Nissan has confirmed it will build both the new Qashqai and the X-Trail SUV at its Sunderland plant thanks to government “support and assurances”.
The Japanese company’s commitment to Britain’s biggest car plant had been in doubt following the EU referendum.
It comes as economic growth in the three months after the vote confounded expectations, growing by 0.5%.
That is slower than the 0.7% in the previous quarter but stronger than analysts’ estimates of about 0.3%.
Nissan’s decision is the first major development for the car industry since the Brexit vote and secures 7,000 jobs.
“The support and assurances of the UK government enabled us to decide that the next-generation Qashqai and X-Trail will be produced at Sunderland,” said Carlos Ghosn, Nissan’s chief executive, saying he welcomed Prime Minister Theresa May’s “commitment to the automotive industry in Britain”.
Last month, he had warned that Nissan might not invest in the Sunderland plant unless the government guaranteed compensation for costs related to any new trade tariffs resulting from Brexit.
A Nissan spokesman said making the X-Trail at Sunderland could lead to hundreds of new jobs being created in the coming years.
Mrs May described the announcement as “fantastic news”, adding: “This vote of confidence shows Britain is open for business.”
A Downing Street spokesman could not give any details of the government’s promises to the company.
A senior executive at Nissan Europe, Colin Lawther, said the company had received “no special deal”.
“It’s just a commitment from the government to work with the whole of the automotive industry to make sure the whole automotive industry in the UK remains competitive,” he told the BBC.
“We would expect nothing for us that the rest of the industry wouldn’t be able to have access to. We see this as a whole industry thing, not a Nissan thing.”
Business Secretary Greg Clark said: “The fact Nissan have not only made a long-term commitment to build the next generation Qashqai and X-Trail at Sunderland, but decided to upgrade their factory to a super-plant, manufacturing over 600,000 cars a year, is proof of the strength of the sector.”