Car sales in India jump 18 percent

Car sales in India increased 18 percent in August from a year ago, helped by the success of new models and dealers' expectation that demand would remain robust in the upcoming festival season.

Domestic car sales totaled 98,893 units in August compared with 83,864 units in the same month a year earlier, the Society of Indian Automobile Manufacturers said Tuesday.

The stronger-than-expected numbers are a reversal of the trend seen in earlier months, when car sales were hit by rising interest rates and growth slowed.

In the April-July period, the first four months of the current fiscal year, sales rose about 12 percent from a year ago, compared with 22 percent growth the year ended March 2007.

The Society of Indian Automobile Manufacturers didn't give any reason for the acceleration in August, but a scrutiny of the sales figures showed the growth was driven by new models, most of which have done well.

Maruti Udyog Ltd., which is majority-owned by Japan's Suzuki Motor Corp., began selling the SX4 sedan in May, just weeks after France's Renault SA introduced its low-cost Logan in India through a joint venture with local automaker Mahindra & Mahindra Ltd.

Sales of both models have steadily increased in successive months.

In April, General Motors introduced the Chevrolet Spark, an entry-level compact, to boost its presence in India, where the market is dominated by small cars. The Spark has helped the U.S. automaker's recent sales in India double from a year ago.

Also lifting the sales figures were expectations for strong demand during the Hindu festival season starting next month. Dealers typically place larger orders with manufacturers in August and September to build up inventory ahead of the season, which Indians consider an auspicious time to buy assets.

Sales numbers released by the trade body represent deliveries made to dealers in that month. Sales to consumers may be higher or lower.

India's current car sales are lower than China's but are growing faster. Car sales totaled 1.1 million units last year.