NEW DELHI -- Monthly car sales in India hit an all-time high in July, racing ahead of the previous record in March, as new models and rising disposable income encouraged consumers to buy vehicles.
Local sales totaled 158,764 cars in July, up 38% from the 115,084 recorded a year earlier, according to data issued Monday by the Society of Indian Automobile Manufacturers. In March, auto makers had sold 155,600 units in India.
"The growth in the car market is helped by the sustained effort of auto companies to tap the rural market," said Vishnu Mathur, director-general of the society.
Just 12 people on an average among 1,000 Indians own a car or utility vehicle, while the percentage of vehicle owners is much smaller in rural areas. This growth potential amid rising income levels in the second-fastest-growing major economy is encouraging auto makers to launch new models, especially of small cars as most local buyers prefer them because of low price and running cost.
A key reason for higher car sales has been easy availability of loans at low interest rates. However, double-digit inflation has forced India's central bank to raise lending rates by 1.0 percentage point since March, including a quarter-percentage-point hike late July, which could make loans more expensive.
However, Mr. Mathur said the recent round of rate hike has been modest and unlikely to hit sales in the near-term.
Meanwhile, the growth in car sales is likely to overtake the society's projection of 12%-13% in the current fiscal year through March. "We are looking at our growth projections and may revise them upward in the next few months," Mr. Mathur said.
Sales may set new records in October and November, spurred by a number of Hindu and Muslim festivals, considered auspicious to acquire assets.
"New car models will continue to expand the market, with sales likely to be strong in September too" as the festival season starts during the month, said Surjit Arora, an analyst at Mumbai-based brokerage Prabhudas Lilladher Pvt. Ltd.
Local sales at Maruti Suzuki India Ltd. rose 27% to 76,111 cars in July.
The Indian unit of Suzuki Motor Corp. makes eight small-car models, including the Alto, Swift, WagonR, Ritz and Estilo. It launched a variant of the Alto with a 1.0-liter engine last week to retain the company's leadership in the Indian car market as new entrants challenge its dominance.
The local unit of Ford Motor Co. posted a more-than-fourfold rise in its July sales to 8,473 cars from 2,081 a year earlier. The company introduced the Figo, its first small car in India, in March.
Nissan Motor Co. sold 955 cars in the local market, up from just 17 a year earlier. Sales were helped mainly by its new small car, Micra, which was introduced in July.
The Indian unit of Hyundai Motor Co. sold 28,811 cars, up 24% from a year earlier, while sales at Tata Motors Ltd. grew 69% to 24,613 units.
Sales of commercial vehicle and two-wheelers also recorded strong gains during the past month, data from the society showed.
Local truck and bus sales grew 37% to 51,481, helped by strong performances from market leader Tata Motors, second ranked Ashok Leyland Ltd. and Mahindra & Mahindra Ltd.
Truck and bus sales at Tata Motors rose 30% in July to 30,827 vehicles, while those of Ashok Leyland grew 69% to 6,022 vehicles.
In the motorcycle segment, sales rose 30% to 710,621 units as Hero Honda Motors Ltd., Bajaj Auto Ltd. and TVS Motor Co. reported higher sales.
Scooter sales increased 36% to 167,195 units with Honda Motorcycle and Scooter India Pvt. Ltd. and Suzuki Motorcycle India Pvt. Ltd. posting gains.
Overall, vehicle exports in July soared 42% to 198,368 units.
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