Domestic passenger car sales in India during June rose 24.5% year on year as special offers and price rise fears boosted purchases.

The Society of Indian Automobile Manufacturers said in a statement cited by Reuters that 80,283 cars were sold in June compared with 64,470 in the same month a year ago.

Sales for the April-June period, the first three months of the financial year to March 2007, rose 23.7% year on year to 243,633 units.

"June is traditionally a lean month so some of the players have started offering higher than normal discounts," Kalpesh Parekh, assistant vice president at ASK Raymond James told the news agency. "The cut in excise tax for small cars to 16% has also helped to some extent."

The report noted that the Indian government slashed excise tax on small cars to 16% from nearly 25% in February's annual budget in a move, implemented in April, aimed at boosting car sales.

Some manufacturers had planned to raise car prices to offset an increase in the cost of raw materials such as steel, aluminium and rubber but have not yet done so in a cut-throat market, the report noted.

Sales of commercial vehicles - trucks and buses - rose to 33,954 units in June, compared with 27,034 units a year ago. April to June sales stood at 99,313 versus 67,475.