Honda has announced a major £267m investment in its car manufacturing plant in Swindon – which has led to 500 new jobs at the factory this year.

Production of the firm's new CR-V model starts today and marks the start of the huge multi-million pound programme. The cash is the single biggest investment by the firm in over a decade.

The cash supports production of the new Civic, CR-V and a new 1.6-litre diesel engine at the plant and has helped swell the workforce from 3,000 to 3,500.

By the end of 2012, production at Swindon is forecast to have doubled with 183,000 vehicles rolling off the line. Honda plans to increase that figure to 250,000 units within three years.

"This investment programme underpins Honda's commitment to manufacturing in Britain and to our UK workforce," said Dave Hodgetts, managing director of Honda UK.

"It reaffirms the Swindon plant's position as the cornerstone of Honda's European operations, as it has been for the past 25 years."

The Society of Motor Manufacturers and Traders chief executive Paul Everitt added: "Honda's announcement is excellent news for the industry and will come as a tremendous boost to the Swindon-based workforce.

"Honda's commitment to the UK demonstrates the growing strength and competitiveness of our manufacturing sector and with jobs created to support new model programmes, it reinforces the wider economic impact of the news.

"Our manufacturing industry continues to drive recovery and with long-term investments being made across the automotive sector, it will play an increasingly important role in a rebalanced UK economy."

Honda's investment announcement comes only days after fellow UK car manufacturer Vauxhall revealed it would be shutting down its factories for a week in September due to falling demand in Europe.