Auto sales defied the usual post-festive season slump to grow by double digits in November, helped by the low base in the year-ago period on account of the government’s demonetisation drive.

The top five passenger car makers--Maruti Suzuki India Ltd, Hyundai Motor India Ltd, Tata Motors Ltd, Mahindra and Mahindra Ltd and Toyota Kirloskar Motor Pvt. Ltd--collectively sold 234,226 units in the month, up 15.12% from a year ago.

Automakers in India count dispatches to dealerships as sales.

Market leader Maruti Suzuki reported a 14.3% year-on-year rise in domestic sales to 144,297 units in November. The utility vehicles segment led the way with a 34% jump over the year-ago period on the back of new launches during the festive season. The compact car category, led by the premium hatchback Baleno, also accelerated with a 32.4% rise in sales over November 2016. Sales of the Ciaz mid-size sedan fell 26.2% while older models like Alto and WagonR also posted a 1.8% dip.

Hyundai clocked sales of 44,008 units for the month, a 10% rise, on the back of the new Verna sedan, according to Rakesh Srivastava, director of sales and marketing at the Korean automaker’s Indian arm. The i10 and i20 hatchbacks, and compact sports utility vehicle (SUV) Creta also drove sales, he added.

Tata Motors posted a 35% jump in passenger car sales to 17,157 units on account of good demand for its new launches, including the compact SUV Nexon, said Mayank Pareek, president of the passenger vehicles unit at the firm.

Sales at Mahindra came in at 16,030 units during November, a 21.45% rise. Rajan Wadhera, president of the automotive business at the Mumbai-based automaker expects the growth momentum to continue on the back of recent refreshes of the KUV1OO compact SUV and XUV5OO SUV.

Toyota Kirloskar posted a 12.6% increase in sales to 12,734 units on the back of strong demand for the Etios Liva hatchback, the Innova Crysta and Fortuner, said N. Raja, director and senior vice-president of sales and marketing at the firm, a joint venture between Toyota Motor Corporation of Japan and the Kirloskar group.

Sales at Honda Cars India Ltd soared 47.2% to 11,819 units for the month, led by the compact SUV WR-V. Yoichiro Ueno, president and CEO at the firm, conceded that “the market is still to recover fully from GST-related changes affecting consumers at large", while adding that sales in November 2016 had been severely affected by demonetisation.

Ford India Pvt. Ltd’s sales rose 13.1% to 7,777 units on the back of the refreshed version of the company’s flagship compact SUV, the EcoSport, said Anurag Mehrotra, president and managing director, Ford India. The company is “confident of maintaining this sales momentum getting into 2018, despite macroeconomic indicators suggesting volatility in inflation and crude prices impacting industry growth over the near to medium term," he added.

On the whole, India’s factory activity accelerated to a 13-month high in November as the Nikkei/IHS Markit Manufacturing Purchasing Managers’ Index rose to 52.6 from 50.3 in October. A reading above 50 indicates growth.

Analysts say this development indicates a fading of the twin dampeners--demonetisation and GST--and therefore expect a healthy growth in demand for passenger vehicles and two-wheelers for the remainder of the fiscal year.

The rural segment is expected to contribute significantly, according to Subrata Ray, senior vice-president (corporate sector ratings) at ICRA Ltd. He added that the low base resulting from demonetisation a year ago has had a more pronounced effect on two-wheelers compared to passenger vehicles and will continue to skew the growth till January.

The easing burden of GST compliance, ongoing remonetisation, bank recapitalisation and a supportive global environment will also support a growth recovery with GDP growth expected to average 7.5% in fiscal 2018, wrote Sonal Varma, executive director and India economist at Nomura in a 30 November note.