According to the data released by the Society of Indian Automobile Manufacturers (SIAM), domestic passenger car sales stood at 1,60,232 units last month compared to 1,39,624 units in June 2013.

"Factors like speculative sales and positive sentiments created by formation of stable government and extension of excise duty reduction have helped the passenger car sales post double digit growth in June after ten months," SIAM president Vikram Kirloskar told reporters here.

Elaborating further, he said people went ahead with their buying plans in June as there was no clarity whether the government would extend the excise duty reduction beyond June 30.

"So speculative sales during the last month was one of the factors that effected surge in sales. Whether we will be able to sustain this kind of growth in the coming months is what needs to be seen," Kirloskar said.

Commenting on the commercial vehicle segment, Kirloskar said the sales in the vertical have improved during the past three months.

"For the last three months constant improvement is happening in the commercial vehicle space. Though, it still remains in the negative territory, the opening of some of the mining and infrastructural projects has helped the sector," SIAM Director General Vishnu Mathur said.

Sales of commercial vehicles were down 9.03 percent to 51,119 units in June.

When asked whether the industry would continue to dole out discounts to spur sales, Kirloskar said: "I expect that discounts would start tapering as the industry won't be able to afford it. With rising input costs companies won't be able to afford it for long. Car companies need to make money to reinvest."

The auto industry can see some price hikes over the remaining part of the year, he added.

When asked if the recovery in the auto sector could be impacted by a deficient monsoon, Kirloskar said: "It is still early to say anything as there is still time for monsoon season to end.”

In June, car market leader Maruti Suzuki India posted 32.3 percent increase in its domestic sales at 86,223 units as against 65,172 units in the same month last year.

Rival Hyundai Motor India Ltd (HMIL) posted a growth of 8.76 percent at 33,258 units compared to 30,577 units in June last year.

(Agencies)

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