Nissan, the Japanese car giant, will begin production of a new model at its Sunderland plant as part of a huge expansion that could create hundreds of jobs.
The company, which employs 4,076 people producing 205,000 cars a year at the pounds 1bn factory, plans to announce its proposals on Monday.
As well as releasing details of a new car, likely to be a replacement or overhaul for the Primera saloon, Nissan may also shift diesel engine assembly to Sunderland.
Japanese companies have been moving production outside the country to escape the high cost of the yen, and Honda and Toyota are also raising output from their UK plants.
The new Nissan will be the fourth model to be produced by the plant, which has made Bluebirds, Primeras and Micras, a high percentage for export.
Earlier this year the millionth car rolled off the production line at Sunderland. Primeras have made up almost half the output since 1986 and a five-door version has been exported to Japan.
The new car is due to go on sale next year, the 10th anniversary of Nissan beginning production on Tyne and Wear. A spokesman said that "1996 would be a big year for Nissan", but refused to comment on the company's production plans.
The Sunderland plant has not fulfilled its full expectations because of recession in the European car market, though Nissan retains a long- term hope it might eventually produce 400,000 cars a year in the UK.
A shift in assembly production of diesel engines to Sunderland would also be a big boost for the plant, and would probably mean sourcing more components from Europe. Nissan estimates it spends about pounds 1bn a year on buying components in Europe.
Diesel assembly in the UK means Nissan could ease the yen pressures, while avoiding the need for a big investment in new facilities.
Diesel-powered cars account for 20 per cent of Primera sales. Nissan may also fit diesel engines to its Micra small car because sales in some markets have been held back because no diesel variant is available.Reuse content