India auto sales climb 7.2% in January

The Society of Indian Automobile Manufacturers (SIAM) said domestic passenger car sales increased to 196,013 last month from 182,852 in the same month in 2011.

The data marked a third straight monthly gain for the sector. Discounts from auto manufacturers, new car launches and improved demand for diesel vehicles have helped the industry bounce back from a downturn last year.

India, which has been one of the world's fastest-growing car markets, saw sales fall as many buyers deferred purchases or cancelled them due to costly auto loans and rising fuel costs.

However, demand has picked up since October when sales plummeted by 24.0% year-on-year, the biggest dive in more than a decade.

Sales of trucks and buses, a key indicator of economic activity, rose by nearly 14.0% to 69,859 units from 61,537 units in the year-ago period, SIAM said.

Analysts expect car sales to keep improving in the coming months, with India's central bank expected to start lowering interest rates as inflation shows signs of moderating.

SIAM forecasts car sales will grow between 11.0 and 13.0% in 2012-2013, well above the zero to 2.0% growth it expects for the current fiscal year ending on March 31.

India's biggest auto maker Maruti Suzuki reported earlier this month that sales in January rose for the first time in eight months, while rival carmakers have continued to show a steady pace of growth.

Source: AFP