Kia, Europe's fastest growing carmaker, has started work on its first European car plant to help meet rocketing demand. The £690m plant in the Slovak Republic will have the capacity to build up to 300,000 cars a year.

It will employ 2,800 people directly and will include an engine production plant. A supplier park will employ a further 3,000 people and will represent a further £1.5bn investment.

All vehicles made at the plant will sold by Kia's UK and European dealer network, including new B- and C-segment cars. Production is expected to begin in 2006.