Peugeot is to create up to 700 new jobs at its UK plant under plans to increase production.
A fourth shift will be added at the Ryton factory in Coventry which produces the 206 model.
The number of cars built at the site will increase from an expected 200,000 this year to 230,000 next year, around half for export.
The factory currently employs around 3,000 workers and the new employees will be taken on between now and the end of the year.
Peugeot's director of public relations Andrew Didlick said: "We are delighted with the success of the 206 and this announcement is great news for Coventry and the UK motor industry."
Union leaders warmly welcomed the news.
Sir Ken Jackson, general secretary of Amicus, said: ''This is wonderful news for the motor industry at a time when it has seen so much pain.
Comments: Our rules
We want our comments to be a lively and valuable part of our community - a place where readers can debate and engage with the most important local issues. The ability to comment on our stories is a privilege, not a right, however, and that privilege may be withdrawn if it is abused or misused.
Please report any comments that break our rules.
Read the rules hereComments are closed on this article