Honda said Tuesday it will spend £200 million ($300 million) to upgrade a British factory that the Japanese automaker downsized last year owing to a slump in European demand.
The company said it was aiming to turn its Swindon plant in western England into a global production hub for its five-door Civic compact.
Japan's number-three automaker said the cash would help improve the plant's efficiency and boost the number of passenger cars that can roll off its assembly lines. The factory presently has the capacity to make 250,000 vehicles annually.
"As a global production facility for the Civic five-door model, we look forward to making the most of the opportunity to export this model not only to our European customers, but also, to key global markets," Jason Smith, director of Honda of the UK Manufacturing, said in a statement.
A year ago, Honda cut 340 jobs at the same factory, accounting for roughly 10 percent of the plant's manufacturing positions, blaming weak European demand in the wake of the global financial crisis.
The plant produced about 120,000 vehicles last year, roughly half the 230,000 units it made in early 2008.
Honda earlier this year cut its annual profit forecast as its faces soaring recall costs, including from an exploding airbag crisis linked to at least five deaths.
The automaker lowered its fiscal year to March net profit forecast by 3.5 percent to 545 billion yen ($4.5 billion), citing "quality-related expenses" and falling sales in Japan and the world's biggest vehicle market China.