Indian May auto sales rise; Maruti posts record

Indian automakers reported robust sales growth in May, with Maruti Suzuki posting a record for monthly sales, as a rapidly expanding economy pulled buyers into showrooms despite price increases.

China and India have been bright spots for global automakers amid a sharp industry downturn, and vehicle sales in India are expected to reach a new high for the second year in 2010/11 though the market is much smaller than China's.

Maruti, the country's leading car maker that is 54 percent owned by Japan's Suzuki Motor Corp, said it sold 102,175 vehicles in May, the most for any month and up 28 percent from a year earlier.

The news helped its shares climb 1.8 percent in a weak Mumbai market that fell 2.2 percent.

Hyundai Motor Co Ltd's Indian unit, which is Maruti's closest competitor in the domestic market, sold 46,808 units in May including exports, an annual increase of 7 percent.

"Over all there is no issue on the demand front. Auto sector is linked to the economy, and as the economy has picked up, total auto volumes have to come up," said Vaishali Jajoo, a sector analyst with Angel Broking.

India's manufacturing sector expanded at its fastest rate in over two years in May, bolstered by steady growth in output, new orders and employment, a survey showed, in another sign the country's economy is surging.