India's new car sales fell last month for the first time in almost three years.
The Society of Indian Automobile Manufacturers said July's vehicle sales had declined by 16% to 133,747 units.
The drop is a contrast to the same period in 2010 when carmakers recorded an average of 20% growth.
Analysts blame double-digit interest rates on motor finance deals and rising fuel prices for hitting consumer confidence.
For global carmakers India is one of the key growth countries, along with Brazil, Russia and China.