Vauxhall is poised to go head-to-head in a price war with Suzuki when the manufacturers launch their microcars, the Vauxhall Agila and Suzuki Wagon R+ which are the result of the first joint venture since the US and Japanese groups formed a business alliance.

According to Vauxhall insiders, the 1-litre entry level Agila will be priced close to £6,500, about the same as the basic Wagon R.

Agila goes on sale in June with 1.0 and 1.2-litre engines. Mr Reilly's primary concern is that Agila does not harm sales of Corsa which starts at around £6,800. He has not yet decided whether to take the 1.4 model. “We haven't brought a car out just to steal sales away from an existing model,” Mr Reilly said.

“Even so,” he added, “Agila is a completely different vehicle from Corsa and is somewhere between a niche and a main product.”

Never likely to be a main volume seller in the UK, according to Mr Reilly, he expects “a few thousand” sales, though he predicts it “will be far stronger in the southern countries like Spain and Italy”.

Of greater significance to Vauxhall's image is the launch of the VX220. It will be badged Speedster elsewhere in Europe but the name was felt to be inappropriate in the UK in view of the Department of Transport campaign to reduce speeds.