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Signalling revival in demand, domestic car sales grew for the third month in succession in July with a rise of 5.04%, prompting industry body SIAM to hope for 5-10% increase this fiscal.
According to the data released by Society of Indian Automobile Manufacturers (SIAM), domestic passenger car sales stood at 1,37,873 units in July this year as compared to 1,31,257 units in the same month of 2013.
"The negative sentiments have gone. People are coming back to showrooms. As the economy revives we are going to see higher growth in the coming months," SIAM Director General Vishnu Mathur told reporters here.
He added: "With a lot of new models lined up for launches ahead of the festive season, we are hoping that there will be at least single digit growth this year."
While he declined to give an exact forecast for car sales growth, Mathur said: "In the first quarter of this fiscal we have grown by 2.89%. If the trend continues we hope that we could end the year with a growth of anything between 5 and 10%."
Giving credit to the new government, he said: "The very fact that there is a stable government at Centre has improved consumer sentiment. Besides, the reduced excise duty rates on cars have been extended and also income tax rate has also been reduced to an extent which has put more money in the pockets of consumers. All these have helped revive demand to an extent."
During the month, market leader Maruti Suzuki India posted a growth of 15.45% in domestic sales at 72,782 units as against 63,040 units in the same month last year.
Rival Hyundai Motor India Ltd had a growth of 12% at 29,067 units as against 25,939 units in July last year.
Honda Cars India saw its sales jump 10.77% to 12,286 units in July from 11,091 units in the year-ago month.
Home-grown Tata Motors posted a decline of 21.56% in domestic car sales in July to 6,703 units as compared to 8,546 units in the same month last year.
Utility vehicles (UV) major Mahindra & Mahindra saw its UV sales decline 1.06% to 14,348 units as against 14,503 units last year.
Car sales in India had fallen for the second consecutive fiscal in 2013-14 with a drop of 4.65% as the auto industry continued to struggle with demand slump due to a sluggish economy.
In the two-wheeler segment, total sales in July 2014 grew 13.73% to 12,87,462 units from 11,32,066 units in the same period of previous year.
