Volkswagen’s troubled, loss-making Spanish unit SEAT spent EUR800m on R&D and production facilities ahead of the start of production of the redesigned Leon hatchback at its factory in Martorell, near Barcelona, Spain.

The Leon, unveiled at September’s Paris show, will, the automaker said, “drive the international expansion of SEAT and will increase production at the Martorell plant, where it will be built alongside the Ibiza, Altea, and Exeo – together with the Audi Q3.

The five-door hatchback, which shares its platform with the latest VW Golf and Audi A3, is the first of a new Leon model family which, by 2014, will include a three-door variant and a five-door estate/wagon. This mimics the thinking behind the smaller Ibiza range and will, SEAT said, help the Leon “become a key competitor in the compact [C] segment in Europe – which accounts for 38% of total car sales.

SEAT said the new MQB modular transverse platform, provides “a significant reduction in manufacturing time compared with the second generation Leon”.

The platform also offers greater flexibility, enabling production of the three versions of the Leon as well as Altea variants all on the same line. SEAT has also adapted its manufacturing processes to ensure the highest levels of precision and quality, by the use of latest-generation methods such as laser welding and measurement, as well as hot stamping.

Production of the new Leon is claimed to have secured 1,600 jobs on the Martorell assembly line and over 6,000 in the supply chain.

Production chief Andreas Tostmann said: “With the new Leon we have increased productivity by 10% and become more flexible, thus guaranteeing optimisation of production costs.”

Together, the first two generations of the Leon achieved total global sales of 1.2m units beginning with 1999’s original model and continuing with the 2005 full redesign.

Sales begin this year in Europe with right hand drive UK sales starting early in 2013, the year that also will see the global motor show debuts of the three-door and estate versions.

The Leon is the first in its class to offer full LED headlights as an option.

It is 90kg lighter and 52mm shorter than its predecessor, improving fuel consumption and handling, yet it has more interior passenger space and luggage capacity. All models have start/stop technology for greater efficiency – on average using 15% less fuel than the previous generation.