Fiat Chrysler Automobiles plans to invest about 2.36 billion zlotys ($773 million) to upgrade its factory in southern Poland where it plans to start the production of a new Fiat model, the Polish government said.

Fiat badly needs a successor for the aging Punto subcompact, the brand’s entry in Europe’s largest segment by unit sales. Fiat’s plant in Tychy, Poland, will build the model’s successor, a longer and wider version of the 500 three-door minicar that is built in Tychy and could be named the 500 Plus, sources said earlier this month.

In an official statement on Tuesday, the Polish government said the carmaker will hire 420 new employees on top of the current 3,000 in Poland. About 96 percent of the vehicles from the new production line will be exported, including to North America, it said. The investment should be made by the end of 2017, it added.

However, Fiat distanced itself from the statement and said that the details of its Polish investment were “assumptions that at this moment have not yet been firmed up in the company’s business strategies.”

“The information on investment plans that will be implemented in individual countries will be announced at the appropriate time along with the industrial choices that the company decides to take,” Fiat said.