Passenger car shipments from India declined 18.85% to 33,909 units in January due to challenges in top export markets like Algeria, Europe and neighbouring countries.
Indian car makers had shipped 41,787 units in the same month of the previous year.
"We are facing issues in Algeria as they have brought in some changes in technical regulations. We have visited the country to sort out the issues. It is bothering us," Society of Indian Automobile Manufacturers (SIAM) Deputy Director General Sugato Sen told PTI.
In 2014-15, Indian companies exported passenger vehicles (PVs) worth $293 million to Algeria. Besides, PVs worth $158 million were exported to Sri Lanka. UK shipments accounted for $335 million.
In the April-January period this fiscal, car exports have declined by 5.22% to 4,39,208 units as against 4,63,391 units in the corresponding period last fiscal.
When asked if the auto industry expects some headway regarding relaxation of regulations in Algeria, Sen said, “I don't think they will budge from their stand, we will have to adjust accordingly."
In Sri Lanka, the Indian car exporters are facing high taxation issues while Europe, the biggest market for compact cars from India, is still recovering from a slump, he added.
During January, exports of passenger vehicles, including vans, utility vehicles and cars, declined 6.72% at 42,084 units from 45,114 units a year earlier.
During the last month, the country's top car exporter Hyundai Motor India recorded a 56.66% drop in exports to 4,335 units from 10,003 units in January 2015.
Similarly, Maruti Suzuki India's (MSI) exports during the last fiscal declined by 36.25% to 6,467 cars compared to 10,145 units in January 2015.
Japanese car maker Nissan also saw its exports decline 11.29% to 8,892 units last month from 10,024 units during the year-ago period.
Toyota Kirloskar Motor's exports of passenger cars declined 56.69% to 738 units, while Volkswagen reported nearly 14.73% decline in shipments to 6,230 cars.
Domestic car sales in India fell for the first time after 14 months of continued growth in January as discounts dried up during the month with automakers correcting inventory at dealer levels post year-end freebies dole out.
According to data released by SIAM, domestic car sales in January declined marginally to 1,68,303 units compared with 1,69,527 units in January 2015.