Spanish automobile manufacturer SEAT is investing EUR800m at its Martorell plant in Spain, where it has started production of the new Leon hatchback.
The investment will primarily be put into vehicle research and development, and production facilities.
The new Leon will increase the production capacity at the Martorell plant, where the company builds the Ibiza, Altea, and Exeo - together with the Audi Q3.
Unveiled at Paris Motor Show, the new five-door hatchback is the first of the new Leon model family, which by 2014 will include a sleek three-door variant and a practical five-door estate.
The new Leon will be available in TSI petrol and TDI diesel engines as well as in an Ecomotive version.
SEAT executive vice president for Production Andreas Tostmann said that with the new Leon the company has increased productivity by 10% and become more flexible, thus guaranteeing optimisation of production costs.
"The 800 million euros investment in the new Leon consolidates our leadership position as Spain's number one industrial investor in R&D," Tostmann said.
The Leon is equipped with an ecomotive diesel engine that offers 74.3mpg combined cycle fuel economy figure and CO2 emissions of 99g/km, while the 148bhp diesel comes with plus-7ompg and 110g/km, and the 1.8 TSI petrol delivers 177bhp and emissions of under 140g/km.
