Business leaders today welcomed the creation of 350 new car manufacturing jobs in Sussex.

The luxury car manufacturer confirmed last night it is to build its new headquarters at Goodwood, just outside Chichester. The site is less than ten miles from West Wittering, where the firm's co-founder, Sir Henry Royce, lived and worked until his death in 1933. The new plant will build around 1,000 cars a year, including the new Rolls-Royce model to be launched in 2003.

The Duke of Richmond, who owns the Goodwood estate and is father of the Earl of March, said: "This is a highly-prestigious development for the county. As a member of the West Sussex Economic Forum, I welcome the decision by Rolls-Royce to bring the assembly of the world's most famous car to Chichester."

The news was warmly-welcomed by politicians and business leaders. Chichester MP Andrew Tyre said: "Chichester is one of the finest cities in the country and soon it will be making one of the finest cars."

The announcement was particularly welcomed in a city which has been hit by more than 500 job losses during the last 12 months with the closure of several factories. The Mayor of Chichester, councillor Peggy Frost said: "If it's going to mean secure jobs for this area, it is excellent news. If a plant is put in the right place and is operating in the right way then I'm all for it."

Coun Mike Hall, who represents Chichester East, was delighted with the news and said he hoped it marked a turnaround in the area's fortunes. He said: "It's also fitting considering the area's connections with the company's founder. It's as if Rolls-Royce is coming home."

Goodwood was chosen ahead of alternative locations including Cowley near Oxford, Derby, and a site in the M40 area west of London Rolls-Royce and Bentley cars are currently produced at Crewe in Cheshire under the ownership of BMW's German rival, Volkswagen.