Lower interest rates and tax cuts boosted Indian auto sales last month, halting a four-month fall.


Though the Society of Indian Automobile Manufacturers (SIAM) on Monday reported 115,386 cars sold in February, up 21.8% year on year, industry observers said challenging months lay ahead.


“Some finance has started flowing into the market,” SIAM’s director general Dilip Chenoy told Reuters, “But not in a significant way for two wheelers and commercial vehicles. Everyone is focusing on cars.”


Car sales in India have fallen six times in the last seven months. For the fiscal year so far, from last April to the end of February, volume was up a marginal 1.35% year on year, compared with 11.8% the previous year.


Asked if the government’s stimulus packages had helped, Chenoy said: “The numbers say the same thing. Financing has started, the excise duty cuts have helped.”


Chenoy told Reuters that, if the uptick continued, automakers would likely see a marginal increase in sales from a year ago. But he also said March sales would be “challenging”, and did not give an outlook for the year beginning next April.


Sales of trucks and buses fell 31.7% to 31,069 units, the data showed.