NEW DELHI - India's domestic passenger car sales surged 18.1 percent in July, as robust economic growth, cheap finance deals and discounts continued to power demand in Asia's fourth largest economy, industry data showed on Friday.
The Society of Indian Automobile Manufacturers (SIAM) said in a statement that sales of 11 carmakers rose to 70,589 units in July, up from 59,784 in the same month a year ago.
Sales in April-July, the first four months of the business year, rose 20.5 percent to 252,525 units from 209,508 a year ago.
"The sentiment for the future has turned slightly adverse owing to concerns over inflation, oil prices and GDP growth. But the car industry should still end the year with 10-12 percent growth," said Umesh Karne, analyst at brokerage Sushil Finance.
Annual wholesale price inflation in India hit a 3-½ year high in the week ended July 31 to 7.61 percent, adding to fears of a potential interest rate rise in the near term.
Economic growth in 2004-2005 also is expected to slow from the previous year's 8.2 percent on forecast of flat farm output.
India's domestic car sales surged 28.6 percent in the 2003-2004 business year after averaging flat growth in the past three years. A tax cut in 2003 helped automakers lower prices by more than 5 percent in the price-sensitive market.
New model launches and discounts and freebies offered by automakers in a hotly competitive market helped boost sales. Nearly 90 percent of new cars bought use vehicle financing.
SIAM's data showed sales of market leader Maruti Udyog Ltd., 54.2 percent owned by Japan's Suzuki Motor Corp., rose 10.8 percent in the month to 34,722 units.
Maruti has a dominant 51.4 percent share of India's market helped by its small, low-priced cars.
Domestic car sales of second-ranked Hyundai Motor jumped 16.4 percent in the month to 12,958 units, while No. 3 Tata Motors Ltd, reported a 32.2 percent rise.
India's car industry is forecast to expand by at least 10 percent annually this decade, aided by rising incomes and lower ownership levels that have attracted several global firms.
Only eight of every 1,000 citizens own a car in India, compared with 35 in Thailand and 450 in the developed world.