TOKYO, Feb 10 (Reuters) - Japan's Mazda Motor Corp <7261.T> plans to launch an upmarket sport utility vehicle (SUV) for the North American market in 2006, hoping to improve its profit margins there, a newspaper reported on Tuesday. If true, it will be the first Mazda model to be designed specifically for the North American market. Mazda's strength lies in small cars and it has struggled in North America where larger cars are more popular. The Nihon Keizai newspaper said Mazda, which is one-third owned by Ford Motor Co (nyse: F - news - people), would aim for annual sales of 50,000 units. The SUV would be based on Mazda's Atenza compact, use a 3,000cc to 3,500cc engine made by Ford and be priced between $30,000 to $40,000, the paper said.