Indian Automakers Say Sales To Grow At Fastest Pace In 6 Years

India’s automaker industry body said Friday that it expected annual sales to grow at the fastest rate registered in 6 years. Sales may gain as much as 12 percent in the financial year starting in April, Vishnu Mathur, director general of the Society of Indian Automobile Manufacturers (SIAM), said, according to Bloomberg.

Demand for automobiles in the country is expected to ramp up as rural consumers build wealth and step up purchases of cars and sport utility vehicles (SUVs), Mathur said, adding: “Agricultural growth depends on the monsoon, and chances are that next monsoon will be better. With that there will be an improvement in the purchasing power and income levels.”

Rural India accounts for about 35 percent of sales of cars, SUVs and vans sold in India. Indian carmakers like Maruti Suzuki India Ltd. and Mahindra & Mahindra Ltd. already get about a third of their sales volume from outside urban areas, Bloomberg reported.

The forecast followed the first monthly decline in car sales in the country after 14 months of gains. India sold 168,303 units in January, as against 169,303 in the year-ago period, a drop of 0.72%, according to SIAM data, cited by Livemint.

“It is not a huge decline, but it means the recovery process is still fragile,” Mathur said. Sales of medium and heavy commercial vehicles jumped 33.56 percent to 28,533 units in January while two-wheeler sales grew marginally to 872,325 units.

Overall, the industry produced a total 19.8 million vehicles between April 2015 and January 2016, registering a marginal growth of 1.04 percent over the same period last year, according to Friday's statement.