India car sales up 21% to 161,497 units in November

Local car sales in India rose 21% from a year earlier in November, as people continued to buy new vehicles from the likes of Maruti Suzuki India Ltd., Hyundai Motor Co., Ford Motor Co. and Volkswagen AG.

Sales in the past month climbed to 161,497 cars from 133,703 a year earlier, industry lobby group the Society of Indian Automobile Manufacturers said in data issued Wednesday.

The car sales figure in November lagged October sales of 182,992 cars, which was the highest-ever sales for a month, when the onset of several festivals boosted demand.

The pace in car sales growth has picked up this financial year in India, helped mainly by rising incomes for the country's estimated 300 million middle class, lower borrowing costs and the introduction of new cars, especially hatchbacks by Ford, Volkswagen, Nissan and Hyundai.

However, increasing metal prices and rising loan rates are beginning to put pressure on auto makers in India, forcing some to announce plans to raise vehicle prices in January.

"December sales will be lower than November," Sugato Sen, senior director at SIAM, told reporters. He said, however, that "fundamentals are still positive and there is no threat as such to auto sales from the fundamental point of view."

Local car sales at Maruti Suzuki, the local unit of Suzuki Motor Corp. and India's largest car maker by sales, gained 29% to 87,618 autos. The company produces eight small car models, including the Swift, A-Star and Alto.

Hyundai's local unit--the second-ranked car maker in India--sold 31,501 cars, up 12% from the year earlier. Car sales at Tata Motors Ltd., however, slumped 34% to 12,234 cars.

Sales at Volkswagen, which sells the Polo small car and Jetta sedan, jumped to 4,612 cars in November from 180 a year earlier. Ford, maker of the Figo hatchback, sold 7,305 cars, up from 2,164 a year earlier.

Mr. Sen said a drastic fall in demand for cars is unlikely as "liquidity, easy availability of finance, availability of products will [continue to] drive growth."