This is wonderful news for the motor industry at a time when it has seen so much pain

Amicus general secretary Sir Ken Jackson

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."

General secretary of the Amicus union Sir Ken Jackson agreed.

"This is wonderful news for the motor industry at a time when it has seen so much pain.

"It is a tremendous shot in the arm for Coventry and the West Midlands."

David Frost, Coventry and Warwickshire Chamber of Commerce Chief Executive also welcomed the news.

"Peugeot is a highly sucessful international company and the fact it is thriving in Ryton is good news for everyone.

"It's also a compliment to the existing workforce and a testament to the quality of Peugeot's product. Once again it underlines the area's expertise in every facet of the automotive industry."

Vehicles exported

The second biggest car manufacturer in the UK after Nissan, Peugeot has already invested over �150m in Ryton.

The plant is profitable, earning its parent �104m during the past year.

One reason for this is its high productivity.

Peugeot claims it is Europe's only car factory churning out cars 24 hours a day, seven days a week, 49 weeks a year.

The summer shutdown has been scrapped to keep the assembly line moving as much as possible - the 3,500 employees can now take holidays when they like.

Peugeot has already built more than 600,000 206s in the UK.

And more than 250,000 have been sold here since 1998.

But 50% of the vehicles produced at the plant will be exported.

The 206 SW, which made its world debut at the Geneva Motor Show in March, will go on sale in the summer.