Nissan said it will build a compact car at its plant in Barcelona, Spain, dashing the hopes of French unions that the model would be made in one of alliance partner Renault's factories in France.
Nissan will invest 130 million euros ($178 million) in the Barcelona factory to create capacity to build 80,000 units of the car a year, with production starting in 2014, the company said in a statement on Monday. The investment will create 1,000 direct jobs and 3,000 indirect jobs.
The car will rival models such as the Volkswagen Golf and Ford Focus and marks the automaker's return to the European mainstream compact segment that the company quit when it stopped selling the Almera in the region in 2006.
The model will be the first car to be produced in the Barcelona factory, which builds the Pathfinder SUV, Navara pickup and NV200 commercial van.
Nissan said it is also investing 14 million euros in Barcelona to create 24,000 units of additional annual capacity for the pickup and 6 million euros to produce transmissions for the Leaf electric car and eNV200 electric van.
Nissan is returning to the European compact segment to help the company achieve its aim of supplanting Toyota as the region's No. 1 Asian brand by unit sales. The compact would bring more fleet customers to the brand. The automaker's current compact model, the Qashqai, is a hit with private buyers.
The automaker has not released any information about the new compact but company executives say it will not be called the Almera.