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UPDATE 1-India's Hero Honda sees May bike sales rising

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NEW DELHI, May 15 (Reuters) - Hero Honda Motors Ltd , India's largest motorcycle maker, said on Thursday it expects sales in May to rise from April as the marriage season and an anticipated rise in farm output boost rural demand.

Hero Honda, in which India's Munjal family and Japan's Honda Motor Co each hold 26 percent stakes, sold 1.677 million bikes in the year to March and about 45 percent of sales came from the rural markets where incomes depend on good rains.

"May is looking excellent and June promises to be the same," Atul Sobti, senior vice-president for marketing at Hero Honda , told reporters on the sidelines of the launch of the New Delhi-based firm's most expensive motorcycle.

Sobti said sales were already looking up in the current month as compared to last month. In April, sales fell 1.21 percent to 134,318 units from the same month a year earlier as a nationwide truckers' strike hit deliveries.

"May and June is a good season because of marriages and agricultural output presents a good picture across most of India, especially the north," Sobti said.

Strong demand for the firm's cheapest bike, CD-Dawn, that was launched in mid-April, would also contribute to growing sales.

"Double-digit two-wheeler growth is on the cards for Hero Honda in the current fiscal... it should happen unless there is a catastrophe on the monsoon," Sobti added.

Good monsoon rains are crucial for the economy as farm production, which contributes a quarter to India's GDP, is heavily dependent on the timely arrival and distribution of rainfall.

Sobti said the launch of a 223-cc bike in the premium segment, the fastest growing segment of the 3.8-million-a-year domestic bike market, would also contribute to sales.

"Our plan is to do at least 20,000 units in this financial year (ending March 2004)," Sobti said.