Vauxhall is facing continued losses this year because of pricing pressures, the strength of sterling and weak demand for ageing models, according to its chairman.

Nick Reilly told today's FT that said it would be "extremely challenging" for the carmaker to return to profit this year after incurring sizeable losses in 2000.

Vauxhall, which is due to publish figures shortly, is thought to have lost £160m-£190m last year after incurring restructuring charges of about £200m for the closure of its Luton car assembly operations.

"We have a significant charge in the 2000 accounts and we started this year operating in the red, partly due to the carrying cost of winding down production at Luton," Mr Reilly is quoted as saying.