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Failed monsoon won't hit India auto sales

India's vehicle industry, which has recovered in nearly all segments during the first four months of the year that began in April, would not be hurt by a failed monsoon, a top industry official said on Wednesday.

R Seshasayee, president of the Society of Indian Automobile Manufacturers, which represents more than 25 auto firms, said the industry had grown by more than 22 per cent by volume in April-July.

This positive trend pointed to a recovery in the coming months, he said.

"Though the delayed arrival and skewed distribution of the monsoon would reduce the purchasing power of the agrarian segment, several macroeconomic indicators support prospects of this recovery," he said in a statement.

"The uptrend in industrial production should, to a great extent, compensate for the setback in agriculture output," said Seshasayee, who is also the managing director of Ashok Leyland Ltd, India's second-largest truck and bus maker.

India is suffering its worst drought in 15 years as a poorly distributed southwest monsoon has dried up farmlands in nearly all parts of the country.

Monsoon rains are vital to India's agriculture, which contributes a quarter of the country's income and influences overall demand.

TURNING AROUND

India's truck and bus vehicle sales were hit the hardest in the past two financial years. Industry growth slowed in the past year and farm output shrank in the year before that.

But their sales surged 35 per cent in April-July from a year ago, helped by a sharp recovery in crop output in 2001 and improved industrial growth this year.

Industrial output in India grew four percent in April-June, compared with 2.2 per cent in the same period last year.

Seshasayee said increased spending on large infrastructure projects, including an ambitious cross-country highway network, had boosted demand for medium and heavy trucks.

India is the world's fifth-largest maker of trucks and buses, which are useful for transporting goods and people across the vast country.

He said combined sales of scooters, motorcycles and mopeds had grown 27 per cent in April-July, while overall vehicle exports jumped 60 per cent.

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