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India car sales hit monthly record

Car sales in India hit a record monthly high in August, industry data showed, as consumers flocked to showrooms in a booming auto market flooded with new models and cheap loans.

Sales of cars are likely to remain strong in the ongoing festive season as the fast-expanding industrial sector boosts incomes and farm output in rural areas picks up after a strong monsoon.

Sales of passenger cars jumped 33.2 percent in August from a year earlier, reaching 160,794 units, data from the Society of Indian Automobile Manufacturers (SIAM) showed.

Sales of trucks and buses grew 28 percent to 52,030 units.

"We are going to exceed the projections (for this financial year)," said Vishnu Mathur, SIAM's director-general, referring to a previous forecast for annual growth of 12-13 percent in the year to March.

"We have so far grown much higher than the forecast."

India is fast turning into a major battleground for global vehicle manufacturers such as Ford, Renault-Nissan, General Motors and Volkswagen, which have each launched new models in the country.

The market, Asia's third biggest, is projected to triple over the next decade to six million cars a year from the current two million, according to industry estimates.

Sales are still dominated by Japanese-owned Maruti Suzuki, which has over 60-percent market share.

The group announced a 23.5 percent jump in sales to 104,791 cars in August, up from 84,808 in the same month a year ago.

Analysts forecast passenger car sales to remain strong in coming months and years, with the numbers of cars per capita among the lowest in any major automobile market.

"The festive season demand will be strong, due to the rural India pick-up," said Vaishali Jajoo, analyst with Angel Broking.

Jajoo expects India's auto sales to grow by 16 percent in the 12 months to March 2011, from an earlier estimate of 15 percent.

Asia's third-largest economy grew by 7.4 percent in the financial year ended March 2010 and is forecast to grow by at least 8.5 percent this year.