Car sales in India rose 21% year on year in September for the eighth consecutive monthly rise, with industry officials expecting continued robust growth as the economy improves and consumer confidence rises.

Festival spending and easier availability of loans helped keep sales up, with demand fed by a INR180bn (US$4bn) pay-out to government workers plus back pay and bonuses paid to employees ahead of Diwali, the festival of lights, Reuters noted.

Automakers sold 129,683 cars during the month, compared with 107,517 units in the year-ago period, according to the Society of Indian Automobile Manufacturers on Tuesday.

Sales rose 14.8% in the first six months of the fiscal year that began on 1 April, reflecting consumer optimism and the resumption of automobile loans by banks after a halt following the credit freeze late last year.

"Everybody is cautiously optimistic," Dilip Chenoy, the chief of the automakers' group told Reuters. "The optimism is coming from many factors of the economy that are showing strong recovery.

"The caution is that it is not yet certain if the global recovery is on steam."

Next month SIAM would revise its current forecast for growth of 5% in passenger vehicle sales for the year to March 2010, Chenoy said, adding that growth could be in double digits if the numbers continued the way they had.

Sales of trucks and buses rose 6.5% to 45,451 units in September, the third consecutive rise, the data showed. Chenoy said the economy had to improve further before sales picked up in this segment.

SIAM has forecast a rise of 7 to 10% in sales of trucks and buses for the full year.

In comparison, car sales grew just 1.3% in 2008/09, while truck and bus sales plunged by a fifth.

Motorcycle sales rose 6.6% to 673,891 units in the month.