Ford's UK operation plunged deeper into the red last year after being hit by huge restructuring costs, while new car sales slid by more than three per cent, it emerged yesterday.

The Brentwood firm said it sold 374,342 new cars last year - 13,643 less than the previous year - after being hit by tough competition and falling new car prices.

Losses at the firm, owned by the US Ford group, widened to £636m, compared with a loss of £119m in 1999.

Figures were hit by a £345m charge which included costs following its decision to halt production of the Ford Fiesta at its Dagenham plant, in Essex, next year.

Losses also reflected one-off costs for the launch of its new Ford Transit model.

But chairman Ian McAllister said: "While the outlook for 2001 is that the market will remain extremely competitive, I am upbeat about our prospects."

Ford, which announced 2,500 job cuts last year, is hoping to be profitable next year.