Jari-Matti Latvala has admitted his title chances look rather bleak following his retirement from day two of Rally Mexico.

Latvala had been running second and was pushing hard to close the 13.7 seconds gap to rally leader and Volkswagen team-mate, Sebastien Ogier. However in SS12 - the second test of the day, the long 41.86 km Otates 1 test - the Finn hit a bank and ripped off the left-rear wheel.

The error came after he also went off in Sweden last month, potentially now leaving him more than 50 points behind Ogier, the Frenchman looking good to take his third win of the year.

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Asked about his championship hopes, Latvala told the official WRC site that it "looked bad".

"So I am going to forget the championship, concentrate rally-by-rally and see where we are at the end of the year. That is the only thing I can do." he continued.

"But I say nobody can do 13 rounds perfectly. Okay, for sure Ogier is dominating and he will be very strong but let's wait and see what happens on this rally first.

"You never know what can happen."

Meanwhile, Latvala defended his decision to push.

"If you want to win, you have to put the leader under pressure," he added. "But I knew that I couldn't risk everything.

"I had a good rhythm on the twelfth stage. There was a pothole on the inside of a bend and I came off the line slightly to avoid it, and I ended up on loose ground in this really narrow section. I hit a bank with the rear left of the car and damaged my suspension.

WI had hoped that we would be able to repair it at the end of the stage, but unfortunately there was nothing we could do."

Writing on his Facebook page later, Latvala added that the incident was a "huge disappointment", although he noted that while he may have "lost the fight... the battle still continues".

"Things didn't work out as we thought and we had to retire. We were fighting hard to catch Sebastien and the battle was really close but we did a mistake...

"So, it is a huge disappointment for Miikka [Anttila - my co-driver] and I. We lost the fight but the battle still continues," he concluded.

Latvala will now re-start on Sunday under Rally 2, albeit down in 17th place and more than 20 minutes off breaking into the top-ten.