Indian passenger car sales soared by 30 percent in the past year, the most in over a decade, but surging raw material costs will put the brakes on further growth, an industry body said Friday.

Car sales grew to 1.98 million units in the just-ended fiscal year to March 2011 from 1.53 million the previous year, spurred by cheap loans and new model launches, the Society of Indian Automobile Manufacturers (SIAM) said.

"We have ended the year on a reasonably high note. We have reached a very strong base," SIAM president Pawan Goenka told reporters.

India is the second-fastest growing auto market in the world after China.

But Goenka said growth would slow to 16 or 18 percent this year due to rising commodity prices and costlier loans resulting from a tighter monetary policy aimed at curbing inflation.

The percentage gain in car sales in the year to March 2011 was the highest since 2000 when car sales soared 60 percent, SIAM said.

The sustained expansion of the Indian market in the face of saturated markets in the West has turned the country into a battleground for global vehicle manufacturers.

Ford, Renault-Nissan, General Motors and Volkswagen have all launched new models in India recently.

Sales of Japanese-controlled Maruti Suzuki, India's car market leader, jumped by 26.24 percent to 966,447 units last year from a year earlier, while sales of rival South Korea's Hyundai Motor increased by 13.95 percent to 358,904 units.

In March, passenger car sales in Asia's third-largest economy climbed by 24.37 percent to 194,199 units from the same month a year earlier, SIAM said.

Sales of commercial vehicles - seen as an important barometer of economic health - climbed by 15.35 percent to 77,688 units from a year ago, the auto group said.

Total sales of vehicles across categories grew by 19.42 percent in March to 1,465,909 units from the same month a year earlier.



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