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July auto sales in India rose 31% over the same period last year to a record high of around 1.24 million units as consumers took advantage of cheaper Car loans and newer car and bike models, according to data released by the Society of Indian Automobile Manufacturers, or Siam.

The previous high of 1.23 million units was set in March.

Though the spike was across segments—cars, two- and three-wheelers, and trucks and buses—it was driven primarily by sales of cars and two wheelers, which rose 37% and 30%, respectively.

Vishnu Mathur, director general at Siam, said as fundamentals such as lower interest rates and robust gross domestic product (GDP) growth continue to be strong, “even small steps by auto makers to create excitement in the market are paying off”.

Analysts say with the onset of the festive season, as auto makers despatch more vehicles to dealers, September and October will see sales gaining further momentum.

But the base effect will catch on, said Vaishali Jajoo, analyst at Angel Broking Ltd, leading to moderation in the forthcoming months. “While the overall volumes will continue to be robust, the growth will taper off,” she said.

Passenger car sales were led by market leader Maruti Suzuki India Ltd, which saw sales returning to normal levels after a slowdown in June because of a plant shutdown for maintenance. The car maker sold 76,111 units in July, up 26% from the corresponding month last year.

Incremental sales of the Nano, the ultra compact car that accounts for one in every three cars sold by Tata Motors Ltd, had its impact on the industry’s sales numbers. Growing sales of new models such as Ford’s Figo, Volkswagen’s Polo and Nissan’s Micra, among others, also contributed to the higher volumes.

Sales of motorcycles and scooters, which went up to 938,000 units, were led by market leader Hero Honda Motors Ltd, which continued its 400,000-plus units streak, and Bajaj Auto Ltd, which has been gaining ground with new models.

Driven largely by Tata Motors, the country’s largest auto maker by value, the Bombay Stock Exchange’s auto index, which comprises 14 firms, rose 1.15% to 8,630.50 points on Monday. Tata Motors’ shares closed at Rs918.95 each, up 2.75%. The company will report its first quarter earnings on 10 August.

The broader 30-stock Sensex, BSE’s benchmark index, gained 0.79% to close at 18,287.50 points.

Siam’s Mathur said that unlike car sales, which were buoyant even during the slowdown, two-wheeler and commercial vehicle sales are likely todip as the base effect wears off. Sales of trucks andbuses expanded 37% to 51,481 units.

According to Mahantesh Sabarad, senior vice-president (equity research) at Fortune Equity Brokers India Ltd, commercial vehicle sales, which are seeing an upsurge owing to new emission norms that are to be implemented from October, will weaken after September. “We expect an upswing only in March,” he said.

Typically, transporters advance their buying decisions before new emission norms take effect as this is usually followed by a price hike. The commercial vehicle market, which graduated to Euro 4 emission norms in April in 13 cities, will see the rest of the country switch to Euro 3 norms in October.

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