New Delhi: Car sales in India rose the fastest in two and a half years in October on festival buying and easier credit.

Analysts said the data firmed up belief that the industry was back on track for robust growth.

Robust growth: A car showroom in New Delhi. Auto makers sold 132,615 cars in October, compared with 99,052 units sold a year ago, according to Society of Indian Automobile Manufacturers data. Ramesh Pathania / Mint

Auto makers sold 132,615 cars in October, compared with 99,052 units sold a year ago, data from industry lobby group Society of Indian Automobile Manufacturers showed.

The 34% rise was the steepest since February 2007, when they had increased an annual 46.5%.

Demand was also stoked by an around Rs17,500-crore payout to government employees as back pay in September, ahead of Diwali, the festival of lights which is an auspicious time for purchases.

“The numbers are showing that the industry is on a growth path again," Vaishali Jajoo, autos analyst at Angel Broking Ltd said. Jajoo expects passenger vehicle sales to rise 8-10% in the current fiscal year to March.

Firms sold 1.55 million passenger vehicles in 2008-09, about the same a year ago.

Car sales are an important gauge of consumer sentiment.

India is a market that holds out hope for global auto makers, according to auto analysts and industry officials, showing a 19% rise in car sales since the fiscal year began in April, compared with flat sales in mature markets such as Europe and the US.

On Sunday, Carlos Ghosn, chief executive of the Renault-Nissan alliance, forecast the Indian car market to touch two million units in the current fiscal year and triple in the next 10 years. World over, car makers would sell 60 million units this year and next, he said.

Indian car makers have sold 821,954 units so far this year, 17.5% more than the same period last year.

Sales of trucks and buses, a key barometer of industrial activity, rose 52% to 42,562 units in October, the fourth straight rise and the strongest expansion since April 2007. They had grown 71.5% then.

India’s industrial output has been on an upswing in recent months. Industrial production rose 10.4% in August, the fastest in 22 months, and a Reuters poll of analysts indicated it could have risen 7.3% in September.

Motorcycle sales rose 14.2% to 611,828 units in October.