VW Group's Škoda said its Kvasiny plant and public infrastructure surrounding the east Bohemian site would be modernised and expanded over the next few years.

The aytomaker has signed a memorandum on cooperation with the Czech government and Hradec Králové authorities to create up to 1,300 new jobs and increase production to 280,000 vehicles a year at the Kvasiny plant by 2018.

The company plans to spend around CZK7.2bn (US$285m) at the site over the next three years. The Czech state and the Hradec Králové region will also be spending on public infrastructure and improved education and health in the city and region.

Vahland and HR director Bohdan Wojnar signed the agreement, and Sobotka and Franc signed on behalf of the Czech state.

"As an important cornerstone of our production network, the Kvasiny plant makes a vital contribution to our growth strategy," said Škoda CEO Winfried Vahland.

"Over the coming years, Škoda will be expanding further in this location, and the company plans to invest more than CZK7bn crowns by 2018. Before then, Kvasiny will be experiencing the most comprehensive modernisation and expansion in its 81-year history."

Expanding and modernising the Kvasiny plant will be financed by Škoda.

The site began producing the redesigned Superb a few days ago after the automaker introduced new production technologies, assembly and logistics areas. Around CZK1.7bn was spent on new car body production alone.

Plant view