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by Tim Beissmann

Nissan will produce an all-new hatchback in the UK from 2014 to take on the Volkswagen Golf and Ford Focus.

UK Prime Minister David Cameron made the announcement from Nissan’s headquarters in Yokohama, Japan, confirming the new small hatch will be produced at Sunderland alongside a recently announced light hatch, which will be based on the Invitation concept that was revealed earlier this year.

The two new models will see Nissan’s Sunderland employee base grow by 625 workers, and will lead to the creation of approximately 2300 new jobs in other areas of the UK automotive sector.

The Sunderland workforce will grow to 6225, the highest level in its 26-year history, and both production lines will begin operating around the clock to take manufacturing capacity beyond 550,000 vehicles per year. The announcement consolidates Sunderland’s position as the UK’s largest car manufacturer – a title is has held since 1998.

Production of the small hatch has been supported by a £127 million ($196 million) investment from Nissan and an £8.2 million ($12.7 million) pledge from the UK government’s Regional Growth Fund.

Nissan chief operating officer Toshiyuki Shiga said the brand was committed to designing cars to appeal to the European market.

“In Europe, Nissan has achieved record growth in recent years by providing innovative, customer-focused models like Qashqai (Dualis in Australia) and Juke that are designed, developed and produced within the region,” Shiga said.

“Nissan already produces more vehicles in Europe than any other Asian manufacturer and the model announced today will bring world-class quality and leading technology to our customers at the heart of the European C-segment.”

More details on Nissan’s new small hatchback will be revealed closer to its 2014 launch.

Nissan UK does not currently have a direct competitor in the small hatch segment, severely limiting the brand’s sales potential. Nissan Australia currently offers the Tiida small car and will replace it with the new Pulsar in January 2013.