Jaguar Land Rover is to invest a further £150m to double the size of its unfinished engine plant in the West Midlands, creating 700 additional jobs.
The company aims to raise the eventual number of jobs on the i54 business park on the Staffordshire-Wolverhampton border to more than 1,400.
The first engines are scheduled to come off the production line in 2015.
Jaguar Land Rover's initial plans set out in 2011 were for a £355m investment and nearly 750 jobs.
Jaguar Land Rover (JLR), which has its headquarters at Gaydon, Warwickshire, said total investment at the i54 site would now be more than £500m.
The company has also announced spending of £2.75bn on further product development.
Executive director Mike Wright said i54 was a major part of the company's long term plans.
"Since the original announcement was made in 2011 we've been able to look at our plans, look at potential for our products around the world and as a result of that analysis we've decided to put even more capacity into the engine manufacturing centre, invest more money and create more jobs," he said.
The firm reported a 30% increase in global sales last year, selling 357,773 vehicles to 177 different countries.
Sales in the Chinese market have risen 80% in the past year, the company said.
Unite general secretary Len McCluskey said the news was a "fantastic boost for manufacturing".
He said: "Having lobbied JLR and the last Labour government to set up a new engine plant in the West Midlands, we're delighted that this state-of-the-art facility is going to be expanded.
"This is a massive vote of confidence in the skills of the UK workforce.
"JLR's investment will generate quality jobs in the West Midlands and is a much-needed shot in the arm for Britain's struggling manufacturing sector."
Ninder Johal from the Black Country Chamber of Commerce said the news did not surprise him.
He said: "We've been hearing a lot of positives in the news about all the sales in China and developing economies for Jaguar and it's a boost for the area.
"Jaguar Land Rover didn't come to the Black Country because they felt like it, they came here for a specific reason, the skills are here, the supply chain is here and logistically it's easy to get your products in and out."
Staffordshire County Council is investing £18.5m to build a dedicated road junction on the M54 for access to the plant, which will be matched by investment from Wolverhampton City Council.
A joint statement by the two councils and South Staffordshire Council said it was "excellent news"
It said: "We are delighted that Jaguar Land Rover is strengthening its commitment to the i54 South Staffordshire site before construction of the main facility has even been completed.
"Extending the plant will create hundreds of jobs in addition to the 750 that will be created when the advanced engine manufacturing facility is operational – not to mention the thousands more through the supply chain."
Sourced from www.bbc.co.uk