The Japanese car giant Nissan Motor Company will produce the all-new midsized hatchback model at its Sunderland plant in the UK in 2014 with an investment of £127m and a £8.2m offer of support from the UK Government Regional Growth Fund.

This move will create an additional 225 jobs at Nissan and 900 at component companies supplying Nissan in the UK.

This announcement made by the British Prime Minister David Cameron and Nissan COO Toshiyuki Shiga follows last month’s Geneva Motor Show that Sunderland will also produce a mainstream B-segment compact car based on the Invitation concept from 2013.

Production of these two new models is expected to create more than 3,000 jobs in the UK automotive industry over the next two years.

Nissan is planning to implement additional production shift at Sunderland plant to build hatchback model. The plant, which is now preparing to pass the half million mark for the first time, produced 480,000 cars in 2011.

Shiga said: "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.

"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. I would also like to thank the UK Government for its strong and sustained support which allows us to continue making significant, long-term investment in our Sunderland operation."

Cameron said: “It is fantastic news that Nissan will be building their new hatchback model in the UK and that they expect to create more than 1000 jobs at the Sunderland plant and in the supply chain across the country. It's proof of the strength and vitality of the British manufacturing industry that leading companies like Nissan are expanding their production in the UK.

"I’ve already seen firsthand the tremendous work at the Nissan Sunderland plant and it's great to be visiting the company's headquarters in Yokohama today. Nissan’s investment in the UK is a huge vote of confidence in the skills and flexibility of the UK workforce. We want to attract more investment like this and that's why we’re encouraging foreign companies with incentives like the Regional Growth Fund."