"Stock correction by manufacturers continued in January to cut inventory that were piled up during the festive period, which saw sluggish sales," SIAM Deputy Director General Sugato Sen told PTI.
He, however, said retail sale was better than wholesale in January, and the industry expects demand to grow in the remaining two months of the fiscal.
During the month, market leader Maruti Suzuki India (MSI) posted a marginal growth of 0.18 per cent in its PV sales at 1,39,440 units. Rival Hyundai Motor India Ltd (HMIL) also posted 0.65 growth at 45,803 units.
Similarly, homegrown utility vehicles major Mahindra & Mahindra also saw 0.88 per cent rise in its PV sales at 23,864 units last month.
In passenger cars segment, MSI's sales stood at 1,01,865 units, down 4.12 per cent. HMIL's car sales was also down 1.58 per cent at 35,439 units last month. Honda Cars India, however, saw its car sales grow 51.67 per cent to 14,383 units.
In the two-wheeler segment, SIAM said total sales in January were down 5.18 per cent to 15,97,572 units compared to 16,84,761 units in the year-ago month.
Motorcycle sales last month declined 2.55 per cent to 10,27,810 units as against 10,54,757 units in the same month a year ago.
Market leader Hero MotoCorp's bike sales last month was down 4.95 per cent at 5,16,451 units. Rival Bajaj Auto, however, posted growth of 24.67 per cent at 2,03,358 units last month. Honda Motorcycle and Scooter India's bike sales stood at 1,28,525 units, down 24.19 per cent.
Total scooter sales last month declined by 10.21 per cent at 4,97,169 units as against 5,53,695 units in January last year, SIAM said.
Market leader HMSI's scooter sales were at 2,72,170 units, down 14.77 per cent. Chennai-based TVS Motor Co also saw its scooter sales dip by 0.41 per cent at 83,794 units.
Suzuki Motorycle India, however, witnessed a 60.28 per cent jump in it scooter sales at 61,348 units last month.
SIAM said sales of commercial vehicles were up 2.21 per cent to 87,591 units in January.
Vehicle sales across categories registered a decline of 4.68 per cent to 20,19,331 units from 21,18,465 units in January 2018, it added.