MADRID -- PSA Group will invest 700 million euros ($785 million) in Spain over the next four years and will build a new car in its Vigo factory in northern Spain starting in 2020, a company spokesman said.
PSA did not give any details of the new model, but local media reported that it will likely be a compact SUV for the Peugeot brand.
The bulk of the investment -- 640 million euros -- will go to Vigo, the spokesman said, confirming comments made by CEO Carlos Tavares during a visit to the region on Wednesday and picked up by Spanish media.
Vigo builds the Citroen Picasso, Citroen Elysee and Citroen Berlingo models alongside the Peugeot 301, according to the Automotive News Europe's European vehicle assembly plant map.
The rest of PSA's investment will be destined for the company's plant in Madrid-Villaverde, which builds the Citroen C4 Cactus.
PSA employs close to 8,000 people in Spain, three quarters of whom are based in Vigo.
PSA's announcement comes after French rival Renault said earlier in May that it will invest over 600 million euros in Spain and produce a new vehicle there too.