According to data released by the Society of Indian Automobile Manufacturers (SIAM), the growth registered in the passenger vehicles (PVs) segment last month was the best-ever May sales.
Domestic PV sales rose to 2,51,642 units in May 2017 from 2,31,640 units in the same month last year, SIAM said.
Car sales in the domestic market rose by 4.8% to 1,66,630 units last month as against 1,58,996 units in May last year.
"This is the best ever sales performance of passenger vehicles in the month of May. Sales were driven by both utility vehicles and cars, which also posted their best sales in a 'May month' till date," SIAM Director General Vishnu Mathur told reporters here.
New model launches and the continued phenomenon of strong sales in the utility vehicle segment, comprising compact SUVs, led to strong growth in May, he added.
Utility vehicles during the period under review grew by 18.8% to 69,845 units from 58,793 units in May 2016, driven by strong sales of compact SUVs like Maruti Vitara Brezza and Hyundai Creta.
"PV sales continue to do well and with the upcoming GST along with prospects of a good monsoon season, we expect growth momentum to continue going ahead," Mathur said.
Despite strong sales, SIAM, however, stuck to its earlier growth forecast of around 10% for the PV segment.
Last month, Maruti Suzuki India continued its domination in the domestic PV space by selling 1,30,248 units at a growth of 15.10%.
Rival Hyundai Motor India was a distant second with 42,007 units with a growth of 1.59% followed by home-grown Mahindra & Mahindra at the third spot with 20,270 units, up 3.23%.
Tata Motors overtook Honda Cars India to take the fourth spot with 12,499 units, up 32.18%, while Honda Cars sold 11,278 units during the month, up 13.3%.
In the two-wheeler segment, total sales in May increased by 11.89% to 16,94,325 units compared to 15,14,334 units in the year-ago month.
"Rural markets have mostly recovered from the after effects of demonetisation and results are there to see," SIAM Deputy Director General Sugato Sen said.
Motorcycle sales last month rose 7.72% to 10,60,746 units from 9,84,715 units a year earlier.
Market leader Hero MotoCorp sold 5,42,457 units during May as compared with 5,01,009 in the same month previous fiscal, up 8.27%.
Honda Motorcycle and Scooter India (HMSI) sold 1,76,213 units last month as against 1,47,431 units in the same period of the previous fiscal, a growth of 19.52%.
Bajaj Auto posted sales of 1,56,523 units as against 1,79,822 units in May 2016, down 12.95%.
Scooter sales in May were at 5,63,326 units compared to 4,54,213 units in the previous fiscal, up 24.02%.
Segment leader HMSI posted sales of 3,34,168 units during the month as against 2,68,429 in May 2016, up 24.49%.
Chennai-based TVS Motor Co posted a growth of 41.37% in its domestic scooter sales at 83,338 units compared to 58,947 units sold in May 2016.
Hero MotoCorp sold 70,562 scooters during the month compared to 66,846 units in the same period last year, up 5.55%.
Sales of commercial vehicles, however, declined by 6.36% to 53,457 units in May, SIAM said.
"There is lack of buoyancy in economic activity at the moment and that is hampering sales in the segment. But, with activity likely to pick up, we expect CV sales to recover in the second half of the year," Sen said.
Pre-buying in the months of January, February and March also impacted sales in May, he added.
Vehicle sales across categories registered a growth of 10.05% to 20,35,490 units from 18,49,542 units in May 2016.