New Delhi, April 11: Mahindra Renault managing director Rajesh Jejurikar shook his head and smiled last week at the launch of the Logan when asked if he was spooked by the thought that the French carmaker was entering the Indian market with its mid-size sedan at the wrong time when interest rates had started to surge.

Jejurikar and a slew of automakers who have lined up several launches in the first half of this year can heave a sigh of relief that the Cassandras who predicted that fickle February would morph into manic March have been proved to be a bunch of bogus fortune-tellers.

Car sales have boomed by 23.3 per cent in March at 114,195 units over the previous month. February was the cruellest month for carmakers when sales slumped 11.4 per cent to 92,594 units over January’s sales of 104,488 units.

Buyers had put off their purchases in February in the hope that finance minister P. Chidambaram would slash excise levy on mid-size cars in the budget, which he didn’t do. Early in March, when the Reserve Bank suddenly raised the interest rates, there were ghoulish forecasts for the car industry.

But the robust growth in March lifts the veil of despondency that had descended on carmakers.

On a year-on-year basis, car sales grew by a meagre 2.89 per cent in March but it’s the sequential growth figures that the industry really worries about.

According to figures released by the Society of Indian Automobile Manufacturers (SIAM), domestic passenger car sales stood at 114,195 units against 110,978 units in the corresponding period a year ago.

The sluggish growth in car sales in March compared with the year-ago figures is in sharp contrast with the high double-digit growth the industry registered in January and February.

The year had started on a good note for the automobile industry. Domestic car sales in January grew by 24.04 per cent. Car sales stood at 104,488 units against 84,235 units in the corresponding period a year ago.

In February, domestic passenger car sales grew 46.67 per cent at 92,594 units against 63,213 units in the same month a year ago.

Analysts say hardening of interest rates, resulting in higher EMIs, has essentially pulled down growth during the last month even though 2006-07 saw car sales grow by 22.01 per cent.

Mayank Pareek, general manager-marketing, Maruti, said, “The growth registered in March last year was abnormally high due to the 8 per cent excise cut. Therefore, comparing sales figures would be unfair.”

Car manufacturers admit that in the short term, sales could slow down. Arvind Saxena, vice-president-marketing and sales of Hyundai Motor India, said, “There will be a short-term slowdown but the market will find its bearings soon. It is not possible to grow at the same rate each quarter. An increased base, changes in policy announcements and interest rate hikes impact monthly sales”.

Carmakers are also not worried about the fact that the new models may be slow to burn the rubber.