CAR giant Ford yesterday became the latest motor manufacturer to slash the prices of its new models in a bid to win back customers.

The company said cuts in recommended retail prices would range from 5% to 13.1%, slashing almost #2000 on some vehicles.

The move follows weekend reports which suggested Ford was poised to reduce prices because consumers were not being attracted by cashback and insurance deals during Britain's key car sales month of August.

Trade and Industry Secretary Stephen Byers welcomed the price cuts as a ''victory for the consumer'', while campaign groups said other leading manufacturers were now expected to follow suit.

Already makers such as Audi, Saab, Honda, BMW, Jaguar, Mercedes, and Volvo have announced cuts on some of their new models.

It remains to be seen if other manufacturers, such as Ford's main rival Vauxhall, will now join the price war. But a Vauxhall spokesman yesterday appeared to dismiss this idea.

Consumers across the UK have been turning their backs on conventional dealers in droves in favour of cheap imports - through Internet-based importers or European dealerships. Car prices have been under pressure throughout the western world for months, as producers respond to fierce competition and peaking demand.

Under the cuts announced by Ford, which take effect immediately, the 1.7 Puma will be reduced by #1960 to #12,995, while the Ford Focus - the country's best selling car - will be #1505 cheaper at #11,995.

Delivery charges on all new Ford cars will now be included in the RRP instead of being listed as a separate item.

A three-year warranty will be backdated to September 1, and Ford said it would reimburse the difference to anyone who bought a Ford car last month which was more expensive than the new prices announced yesterday, taking into account any cashback.

Ford managing director Ian McAllister said the new measures would build on previous offers.

He said: ''At the same time they establish clarity and stability for the new car buyer. We believe this package of innovative, customer-focused initiatives means that Ford customers can benefit from transparency of pricing, buy with confidence and enjoy unprecedented ease of purchase.''

Details of the price cuts were announced after being given to a meeting of UK Ford dealers.

The company added that a new on-line service was to be launched, enabling customers to buy the company's cars over the Internet. Details will be announced at the Motor Show in Birmingham later this month.

Pressure has been building on car makers to cut prices following a Competition Commission report in the summer that said cars were overpriced by 10% in the UK.

The Consumers' Association said Ford had been forced into fairer deals by pressure from consumers.

''Now Ford has caved in we expect to see other car manufacturers follow suit,'' said director Sheila McKechnie.

The price of new cars in August was down almost 6% compared to a year earlier, a report showed last week. Japanese car group Honda cut its prices by an average of 9% last month. Earlier this year Audi cut 14% off two models and 10% off another 28; Mercedes has slashed between #9940 and #14,600 off some of its models and Volvo instigated an average cut of 10% on some of its cars.

BMW, despite three weeks ago saying it did not need to cut prices, has now cut them to 1993 levels.

q Workers at the main UK factory of Korean car giant Daewoo were told yesterday that the company still did not have enough money to pay their salaries this month. The 750 employees at Daewoo's technical centre in Worthing, West Sussex received letters last week saying that it had no cash to pay October's wages.