Expanding its Slovak plant to build the new Up small car would create 1,500 direct and 7,000 indirect jobs as of 2011, Volkswagen has claimed.

"The launch of production scheduled for 2011 will add 1,500 new jobs to the 7,800 already at the plant," Volkswagen chief executive Andreas Tostmann said in a press release cited by AFP.

"The EUR308m (US$400m) investment will create up to 7,000 indirect jobs, more than half of them in Slovakia," he added.

Construction work to expand the plant, which started earlier this week, would also create 1,800 temporary jobs.

Volkswagen also builds the Touareg, Audi Q7, Porsche Cayenne and Skoda Octavia models in Slovakia but has had to cut production several times since the beginning of the year due to low demand, AFP noted.

The Slovak government said in December it would support the VW investment with tax relief of 5% of the total investment.

Volkswagen, which started production in Slovakia in 1991, made 188,000 vehicles at its Bratislava plant last year, down from 249,000 in 2007 as the global crisis took hold.

VW picks Slovakia to build new small car