Toyota has begun production of the Auris at its factory in Burnastone, Derbyshire, after reporting strong financial results.
The company described its new hatchback as a "strategically important" model for its European business, despite falling demand across the region.
It follows investment of around £185m by the Japanese car maker in its UK manufacturing and supply chain, resulting in 800 new jobs.
The president and chief executive of Toyota Motor Europe, Didier Leroy, said the company was committed to the UK.
"The new Auris is at the heart of our European strategy and we expect it to strengthen our sales performance in the family car market,” he said.
"Our Toyota Motor UK members at Burnaston and at the Deeside engine plant continue to demonstrate they can deliver the superior quality and efficiency that are vital for building our presence in a highly competitive marketplace."
While Business Secretary Vince Cable described the start of production as a "significant milestone" in Toyota's 20-year history in the UK.
It comes after the company reported a net profit of 257.9bn yen (£2bn) for the three months to the end of September.
But it revised down the total number of vehicles it expected to sell this financial year to 8.75 million vehicles.
This is 50,000 fewer than it predicted in August because of "uncertainties in the Chinese and European market environments".
Official figures last month showed new car sales across Europe had fall at their fastest pace in 12 months as Government cuts hit consumer spending.
Toyota has also been caught up in an ongoing territorial dispute between Japan and China which has led to a boycott of Japanese cars in recent months.
As such, its sales in China dropped to around half of last year's levels in September to 44,100 vehicles.
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