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3 September 2015, 06:00 | Updated: 30 March 2016, 13:50
Nissan is investing £100m in its Sunderland plant to allow the building of the next generation Juke model, securing thousands of jobs.
The Japanese company, which employs 6,700 at the factory directly, said the decision demonstrated it was the "undisputed leader" in the so-called crossover vehicle market.
Crossovers are cars which tend to have the versatility of an estate model but offer the look of a small four-wheel drive.
The design of the new Juke will be completed by engineers in London and Bedfordshire.
The Sunderland plant also makes the Qashqai, Note and electric Leaf models in addition to the Juke, which first entered production in 2010 following more than 22,000 pre-orders.
It produces more than 500,000 cars annually and Nissan said the decision also boosted more than 27,000 jobs within its local supply chain.
Nissan Europe chairman, Paul Willcox said:
"The Juke's unique design is one of the reasons Nissan is now the undisputed crossover leader, underpinning five consecutive years of sales growth in Europe.
With the next generation Juke now confirmed for future production, customers can be assured that Nissan is going to remain the benchmark in the crossover segment for many years to come.
This announcement also gives security to our Sunderland plant beyond 2020, which the team has earned through many years of hard work and their ability to continually raise the bar on quality."
The chancellor, George Osborne, said:
"It's fantastic news that Nissan will be building their new car here in Sunderland and securing valuable jobs for thousands of working people in the area.
Our ambitious plan to build the Northern Powerhouse means building on the area's strengths - including manufacturing - and this announcement is an important sign of Britain being chosen as a global leader in car production."