Riding high on the success of Maruti Udyog in the domestic market, passenger car sales grew 18.48 per cent in June over the same month last year.

A significant portion of the growth in June was propelled by new car launches, including Maruti's SX4, M&M's Logan and GM's Chevrolet Spark.

This growth has taken place despite the rise in interest rates on car loans by almost 5 to 6 per cent over the past year.

Car loans account for around 85 per cent of car sales. In May, car sales saw single digit growth.

For MUL, growth came mainly from A2 and A3 segments. Sales in the A2 segment, comprising the Alto, Swift, Wagon-R and Zen Estilo, grew 38 per cent to 37,646 units in June, while that in the A3 segment (SX4 and the Esteem) grew 46 per cent to 3,923 units.

However, Korean car maker Hyundai Motor saw a drop of 4 per cent in domestic sales, which stood at 16,335 units, against 17,032 last year.

Tata Motors, among the few to see sales drop, saw sales of the Indica fall 4.4 per cent to 11,727 units, while the Indigo sedan witnessed a drop of 18.4 per cent to 2,354 units.

A new launch also saw Mahindra and Mahindra, the utility vehicle and now car maker, post significant sales growth.

The Logan accounted for 18.39 per cent of M&M's auto sales.

General Motors, the fourth largest car maker in terms of market share, also saw robust growth. Its recently launched Chevrolet Spark sold 1,504 units, accounting for 31.5 per cent of sales.

Hyundai's sales were hit by a 49 per cent dip in sales of the Santro and Getz (A2 segment) at 13,630 units against 27,228 units in June 2006.

However, sales of its mid-sized segment grew 9.59 per cent to 2,593 units from 2,366 units primarily due to sales of Verna which sold 2,256 units.

"We are sure, the next few months will see stronger retail as we overcome our capacity constraints with the new plant starting operations later this year," said Arvind Saxena, vice president, marketing and sales, Hyundai Motor India.