ndia's car sales jump in Feb but recovery distant

But analysts and industry officials said the industry was still far from a lasting recovery and the months ahead would be challenging with credit still tight and consumers worried over possible job losses as industrial activity brakes sharply.

Data from the Society of Indian Automobile Manufacturers (SIAM) showed on Monday automakers sold 115,386 cars during the month, up 21.8 percent from 94,757 sold in the year-ago month.

"Some finance has started flowing into the market," SIAM's director general Dilip Chenoy told reporters, "But not in a significant way for two wheelers and commercial vehicles. Everyone is focusing on cars."

Auto makers have long seen emerging markets like China, India, Russia and South America as long-term growth markets, anticipating robust demand there to make up for declining sales in developed markets like the United States, Europe and Japan. But sales have slumped in these markets as the global financial crisis washed up on their shores, sending markets and growth prospects lower.

India usually sees stronger demand in March, when tax cuts traditionally unveiled in February's federal budget kick in. This year the government trimmed factory gate duties in December to try and inject some life in flagging growth.

Chinese sales slowed to single digits in 2008, before government incentives helped to boost them by 33 percent in February.

Car sales are a leading gauge of consumer sentiment in India, in the absence of other indices, and have fallen six times in the last seven months. In the year from April they are up a marginal 1.35 percent, compared with a 11.8 percent jump in 2007/08.