'At present 360 car salesmen are being laid off, and the cuts to employees will extend to anyone from top to bottom management,' he said. Related industries - insurance, car accessories, and tyre and battery retailers - would also be greatly affected.

Crown Motors had decided to reduce its staff by 200 and CITIC Pacific's Dah Chong Hong, Angur Group and Sime Darby's Universal Motors by a total of 160.

Mr Rushworth said the Opel-Saab dealer Angur Group, a listed company, had to sack employees after losing $48 million last year.

He said it would be difficult for people in the car industry to find jobs elsewhere because the job market had tightened and the unemployment rate was not declining. Mr Rushworth said the number of employees in the trade was always in proportion with sales.

'Where there is a sales decrease, there is a cut in staff,' he said.

'It is a natural part of the business cycle.' He said car sales figures from January to April slumped 20 per cent from 11,434 cars year-on-year in 1994 to 8,000.

An average fall of 37 per cent was expected by the end of this year.

The Government planned to increase First Registration Tax (FRT) for new private cars - a move expected to reduce the number of cars on the roads by 18,000 each year.

The traders' association said the tax increase would send the car population from 289,901 in 1995 to 274,830 in 1996, and to 261,859 in 1997.

Older cars would be scrapped at a rate of 21,519 in 1995, 28,071 in 1996, and 33,971 in 1997.

'For the sake of future jobs in the motor industry, the government should drop plans to increase FRT,' he said.

'The Government should put its resources into finding solutions to traffic problems throughout the territory.'