India Trade Group Raises Car Outlook as Sales Surge

Sales of passenger vehicles in India are back on track to expand as much as 12% in the fiscal year ending March 31, the Society of Indian Automobile Manufacturers says.

SIAM reports that new-car sales grew 10% to 177,800 vehicles last month, matching growth in July. Demand for SUVs soared 47% to 65,700 units.

In June the trade group cut its growth forecast from 12% to 6% because of worries about tax increases and a ban on diesel sales in the New Delhi region. But now the group predicts India’s upcoming festival season will spur demand in both urban and rural markets.

SIAM also notes that India’s Supreme Court ruled in August that carmakers may resume diesel sales as long as they pay a 1% “green” tax.