LONDON - Japanese carmaker Nissan Motor Co said on Tuesday it will invest US$200 million (S$252.3 million) to build a new hatchback in Britain as British Prime Minister David Cameron began a tour of Japan and Southeast Asia aimed at boosting trade and investment links.
The new car, which does not yet have a name, will create 225 jobs at Nissan's Sunderland factory in northern England and 900 more at component companies supplying Nissan in Britain. Production is due to start in 2014.
The new investment is on top of US$200 million Nissan said in March it would spend to build its new Invitation compact vehicle from mid-2013 in Sunderland and will take manufacturing capacity at Britain's biggest car plant beyond 550,000 vehicles a year.
"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," said Cameron, due to hold talks later on Tuesday with Japanese Prime Minister Yoshihiko Noda.
Cameron's two-year-old coalition government, which is trying to boost British manufacturing to lessen reliance on financial services rocked by the 2008 global crisis, backed the new Nissan investment with 8.2 million pounds (S$16.4 million) of funding.
The car industry has been a bright spot for the stagnating British economy with Toyota and Jaguar Land Rover, owned by India's Tata Motors, recently announcing new British investments, although there are questions over the future of GM's Ellesmere Port plant.
Cameron also aims to boost British growth and lessen reliance on trade with crisis-hit euro zone countries by doing more business with fast-growing Asian economies and emerging markets around the world.
Cameron's tour of Japan and Southeast Asia, accompanied by 35 executives from companies including defence giant BAE Systems , engineer Rolls-Royce and oil major Shell , is the latest in a series of similar trips to key overseas markets.
In all, British officials say, more than 200 million pounds of Japanese investment in Britain will be announced during Cameron's visit, including a Mitsubishi wind turbine research project in Edinburgh and a Panasonic fuel cell research centre in Cardiff.
DEFENCE, NUCLEAR ON AGENDA
Cameron and Noda are expected to discuss cooperation on defence manufacturing, nuclear decommissioning and free trade, as well as the violence in Syria and relations with Iran and North Korea.
Architecture and infrastructure firms and nuclear industry representatives are accompanying Cameron, reflecting British hopes for a slice of the vast sums Japan has set aside to clean up and reconstruct regions devastated by last year's earthquake and tsunami.
Swathes of coastal northern Japan were washed away and the Fukushima nuclear power complex north of Tokyo was wrecked, releasing radiation and forcing 80,000 people to evacuate.
"British companies have significant expertise in nuclear decommissioning and clean-up, with 19 nuclear sites in the UK currently being managed through the process," Cameron said.
On defence, Cameron hopes to capitalise on Tokyo's recent decision to relax its self-imposed decades-old ban on military equipment exports, which could open the way to the joint development of arms by Japanese and British firms.
Cameron also hopes to make progress on securing a free trade agreement between the European Union and Japan. Both sides agreed to prepare for talks on a deal last year.