Car sales rebound in India and China Car sales in both India and China rose last month, boosted by spending during religious festivals in India and an increase in demand for non-Japanese cars in China. Passenger vehicle sales in China, the world's largest car market, increased 6.4 per cent year on year, despite a continuing politically-inspired decline in sales of Japanese-branded cars on the mainland. Year-to-date sales of passenger vehicles rose nearly 7 per cent to 12.57m, in line with industry forecasts for a rise of 5 to 10 per cent for the whole of 2012, the China Association of Auto Manufacturers said on Friday. Sales of all mainland vehicles, including passenger cars and commercial vehicles, shook off a decline in September - the first since January - to rise 5.3 per cent this October from last year. Car market analysts say the continuing political dispute between Japan and China over disputed territory is still hurting sales of Japanese branded cars in China, where some motorists driving Japanese cars were attacked during September protests. Several Japanese carmakers said sales fell faster in October than September, though Nissan said it began to see signs of a modest recovery by the middle of last month. Honda reported sales in October down 53.5 per cent year on year. Both Nissan and Honda have cut their full-year profit guidance as a result of the dispute. European, American and Korean carmakers took up the slack. Hyundai said its China sales climbed 37 per cent in October from a year earlier, up from a 15 per cent rise in the previous month, while General Motors and its China joint ventures saw a 14 per cent rise in sale last month, up from 1.7 per cent growth in September. Meanwhile, industry data from the Society of Indian Auto Manufacturers showed 172,459 sales during the month, an increase of 23 per cent on the year before, buoyed by a series of auspicious religious festivals during which Indians typically buy cars in unusually large numbers. The figures provide some relief for carmakers in Asia's third-largest economy, where the economic slowdown, raised import tariffs and a recent high-profile factory shutdown at Maruti Suzuki, India's largest carmaker by sales, have dented demand. However, analysts questioned the extent to which Friday's figures, which reflect the number of vehicles that car companies send to their dealerships rather than the actual sales to consumers, overestimated the extent of any potential recovery. "Sales have risen, but during the festive seasons companies also often dump cars on their dealers quite aggressively," says Deepesh Rathore, managing director for IHS Automotive in India. Because of this I don't think actual sales have picked up to the extent that is being reflected in the figures. Last month, SIAM dramatically cut its projections for growth in passenger vehicle sales during this financial year to between 1 and 3 per cent, down from its previous estimate of between 9 and 11 per cent, as part of a generally downbeat assessment of the industry's prospects. A number of Indian carmakers, including Tata Motors, the country's third largest player by sales, have also trimmed or temporarily suspended factory production in recent months, in anticipation of slower future demand. "Yes, it is the festive season, but nothing much else has changed, beyond the launch of a few new models," says Mr Rathore of IHS. Interest rates are as high as they were, growth is still slow, and consumer aren't earning any more. So why would sales recover this much?