Honda has started production of the eighth generation Civic at its £1.33bn production plant in Swindon.

The model is due to go on sale in January 2006, with other new models in the Civic range to be launched over the next 12 months.

Shigeru Takagi, president of Honda Motor Europe, said: "The British-built Civic has a key role to play in our model line-up as we expect to be selling 120,000 Civics in 2007; a 50% increase on current sales. For Honda’s European operation, this is the most important launch in its history."

The new UK built Civic hatchback will feature Honda’s high-performance 2.2 i-CDTi diesel engine, a new1.8 litre i-VTEC petrol engine and a 1.4 i-DSI petrol engine.

The original concept for the new model was unveiled at the Geneva Motor Show seven months ago.