Luxury car brand Bentley will break even within three years, chief executive Tony Gott has told The Times newspaper.

The Volkswagen-owned company, which was bought in 1998 for £47m, is incurring losses while £700m is being invested in a new mid-size model to be launched in 2003 and on upgrading the Crewe production facility.

At the moment, both Rolls Royce and Bentley are manufactured at Crew, but Mr Gott said that a hard line would be taken in separating the brands when BMW takes over Rolls Royce at the end of 2002.

Separation of the two brands means that the Rolls Royce-Bentley distribution network will have to be split.