* Sept car sales up on festival demand, easy loans

* Hopeful of double-digit growth in full year -industry body

* Trucks, buses clock growth third month in row

Car sales in India rose an annual 21 percent in September for their eighth straight rise, with industry officials expecting continued robust growth as the economy improves and consumer confidence grows.

Festival spending and easier availability of loans buoyed sales, with demand fed by a 180-billion-rupee ($4-billion) payout to government workers as backpay and bonuses paid to employees ahead of Diwali, the festival of lights.

India is one of two bright spots for the auto industry worldwide, besides China, the world's largest auto market, where volumes are far larger than in India. [ID:nSHA305740]

Indian firms sold 129,683 cars during the month, compared with 107,517 units in the year-ago period, data from the Society of Indian Automobile Manufacturers (SIAM) showed on Tuesday.

Sales have risen 14.8 percent in the first six months of the fiscal year that began in 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 reporters. 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 percent in passenger vehicle sales for the year to March 2010, Chenoy said, adding that growth could be in double digits if the numbers continued to pan out the way they had.

Sales of trucks and buses rose 6.5 percent 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 percent in sales of trucks and buses for the full year.

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

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

In Asian peer China, the country's biggest automaker, SAIC Motor Corp (600104.SS), became the latest player to say sales were racing ahead, up 47 percent in the first nine months of the year from a year ago.

The strong sales followed similar reports in recent days from most of the Chinese industry's top players, including Geely Automobile (0175.HK), Dongfeng Automobile (600006.SS)(0489.HK) and the China units of General Motors [GM.UL] and Volkswagen (VOWG.DE). ($1=46.13 Indian rupees) (Editing by Clarence Fernandez)

China India General motors