In a sharp uptick, cars sales rose by 17.47 per cent in July - highest in three months - to 1.62 lakh units helped by Maruti and Honda, but rural-market dependent motorcycles and LCVs continued to skid.
This marks the ninth consecutive month of domestic sales growth for passenger cars and a strong rebound from a modest rise of just 1.5 per cent in June.
This is also the best-ever show for the month of July for car sales in the domestic market.
Sales of motorcycles and light commercial vehicles (LCVs), which primarily depend on rural markets, fell by 6.36 per cent and 4.11 per cent respectively.
According to the data released by the Society of Indian Automobile Manufacturers (SIAM), domestic passenger car sales in July stood at 1,62,022 units, as against 1,37,922 in the same month of last year. This is the highest growth after 18.14 per cent recorded in April.
"We have seen fairly good growth in the passenger vehicle industry and in heavy commercial vehicle industry. We have almost seen 7.46 per cent growth in the passenger vehicle as a whole, out of which passenger cars has grown by about 10 per cent and in the medium and heavy commercial vehicle industry, we have seen a very decent growth of almost 25 per cent," SIAM Director General Vishnu Mathur told reporters here.
In July, leading passenger car makers as Maruti Suzuki reported an increase of 25.85 per cent in its sales to 91,602 units in comparison to 72,782 units of July 2014.
Similarly, Honda sales were up 42.98 per cent to 17,567 units; Tata Motors to 8,520 units with an increase of 26.18 per cent; Toyota Kirloskar, up 6.66 per cent with 5,025 units and Volkswagen, up 18.18 per cent to 4,029 units.
Sales of Hyundi Motors India Ltd were up only 1.83 per cent to 29,599 unit in July 2015 as against 29,067 units of last year. Car sales of some makers such as Ford, General Motors and Mahindra & Mahindra has declined in July.
"We have seen the number which is higher than any July in the past. That would be for the passenger cars as well as passenger vehicles as a whole," said Mathur.
In June, domestic passenger car sales rose 1.53 per cent to 1,62,677 units from 1,60,232 units in the year-ago month.
Motorcycle sales in July declined 6.36 per cent to 8,08,332 units, from 8,63,188 units a year earlier, while LCV sales were down 4.11 per cent, with 28,734 units as against 29,966 units in the same month last year.
"The light commercial vehicles still remain subdued, which is minus 5 per cent and the motorcycle industry which is still in negative with minus 3 per cent is actually pulled down the entire growth to 1.3 per cent," he added.
Motorcycle sales in June were up marginally to 8,77,696 units from 8,77,289 units a year earlier.
Sales of total commercial vehicles in July rose 8.41 per cent to 51,795 units in July, SIAM said.
"The heavy commercial vehicle is doing very well now. However, it has still not reached the peak levels of the last time," Mathur added.
Vehicle sales across categories registered an increase of 1.39 per cent to 16,19,771 units from 15,97,493 units in July 2014, it added.
Buoyed by overall performance, auto industry is expecting a better performance with a good monsoon which may push rural sales.
"Overall, we see a beginning of a good recovery process and we hope that as we go along with a good monsoon this year, we should see more robust and more sustained growth taking place in the second half of the year," Mathur said.
During July, total exports have also increased 6.94 per cent to 3,44,906 units from 3,22,514 units in July 2014.
"Exports are doing pretty well, largely as a result of new markets are being tapped. Over the last few years, the companies have made big efforts to tap new markets in Latin America, Africa and other countries and now we are seeing the results of all those efforts," Mathur said.
However, SIAM declined to comment over General Motors' decision to shut down its Halol plant.
"Every company has to take a decision on viability of its operations and by and far, what GM has said is that they would be investing lot more in India and they would be having much larger stake in India than they have in the past," he added.