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Passenger car sales up 14.7% in August

India's cut-throat car market showed strong recovery as sales surged nearly 15 per cent in August, boosted by price reductions and discounts, but analysts saw the pace slowing in the months ahead.

Passenger car sales in August climbed for the third straight month, rising to 49,844 units from 43,457 units in the same month last year, figures from the Society of Indian Automobile Manufacturers showed on Friday.

Between April and August, car sales were marginally up at 208,041 units from 207,534 in the same year-ago period.

India's financial year runs from April to March.

Analysts said August sales were lifted by a sharp price cut of up to 9 per cent on India's biggest-selling car, the Maruti 800, and discounts offered on some other compact cars.

"I'm surprised and not so certain that this growth can be sustained. Over the full year I don't expect any big sales jump, it could be flattish or maybe up to two per cent," Pramod Amthe, a Bombay-based analyst at Cholamandalam Securities, told Reuters.

The Maruti 800, a small, low-priced car made by the Indian unit of Suzuki, the car market leader, accounts for nearly a quarter of India's nearly 600,000-a-year new car sales.

India's new car sales inched up a mere 0.48 per cent in the past year to March 570,473 as slowing industry growth, flat exports and fears of war with Pakistan hit consumer sentiment.

The data also showed sales of commercial vehicles, or trucks and buses combined, jumped 21.3 per cent to 14,490 units in August, from 11,942 in the same month in 2001. Sales in April-August climbed 33 per cent to 66,832 units from 50,328 in the same period last year.

Analysts say the sharp increase in truck sales this year has been driven by a need to replace an ageing transport fleet and to move materials to feed a spurt in housing construction and expressway building.

Motorcycle sales roared ahead by 37.5 per cent to 288,935 units in August from 210,130 units in the same month a year ago, continuing a trend seen over nearly two years.

India's motorbike market, the world's largest after China, vaulted 37 per cent last year, helped by falling prices, rising incomes, cheaper financing and a shift in consumer preference to fuel-efficient bikes from scooters.

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