Mazda CEO is stepping down amid deepening Toyota ties

Mazda Motor Corp. named Akira Marumoto its next chief executive officer to lead a revival in earnings growth in the face of a slowing U.S. market and stiff competition in China.

Marumoto, an executive vice president who heads operations in the U.S., will replace Masamichi Kogai after the change is ratified at an annual shareholder meeting on June 26, Mazda said Friday. Kogai will become chairman following a five-year tenure in which he orchestrated deeper ties with Toyota Motor Corp. Both of Kogai’s most recent predecessors as CEO also served five-year terms.

The leadership changeover comes amid a paradigm shift in the auto industry toward self-driving, connected, and electric cars, and the rise of China’s importance as the U.S. auto market shrinks. Mazda is among Japan’s most export-dependent automakers, with less than a fifth of revenue generated at home.

Marumoto will oversee a target to raise annual sales to 2 million vehicles by 2024, from about 1.6 million now. China overtook the U.S. as Mazda’s biggest market last year. Operating profit has dropped by more than a third from a record in fiscal 2016, when the American market hit its peak.

Shares of Mazda advanced 1 percent to 1,463 yen at 1:57 p.m. in Tokyo, giving the company a market value of about 925 billion yen ($8.5 billion).

The stock has declined about a fifth during Kogai’s tenure as the company struggled against intensifying competition and the accelerating pace of technological change. At 143 billion yen, Mazda’s research budget for the current fiscal year is about an eighth of Toyota’s 1.08 trillion yen outlay.