Nissan is to produce a new hatchback at its Sunderland plant, a move that could crete over 1,000 jobs, the firm said.
The company will invest £127m in the project, which is being topped up by £8.2m from the government's regional growth fund.
MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
The news follows Nissan's announcement in March that it would build its new compact 'Invitation' model at the site from 2013, potentially creating 2,000 jobs.
"In Europe Nissan has achieved record growth in recent years by providing innovative, customer-focused models like Qashqai and Juke that are designed, developed and produced within the region," said Nissan Chief Operating Officer Toshiyuki Shiga.
"Nissan already produces more vehicles in Europe than any other Asian manufacturer and the model announced today will bring world-class quality and leading technology to our customers at the heart of the European C-segment."
Councillor Paul Watson, leader of Sunderland City Council, called today's announcement "a proud testament to the skills and dedication of the Sunderland workforce".
-
Could your family be at risk of an unexpected tax bill? How to keep your loved ones in the loopMany families are out of the loop when it comes to planning the financial aspects of both retirement and inheritance
-
Rightmove: Glut of homes for sale in southern England drives asking price dropAsking prices are 0.1% lower than a year ago, according to the property website, driven by challenges in affordability-stretched London and the south
