The car maker Rover is to create 1,000 new jobs at its Cowley factory at Oxford to build a new luxury car, code-named R40.

The company does not anticipate any recruitment problems, as it will offer full training. Most of the new jobs will be in the production sector.

Rover predicts that a further 5,000 jobs could be created with local suppliers.

The new car will replace Rover's 600 and 800 models. The appointments will take the number of jobs created at Rover since the German car company BMW took over four years ago to 5,000.

The R40 represents a £400m ($650m) investment at the factory and secures its long- term future. Rover plans to double its output to cope with the expected demand for the luxury saloon.

Rover said the R40 investment was part of Rover's rolling 600 million pound annual investment programme, and that the decision was made after one-and-a-half years deliberations.

The Rover chairman and chief executive, Walter Hasselkus, said in a statement that the new vehicle would be "a key element of the BMW Group product strategy and will make a significant contribution to the continued success of the company."

The investment comes on the heels of BMW's multi-billion pound investment in Rover's four-wheel drive subsidiary, Land Rover, to develop the lower-priced Freelander.

Sales of the Freelander have been successful despite the impact of the strong pound on exports.

The new Rover car is due to be unveiled in October.

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