Car giant Toyota is to build its new-generation family-sized hatchback at its UK factory, creating hundreds of new jobs, it was announced today.
The company said its plant at Burnaston in Derbyshire would be the sole European manufacturing centre for the hatchback.
Prime Minister David Cameron said the announcement was "fantastic news and a massive vote of confidence for UK manufacturing".
Toyota said it would be investing more than £100 million in Burnaston as a result of the production decision, taking its total investment in the UK to more than £2.1 billion since 1989.
Production of the hatchback model - including hybrid, petrol, and diesel versions - will increase Burnaston production volumes, creating up to 1,500 additional jobs in the next two years, with the first phase of 500 to be recruited in the middle of next year.
Mr Cameron said: "This investment and the jobs it will create provide a terrific boost not just to the local economy but to the whole country, and is a tribute to the great skill, hard work and sheer professionalism shown by the Toyota workforce.
"Toyota's commitment to the UK shows the growing strength of the UK car industry - it is our great British success story."
He went on: "It is vital that we build a more balanced economy, one with manufacturing, innovation and exports at its heart. The automotive sector is leading the way in helping us achieve this. It is an extraordinary success story and one that we are very proud of."
Didier Leroy, Toyota's motor Europe president and chief executive, said: "Toyota has a long and successful record of building vehicles and engines in the UK and our facilities here are among the finest in the world in terms of efficiency and environmental performance.
"The investment we are making will secure a dynamic future for Toyota Manufacturing UK as a leading manufacturing centre for our core models in Europe. It also supports our commitment to delivering superior quality vehicles and contributes to Toyota's sustainable growth in Europe.
"We are not only making a significant investment in our own operations and workforce here, but also sustaining our supplier network in the UK. We know that together we can build vehicles that deliver the highest standards of quality, reliability and environmental efficiency."
The hatchback will be a C-segment vehicle, meaning that it will be a small family car in the sector between the supermini and the large family car.
The C-segment includes Toyota's own Auris model and cars such as the Ford Focus and Volkswagen Golf.
Society of Motor Manufacturers and Traders' chief executive Paul Everitt said today: "Toyota's announcement is excellent news for its employees and UK-based suppliers.
"This year's wave of high-profile UK investment announcements is great news for the future of the industry, creating and protecting thousands of jobs and helping to secure economic recovery."