The first Tata Nano, the world's cheapest car, was delivered in July

Car sales in India have risen by almost a third as new launches and lower interest rates encourage people to buy new cars.

Sales jumped 31% in July, to 115,067 units, from the same month a year ago, the Society of Indian Automobile Manufacturers said.

Commercial vehicle sales also rose by 9.6% after months of decline.

The first owner of the world's cheapest car, the Tata Nano, took possession of his vehicle in Mumbai in July.

'Sustainable demand'

"Lower interest rates, government stimulus packages, a reduction in excise duty rates towards the early part of the year and the growing presence of players in the rural markets has aided this recovery in industry volumes," said Vaishali Jajoo, analyst at Mumbai's Angel Broking.

July was the sixth consecutive month in which car sales increased.

Analysts said that the trend was likely to continue.

"Unlike last year, banks are willing to lend now and there is a return in customer demand, which will grow sales," said Ashish Nigam, analyst at Antique Stock Broking.

"With new launches there are more urban buyers and I see demand for vehicles being sustained."

Tata Motors says it has received more than 200,000 orders for the Nano, which was launched in March at a factory price of 100,000 rupees ($2,092; £1,257), not including taxes and other charges.

Car sales in a number of major economies are starting to pick up, boosted in many cases by government incentives for trading in old cars.