Sales of Rover cars slumped again last month, giving Britain's last independent volume carmaker a 3.5% share of Britain's booming auto market so far this year.

The society of motor manufacturers and traders said yesterday that the market was still on course for a record 2.6m of sales this year despite a 2.8% slip in May.

This would be the fourth year in a row for record sales.

Rover, which has put off the launch of its new medium-sized car until the end of next year, says it will not break even until 2006. The firm saw sales fall 26% last month to 3,908, giving it a market share of 2%.

The group's upmarket MG brand experienced a 10% fall in sales to 3,036, or a market share of 1.56%. This year MG sales have been flat at under 15,000 while Rover has suffered a 10% fall to 23,629.

Rover had a market share of just 3.4% in the first five months of the year when 4% has always been seen as guaranteeing its survival. Its Malaysian partner Proton has seen a 24% slump in British sales to just 806 in five months.

Sales have been hit by reports that the four founder directors, who bought the group from BMW for £10 four years ago, have enriched themselves while the car company has been deprived of investment.