India’s auto industry has made a “cautious” start to the new year after a “torrid” 2008 though the economic slowdown is still affecting sales, a local report said.

Passenger car market leader Maruti Suzuki [which set domestic and total sales records and boosted domestic sales 5.6% to 67,005 units last month] and motorcycle giant Hero Honda both reported sales growth in January but almost all other companies from leading exporter Hyundai to Bajaj Auto remained in the red.

“We have begun the year well and am confident we have turned the corner,” Maruti sales and marketing chief Mayank Pareek told The Hindustan Times. “We do not give forward guidance on how much growth we will clock this year but we have our strategies in place now and will continue to grow this year.”

But the global recession and liquidity crunch, which has curtailed potential buyers’ financing options, continued to bite most automakers last month. Second and third placed Hyundai and Tata Motors posted 13.5% and 8.9% declines respectively.

Utility vehicle specialist Mahindra & Mahindra posted a 21% drop in January total vehicle sales to 17,611 units. Domestic sales dropped 17% to 17,320 units, exports were down 80% to 291 and Logan sales fell 74% to 597.

Bankers told the Indian newspaper the liquidity situation was ‘comfortable’ at present. “However the appetite for demand is not very high, we cannot force people to take loans,” an anonymous PSU bank official told the Hindustan Times.

Meanwhile, deposit rates are set to fall as well, as bankers prepare to cut lending rates. “We will have to bring down deposit rates too to keep a balance on the cost of funds,” he said.