Up to a thousand new jobs are planned at a new black cab plant in Coventry following a £250m investment by the London Taxi Company’s Chinese owner, Geely.

It will be home to the company’s research, development and assembly operations, including the development of electric and ultra-low emission black cabs.

Construction work on the new plant is scheduled to begin in June this year, with production expected to start in April 2017. LTC’s existing plant in Coventry, which has been running for almost 70 years, will close and its 240-strong workforce will move to the new factory.

Investment in the new plant is part of an ambitious plan to capitalise on a new market opening up for black cabs as a result of changing low-emission regulations around the world.

At the moment, LTC makes about 2,000 black cabs a year, but the new facility will have the capacity to assemble up to 36,000 cars.

The prime minister, David Cameron, said Geely’s investment was good news for Coventry and the broader UK economy.

He said: “It means that more hardworking people will have the financial security that a job and regular pay-packet bring and demonstrates that the UK is open for business. The London black cab is iconic around the world and I am pleased that the next generation will have a state of the art production facility in the UK.”

A new version of the famous London black cab will be launched by LTC at the end of 2017 and across international markets in 2018.

It is being designed to comply with new rules announced by the London mayor, Boris Johnson, requiring a reduction in the level of emissions allowed from new taxis from January 2018.

Johnson said: “The production of zero-emission capable vehicles, incorporating the latest state of the art technology, is essential as we strive to create the greenest taxi fleet in the world for London.

“The vehicles [the new] facility produces will help transform London’s taxi fleet, boost jobs and growth in London and the West Midlands, and secure the long-term future of the taxi industry, whilst ensuring everyone who lives, works in or visits our city has the cleanest possible air to breathe.”

Geely is trying to revive the fortunes of LTC after buying up its assets and the name in 2013 following the collapse of Manganese Bronze, the former owner which was quoted on the London stock exchange.

The Chinese car manufacturer already held a 20% stake in the firm since 2009, after forming a joint venture with Manganese Bronze in 2006 to supply the UK business with car parts.

Li Shufu, founder and chairman of Zhejiang Geely Holding Group, said: “This investment will secure the future of London Taxi Company. Almost two years after we acquired this company – in which we first took a stake in 2006 – it has become an important part of our global automotive strategy.

“Today’s announcement symbolises the close business links between China and the UK, which is an attractive market for Chinese inward investment. The London Taxi expansion will demonstrate the benefits of Anglo-Chinese partnerships.”

Geely is hoping its investment in black cabs will open up significant new export opportunities. Currently about 90% of the black cabs made in Coventry are for the UK market, predominantly London, with only a small minority exported.

The ambition is that about 20% of taxis will be built for the UK, with the remaining 80% shipped abroad to markets elsewhere in Europe and beyond.

The manufacture of a lefthand drive version of the black cab will begin at the new plant about six months after production begins.

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