Car sales in India rose for a third straight month in April, helped by lower borrowing costs, rural demand and the government's stimulus measures, but industry officials said a lasting recovery was still distant.

The automobile industry started the year with growth in both overall production and domestic sales in April 2009 over the same month last year with production growing at 10.19 per cent and domestic sales by 10.76 per cent. This was mainly because of better performance in the two- wheeler segment.

Data from the Society of Indian Automobile Manufacturers released today showed automakers sold 102,899 cars in April, 4.2 per cent higher than a year earlier. Car sales had slid for four months, before starting to rise in February.

According SIAM, domestic passenger car sales in April went up to 102,899 units from 98,752 units in the same month last year. Two-wheeler sales also surged by 13.71 per cent to 700,995 units in April, compared to 616,468 units in the same period last year. Bike sales during the month were up 12.11 per cent at 562,357 units as against 501,592 units in the corresponding month a year ago.

However, the eco-friendly electric two-wheelers segment declined with growth rate being -36.13 per cent.

Three-wheelers segment sales grew marginally by 1.69 per cent in April 2009. While passenger three-wheelers grew at 10.62 per cent in April 2009, goods carriers declined at 21.20 per cent.

But it is too early to predict a recovery for the segment, SIAM said. "On a month-on-month basis, all the segments, except for the two-wheeler, recorded fewer sales compared with last month. Signs are not very encouraging and things are still very sensitive," SIAM senior director Sugato Sen said.

"The growth that we are seeing is mainly because of the low base effect of the last year," he added. "We have to be careful before saying there are signs of revival. The fundamentals are still weak."

The industry witnessed total vehicle sales of 894,058 units against 807,183 units in April this year, up 10.76 per cent, SIAM said.

Automobile exports, however, declined at -10.04 per cent in the month of April 2009 with commercial vehicles and two-wheelers segment registering de-growth at -35.90 per cent and -1.74 per cent respectively.

Exports of passenger vehicles segment grew at 33.99 per cent and that of three-wheelers segment grew marginally at 1.74 per cent.

Emerging markets like China, India, Russia and South America are seen as long-term growth markets for global automakers, but job losses and wage cuts in the wake of the financial crisis along with tight financing conditions have dampened vehicle sales in India since mid-2008.

India cut factory gate taxes and the central bank slashed its key lending rate by 4.25 percentage points since last October to 4.75 per cent to revive demand, but Sen said more government measures were needed to sustain the sales momentum. "In the next few months, unless further positive policy intervention is there, things will not improve."

The industry body has forecast passenger vehicle sales in the current financial year to March 2010 to rise between 3 and 5 per cent.

Maruti Suzuki, which sells one of every two cars sold in the country, led the growth in April with an 8.6 per cent rise in sales. Rival Hyundai India's sales rose 3.5 per cent and No 3 Tata Motors' car sales were little changed from a year earlier.

Car makers are launching new models to attract customers and beat the slowdown.

Maruti, in which Japan's Suzuki owns a controlling stake, is launching its new Ritz hatchback on Friday, while sales of Tata Motors' much-awaited Nano small car would start in July.

However, the overall commercial vehicles segment registered decline -11.25 per cent. While medium and heavy commercial vehicles registered a sharp decline of -41.83 per cent, light commercial vehicles recorded a growth of 28.23 per cent.