French auto giant Peugeot is to build the estate version of the popular 206 at its Coventry plant - a decision described by the company as a "huge confidence boost" for the plant.

Seven hundred temporary jobs will also be created at Ryton and the summer shutdown abolished.

A Peugeot spokesman said the new car and the summer shutdown would benefit the plant and its 3,100 workers.

"There will now be flexible holidays for manufacturing staff, and we will take on and train up to 700 temporary staff to ensure that production levels are maintained.

Production target

"We believe we are the first manufacturer in the UK to abolish the summer shutdown."

The company said employees would be given a choice of holiday time, within certain constraints.

The firm will invest £10.3m in the Ryton plant to produce the 206 SW, which will be built alongside the three and five-door 206.

The production target for the new car for 2002 is 60,000 vehicles - they will go on sale in the summer.

Unions welcomed the announcement and said Peugeot in the UK was clearly a "success story".

'Track record'

Chris Liddell, regional officer of the Transport and General Workers Union, said: "The T&G is pleased that we have been able to negotiate an agreement which secures and creates jobs to maintain production at the same time as ensuring our members get the holidays they want and deserve."

Duncan Simpson, national officer of Amicus, said: "This is further recognition of the value of Peugeot's investment in the plant.

"The track record on quality, productivity and delivery on schedule at the Ryton plant is second to none. This decision is a credit to the workforce."

The 206 SW is identical to the 206 hatchback and 206 coupe cabriolet from the front, but features a 19-cm rear overhang.

This results in a 28%-larger boot area than the hatchback.

The car will be make its world debut at the Geneva Motor Show next month.

Some 4,280 cars are built each week at Ryton, and more than 250,000 206s have been sold in the UK since 1998.