By Salil Panchal ,AFP
MUMBAI — New car sales in India climbed 13.1 percent year-on-year in February as the sector showed more signs of recovery from its slump in 2011, an industry body said on Monday. The Society of Indian Automobile Manufacturers (SIAM) said domestic passenger car sales rose to 211,402 last month from 186,890 at the same point in 2011.
The data marked a fourth straight monthly gain for the sector. Discounts from auto makers, new car launches and improved demand for diesel vehicles have helped the industry bounce back from last year’s downturn. “Passenger car sales growth is improving but the real push will come when the Reserve Bank of India starts to cut interest rates,” SIAM’s senior director Sugato Sen, told AFP. Analysts widely expect the central bank to start lowering interest rates from April with inflationary pressures easing. India, which has been one of the world’s fastest-growing car markets, saw sales fall last year as many buyers delayed purchases or cancelled them due to costly auto loans and rising fuel costs. The Reserve Bank hiked interest rates 13 times before putting them on hold late last year. Demand for cars has picked up since October, when sales plummeted 24.0 percent year-on-year — the biggest dive in more than a decade. Earlier this month, auto makers Maruti Suzuki India, Hyundai Motor and Tata Motors all reported a rise in car sales for February. Sales of trucks and buses — a key indicator of economic activity — rose 18.7 percent to 76,891 units from 64,775 in the year-ago period, SIAM said. Part of February’s rise reflected a rush by Indian consumers to buy cars ahead of the budget due later this week, on concerns that prices of cars, particularly diesel, might rise, analysts said. Diesel cars constitute nearly 40 percent of India’s car market. Analysts expect car sales to keep improving in the coming months. SIAM has forecast car sales will grow 11 percent to 13 percent in 2012-13 but expects flat growth for the current financial year ending on March 31. India, a country of 1.2 billion people, remains a hotspot for global automakers thanks to its stronger expansion compared with sluggish Western economies. Car ownership remains low in India where the growing economy is minting new middle-class families each year.