The car industry has been given a much-needed boost by an announcement by Japanese giant Honda that it plans to build a new model at its UK plant.

The four-wheel drive CR-V will be built at Swindon, Wiltshire, in eight weeks time, becoming the fifth model off the production line.

Honda said the move followed "exceptional demand" for the car throughout
Europe since it was launched three years ago. It is currently built in Japan.

Around 20,000 of the new models are expected to be built in the next year at Swindon, which currently produces the Accord and Civic.

Honda said the news reaffirmed its long-term commitment to the UK.

The company announced plans to cut back on production at Swindon earlier this month mainly because the plant is undergoing a £120 million modernisation programme.

A new manufacturing system is being installed and Honda says when it is completed a wide range of models will be produced at very short notice.

The company said it was also working closely with its suppliers to improve productivity.

Minoru Harada, chief executive of Honda's European operations said: "We are delighted that we will be building the CR-V at Swindon to meet European customer demands.

"This manufacturing facility demonstrates the flexibility and agility that characterises Honda's success and confirms our long term commitment to making top quality cars in Britain."

Honda opened its factory at Swindon in 1992 and is currently recruiting to boost the number of workers from the current 3,000 to around 4,000 by 2002.