Analysts remain cautious over whether recent sales rises in the key emerging auto markets of China and India signal the start of a sustained recovery after volumes plunged in the second half of last year due to the global credit crunch.

Incentives recently rolled out by governments in both countries have reversed the downward trend, helping year on year sales in February jump almost 22% in India and 25% in China, but few analysts expect those rates to last as credit remains tight and a convincing economic recovery appears far off, a Reuters report said on Wednesday.

“We are not sure if the February numbers (in India) point to a revival or not,” Hitesh Kuvelkar, associate director of research at Mumbai-based First Global Securities, told the news agency. “This performance has to be sustained over three to four months at least, before we can call it a revival or bounce-back.”

Sales in Brazil and Russia – two other BRIC markets – are lagging with monthly vehicle sales falling so far in 2009.

Analysts reportedly attributed the sales surge in India last month to the government’s cutting another 2% from excise duties after a 4% reduction in December, as well as higher wages for central government employees.

A reduction in interest rates, about 200 basis points last month, also helped turn some of the pent-up demand into sales, analysts said.

In China, the report added, many expect this month’s sales to reverse the surge in February, which had five extra working days compared with the previous February, when the Lunar New Year holidays occurred.

“A single month of data is no evidence of a sustainable recovery,” IHS Global Insight analyst John Zeng told Reuters, adding that March could show a decline from a record high for the same month last year.

“Car sales cannot be isolated from the broader macroeconomic environment, which has not shown signs of recovery so far. China has not been hit as badly as other (economies) in the current financial turmoil, but it certainly has felt the pain,” he said.

Ford India head Michael Boneham said easing the credit crunch was critical to boosting sales in India, which he said was less vulnerable to the global recession than China since exports were not as big a driver of its economy.

“The credit crunch… is causing a concern in the short term because we have customers who want to buy cars but have no source of credit,” Boneham told Reuters. “It’s a long road to recovery,” he added, noting that the consensus view seemed to point to a turnaround only in 2010.

Hyundai India marketing and sales chief Arvind Saxena said last month’s sales had been helped to some degree by an easy comparison from the year before, when many held off their purchases until March ahead of a budget announcement.

“The overall market situation continues to be challenging and not much should be read into the growth in February,” he told Reuters.

While China may not grow at the strong pace of the last few years, analysts expect sales to rise at a slower rate as the economy keeps growing.

Zeng expects full-year growth of 10% this year but others think China might do better.

“It is true that thousands of migrant workers are out of a job now as the economy slows and exports tumble. But migrant workers are not the potential car buyers anyway,” Chen Qiaoning, analyst at ABN AMRO TEDA Fund Management, told the news agency.

“The era of 20%-plus annual sales growth may never come back again, but a healthy double-digit rise is certainly achievable this year,” he added.