CARS ON SKIDS; Banger bonus fails to get sales back on track.

Byline: CLINTON MANNING; GRAHAM HISCOTT

NEW car sales slumped by 25% last month despite the launch of the government's banger bonus scheme.

About 135,000 motors were registered in May, almost 44,500 fewer than this time last year.

Crisis-hit dealers are pinning hopes on the new scrappage scheme, launched in mid-May, which pays owners pounds 2,000 to trade in 10-year-old motors. The pounds 300million plan has triggered 35,000 orders, the Society of Motor Manufacturers and Traders revealed yesterday.

Without those, May's figures would have been even worse.

The industry is holding its breath to see if the boost is short-lived or kick-starts a much-needed stampede to showrooms.

A global slump in new car sales has decimated the car industry.

Thousands of Vauxhall workers fear for their jobs as bankrupt owner General Motors tries to flog its UK arm.

Elsewhere, Jaguar Land Rover and Ford have hit the skids.

Toyota, the world's top car maker, has made its first annual loss in more than 50 years.

But GM marques were some of the biggest victims of falling sales, the SMMT figures showed.

Vauxhall suffered a 40% slump in registrations last month, its Saab division sold 63% fewer cars, while just one gas-guzzlinHummer was bought in May.

Aston Martin sales fell by a third and Bentley by more than half as the rich reined in spending.

One category doing better than most is superminis.

Almost half of those using the scrappage scheme bought cars worth pounds 6,000 to pounds 8,000, with two-thirds having 1 to 1.3l engines. The SMMT's Paul Everitt said: "The motor industry is still facing a difficult climate.

"We have seen an encouraging start to the scrappage scheme, but it will take time for orders to feed into registrations."