A TRAIN manufacturer which is creating more than 700 jobs in the North-East has won the £360m contract to make high speed trains to run between London and Cornwall.

Hitachi has secured the deal to replace the 40-year-old trains on the First Great Western route with rolling stock that is more powerful, greener and more efficient than the existing fleet.

In the coming weeks the firm will open a new £82m assembly plant, test track, and research and design facility at Newton Aycliffe, County Durham, where it will employ about 730 people.

The trains for First Great Western will be built by Hitachi's team in Japan and are due to start running on the line from Paddington to Penzance from 2018. The deal is another major coup for the firm which has already won contracts to manufacture British inter city trains for the East Coast and Great Western main lines, as well as for commuter trains in Scotland, at its Aycliffe plant when production starts next year.

The contract to supply First Great Western with 29 new long distance trains follows an announcement earlier this week that Hitachi had won the £24m deal to supply traffic management system to London's north-south Thameslink network.

"There is a real buzz about the company right now," Darren Cumner, Aycliffe plant manager for Hitachi Rail Europe told The Northern Echo. "We are on a roll at the moment and winning these contracts is a clear sign that people really value the products that we can supply."

Karen Boswell, Managing Director for Hitachi Rail Europe, said: "Today’s announcement builds on our significant and sustained investment in the British rail sector.

"This contract with First Great Western recognises the quality of Hitachi’s high speed trains and our world class engineering capability. Hitachi Rail Europe is committed to delivering trains for the UK’s fare paying customers that are genuinely transformative in terms of speed, capacity and comfort. This new fleet will be a revolution in customer experience for those travelling to and from the south west, and we look forward to delivering Hitachi trains for use from 2018 onwards."

Rail minister Claire Perry, who visited Exeter to mark the announcement, said: "These new trains will make a real difference to the millions of commuters, business travellers and tourists who use this route every year.

"This industry initiative goes hand in hand with the work this government is doing to reverse decades of underinvestment in transport infrastructure in regions like the south west. This will not only mean better journeys for customers, it will also help to secure long term economic growth across the country. Like the new IEP trains serving cities in the north of England, this new fleet will help to open up the region for investment."

In a trading update yesterday Japan-based Hitachi said its net profit grew 31 per cent in the April to June quarter, aided by a sharp drop in the yen, cost cuts and strong results in its auto and railway divisions.

The multinational, which makes a huge range of products, from batteries to nuclear plants, reported net income of £285m for the first quarter of the fiscal year, up from £210m a year earlier.