New Delhi, Sept. 9: Domestic car sales rose 33 per cent in August as lower borrowing costs, introduction of new models and forthcoming festivals in an expanding economy lifted demand.

According to the Society of Indian Automobile Manufacturers (Siam), sales rose to 1,60,794 units in August compared with 1,20,681 units in the same period a year ago. August sales outpaced July’s record of 1,58,674 cars.

Car sales during April-August 2010 grew 34 per cent to 7,53,199 units, according to Siam.

“We are going to exceed the projections (for this financial year),” said Vishnu Mathur, director-general of Siam. “We have so far grown much higher than the forecast.”

Siam had previously forecast sales to grow 12-13 per cent in this financial year.

India, which is home to more than 40 million vehicles, has one of the lowest number of cars per 1,000 people among the major automobile markets, according to analysts.

“The twin factors of low car penetration and rising income, which is increasing the affordability of private vehicles, are likely to add to growth in automobile demand in the coming years,” said consulting firm KPMG.

With the focus on domestic sales, exports dipped 7.21 per cent to 37,952 units in August from 40,901 units in the same month last year.

“The decline in export is understandable, as companies have decided to focus on meeting domestic demand,” said Mathur.

Overall, vehicle exports in August climbed 28 per cent to 1,91,033 units.