Europe and China, while the Axela, which came out last year, has gained market share in Japan, the U.S. and Europe.
After spending much of the last decade in the red, Mazda has repaired its earnings by focusing on unique value-added cars such as the Atenza and Axela.
The formula has turned Mazda into the fastest-growing brand in the tough Western European market.
Mazda on Monday launched the latest in its series of sports car models, the Verisa, which also uses the MZR engine.
The new car, which will compete in the upper end of the domestic compact car market, will be sold at a price of 1.49 million yen.
Mazda plans to sell 2,500 Verisas a month.
Imaki said the company aimed to sell over 300,000 Mazda vehicles a year in China by 2010, up from the 80,000 in 2003. ($1=107.20 Yen)