General Motors will build a sports utility vehicle (SUV) at the Opel factory in Ruesselsheim, Germany, and invest 500 million euros ($626 million) in engine production in Europe, Chief Executive Mary Barra said on Thursday.
"This SUV will become a second flagship next to the Insignia," Barra said in a statement, referring to the Opel brand's flagship Sedan.
The pledge forms part of a commitment GM announced in 2013, to invest 4 billion euros in Germany and Europe by 2016 to overhaul Opel's ageing product range with 23 new products and 13 new engines.
In February, Opel signed a collective labour agreement with employees at its German factories in Ruesselsheim, Kaiserslautern and Eisenach, in an accord that includes a job protection guarantee until 2018.
Opel - whose UK sister brand is Vauxhall - employs around 3,300 employees at the Ruesselsheim plant, where the Insignia and AstraBSE 0.55 % models are built.
The company said it would invest the 500 million euros in engine production at Opel factories in Kaiserslautern and Ruesselsheim as well as the GM powertrain plant in Tychy, Poland.
It will also introduce a third shift in mid-2015 at the Opel factory in Eisenach, where the Corsa and Adam sub compact models are built.