Indian auto makers see up to 30% rise in August sales

Sales at top Indian automakers rose 20% to 30% in August, as analysts expected continued growth driven by strong demand in the festive months ahead but cautioned the rate of growth would slow against high comparisons and a possible rise in interest rates.

Maruti Suzuki, India's leading car maker which is 54.2% owned by Japan's Suzuki Motor Corp posted a 24% rise in August sales and the company said that local sales in August were its highest ever monthly sales.

Ms Vaishali Jajoo senior auto analyst with Angel Broking said that "The second half of the year is a better period for the auto sales due to the festive season.” She added that "Looking at the festive seasons coming in, dealers start stocking up. We can see that in the next month as well. The economy has also picked up and normal monsoon will also have a positive impact on rural sales.”

TATA Motors Ltd, India's leading maker of trucks and buses said that auto sales in the domestic market jumped 32% in August to 65,938 units.

Mahindra and Mahindra, India's top utility vehicles and tractors maker also reported a 29% jump in August vehicle sales.

While India auto sales are expected to rise further, that kind of growth is not sustainable when compared to the robust growth witnessed last year.

India has raised interest rates four times since mid March to clamp down on inflationary pressures and there are concerns the central bank may lift rates again to curb price pressures.

Ms Jajoo said that "I think the interest rate hikes have still not impacted because, for one thing, the economic growth is higher, the consumer confidence has increased. Maybe if it increases by another 100 basis points, we can see the actual impact on financing and volumes."

Demand for cars is growing rapidly in India, which is Asia's third largest economy and is slated to grow 8.5% this fiscal year.