India car sales beat global slump

Sales were up at the majority of carmakers

Sales of passenger cars in India have risen for the first time in five months, but analysts say it is too early to see recovery in the sector.

Sales jumped 22% in February, compared with the same month in 2008, the Society of Indian Automobile Manufacturers said.

Experts said the spurt was driven by easing bank credit after lenders cut auto-loan rates from about 13% to 10%.

However, sales of commercial vehicles fell by more than 50%.

Analysts said the two factors which had the most impact on February's figures - lower auto-loan rates and government tax cuts - would not necessarily lead to a long-term recovery.

'Sequential spurt'

Ten out of 13 carmakers in India saw a rise in sales during February.

Maruti Suzuki, the country's largest carmaker, said it had been a record month both for sales and exports.

Vaishali Jajoo, auto analyst at Angel Broking in Mumbai, said Maruti Suzuki's exports were helped by a growing appetite in Europe for small, fuel-efficient cars.

However, Ms Jajoo was cautious about how long the growth would last.

"Turnaround is a strong word. Sequential spurt would be better," she said.

The rise in vehicle sales in India contrasts with a slump in demand for cars in Europe, the US and Japan.

But India's carmakers were keen to play down the significance of February's figures.

Last week, Hyundai Motor India announced a 45% rise in domestic sales in February, and an 18% increase in exports.

"The overall market situation continues to be challenging and not much should be read into the February growth," Hyundai spokesman Arvind Saxena said.

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