Japanese carmaker Nissan Motor Co on Tuesday said it will spend $200 million to build a new hatchback at its UK plant as British Prime Minister David Cameron began a tour of Japan and Southeast Asia aimed at boosting trade and investment ties.

The investment, announced hours before Cameron's plane touched down at Tokyo's Haneda airport, underscored the business focus of his trip.

Nissan's investment in the UK is a huge vote of confidence in the skills and flexibility of the UK workforce. We want to attract more investment like this, said Cameron, due to meet later on Tuesday with Japanese Prime Minister Yoshihiko Noda.

This trip is really about British business, British exports and investment from Britain into these countries, and investment from these countries into Britain, Cameron told reporters accompanying him.

Nissan's new car, which does not yet have a name, will go into production in 2014 and create 225 jobs at its Sunderland factory in northern England and 900 more at the carmaker's British suppliers.

The new commitment comes on top of $200 million Nissan plans to spend to build its new Invitation compact vehicle from mid-2013 in Sunderland and will take manufacturing capacity at Britain's biggest car plant beyond 550,000 vehicles a year.

Cameron's two-year-old coalition government, which is trying to boost British manufacturing to lessen reliance on financial services rocked by the 2008-2009 global crisis, backed the new Nissan investment with 8.2 million pounds ($13 million) of funding.

The car industry has been a bright spot for the stagnating British economy with Toyota and Jaguar Land Rover, owned by India's Tata Motors, recently announcing new British investments, although there are questions over the future of GM's Ellesmere Port plant.

Cameron also aims to reduce Britain's dependence on trade with the crisis-hit euro zone by doing more business with fast-growing Asian economies and emerging markets around the world.

His latest trip, where he is accompanied by 35 executives from companies including defence giant BAE Systems, engine maker Rolls-Royce and oil major Shell, is the latest in a series of visits to key overseas markets.

In all, British officials say, more than 200 million pounds of Japanese investment in Britain will be announced during Cameron's visit, including a Mitsubishi Corp wind turbine research project in Edinburgh and a Panasonic fuel cell research centre in Cardiff.


Cameron and Noda are expected to discuss cooperation on defence manufacturing, nuclear decommissioning and free trade, as well as the violence in Syria and relations with Iran and North Korea.

Architecture and infrastructure firms and nuclear industry executives are with Cameron, reflecting British hopes for a slice of the vast sums Japan will spend to clean up and rebuild regions devastated by last year's earthquake and tsunami.

Swathes of coastal northern Japan were washed away and the Fukushima nuclear power complex north of Tokyo was wrecked, releasing radiation and forcing 80,000 people to evacuate.

British companies have significant expertise in nuclear decommissioning and clean-up, with 19 nuclear sites in the UK currently being managed through the process, Cameron said.

British firms see the shutdown of Fukushima and possible earlier-than-planned decommissioning of some other older nuclear plants as a business opportunity. Japan's nuclear industry is on its knees: all but one of its 54 reactors are offline, mostly idled as they came due for maintenance. None can be restarted until each clears a safety review and gets the nod from local governments. Last week, trade and energy minister Yukio Edano said Japan should aspire to fully phase out nuclear power, even as the government strives to persuade a wary public that it is safe to restart reactors.

Edano said his remark was a personal and not necessarily a realistic view.

Cameron, warding off possible criticism of the inclusion of several defence firms on his tour of Asia, said seeking arms deals was perfectly responsible and respectable.

He hopes to capitalise on Tokyo's recent decision to relax its self-imposed decades-old ban on military equipment exports, which could open the way to the joint development of arms by Japanese and British firms.

Cameron also hopes to make progress on securing a free trade agreement between the European Union and Japan. Both sides agreed to prepare for talks on a deal last year.

(Additional reporting by Adrian Croft; Editing by Tomasz Janowski and Edwina Gibbs)