NEW DELHI: India’s passenger car sales gained in January to a record as economic growth and cheaper loan rates helped boost demand.

Local sales rose 32 percent from a year earlier to 145,905 units, the Society of Indian Automobile Manufacturers (SIAM) said in a statement in New Delhi today. That’s the highest since at least 1950, said Dilip Chenoy, director general of the group of all vehicle makers in the country.

Demand for Tata Motors’ $2,500 Nano and Maruti Suzuki India hatchbacks has withstood the worst of a global slump as record-low interest rates and government stimulus measures boosted demand. Ford Motor Co. and Volkswagen AG are among carmakers building plants and unveiling new cars in India and China as growth slows in their home markets.

“Government stimulus measures and benign interest rates have favored the auto industry,” said Vaishali Jajoo, a Mumbai- based analyst at Angel Broking Ltd. “If the rates begin to go up or the stimulus is taken away, then growth will taper off.”

India’s economic growth may accelerate this year for the first time since 2007. The federal government cut taxes and stepped up government spending to provide fiscal stimulus worth more than 4 percent of GDP amid a global recession.

Asia’s third-largest economy will probably expand 7.2 percent in the year ending March 31 from a year earlier after growing 6.7 percent in the previous 12 months, the Central Statistical Organisation said in a statement in New Delhi yesterday.

Reserve Bank of India Governor Duvvuri Subbarao on Jan. 29 raised India’s growth forecast to 7.5 percent in the year ending March 31. To curb inflation, Subbarao last month raised the proportion of deposits that lenders need to maintain as cash reserves to 5.75 percent from 5 percent. The bank has held its benchmark interest rates at a record low since April.