The differing fortunes of car makers in Europe were on display at the Geneva Auto Show, as a renewed commitment to European manufacturing from Nissan and strong sales forecasts from BMW and Volkswagen contrasted with a deeply discounted rights issue from Peugeot to fund its alliance with General Motors.

Japanese car maker Nissan Motor Co <7201.T> said on the first day of the show on Tuesday it would invest $200 million to build its new Invitation compact car from mid-2013 in Sunderland, northeast England, where its workforce will rise by 600 to 6,000.

Japan's No.2 automaker said the move, which will be supported by a $15 million loan from Britain, would create a total of 2,000 jobs at Nissan and its suppliers.

Meanwhile, Germany's Volkswagen AG is hot on the heels of world number one Toyota Motor Corp <7203.T>, with Chief Executive Martin Winterkorn saying Europe's biggest automaker was confident of achieving its target of stealing the crown after strong car deliveries at the start of the year.

And BMW said it expected group sales to grow this year, after a 14 percent year-on-year increase in February, with a young model range and growth in China and India offsetting a sluggish Europe.

Volkswagen's upmarket Audi business also expects to grow faster than the 4 percent figure predicted for the global market, according to sales chief Peter Schwarzenbauer.

We believe we can do better than that, Schwarzenbauer said. Effects from weakening markets in southern Europe should be well compensated for.

Audi believes demand for luxury vehicles in China, where it is market leader, will continue to expand in coming years. The Chinese luxury market could more than double to 2.3 million cars by 2020 from 945,000 last year, Schwarzenbauer said.

Audi sold more than 200,000 vehicles in the first two months of the year, a record for the company.


Nissan expects initially to produce about 100,000 a year of the new Invitation model.

The British government has been seeking to save automotive jobs as the European sector braces for capacity cuts.

Nissan makes its Qashqai and Juke models in Sunderland, the largest car factory in Britain, where it produces around 500,000 vehicles annually.

PSA Peugeot Citroen
, meanwhile, showed a different side to the European automotive story, unveiling a cut-price rights issue to fund the alliance with General Motors Co it hopes will help it accelerate growth in new markets and cut costs on developing new models.

GM's Chevrolet Volt plug-in hybrid was named European Car of the Year in Geneva, showing low-emission technology had won over the experts.

However, consumer approval is proving more elusive: earlier this month the carmaker said it was halting production of the plug-in hybrid and laying off 1,300 workers for five weeks this spring, to control stocks of the vehicle in the face of disappointing demand.

(Additional reporting by Laurence Frost and Christiaan Hetzner; Writing by Helen Massy-Beresford; Editing by Chris Wickham and David Holmes)