Car sales rose to 160,718 cars in February, up from 158,512 a year earlier, according to data released by the Society of Indian Automobile Manufacturers (SIAM) here.
SIAM, however, maintained a cautious outlook, noting that it was too early to say if the marginal 1.4 per cent growth had reversed the negative trend.
"It will take some more time to see if the negative trends have reversed. We are getting feedback from companies that footfalls have increased," SIAM Director General Vishnu Mathur told reporters here.
Finance Minister P. Chidambaram had last month lowered excise duty on small cars, motorcycles, trucks and buses to 8 per cent from 12 per cent. The levy on SUVs was cut to 24 per cent from 30 per cent. Taxes on compact cars and sedans were also reduced to 20-24 per cent.
Car companies responded by dropping their price tags to pass on the reductions to customers, resulting in a rise in sales.
"Month after month, numbers are so volatile, there is so much fluctuation that there is no trend visible," Mathur said.
During the April-February period of this financial year, car sales declined 4.6 per cent while the broader passenger vehicle segment witnessed a fall of 5.9 per cent.
"The current fiscal is going to end on a negative for passenger and commercial vehicles. Even if sales are much better in March, it won't be able to erase the effect of rest of the fiscal, which has been largely negative," Mathur said.
Sales of Maruti cars grew nearly 1 per cent to 84,595 units, while Honda more than doubled sales to 14,478 cars in February, up from 6,455 a year earlier.
Hyundai Motor India sold 33,875 units, marginally lower than 33,936 units despatched in February 2013.
Tata Motors' sales dipped 15.77 per cent to 9,026 units in February.
Utility vehicle major Mahindra & Mahindra saw its sales drop 16.16 per cent to 18,766 units.
Commercial vehicles sales were down 29.84 per cent to 47,982 units in February, the 10th straight monthly decline.
"Next fiscal should be better as the new government would come in and roll out policies on various sectors, including mining. Moreover, various projects could also get approval," Mathur said.
According to SIAM, motorcycle sales last month climbed 5.39 per cent to 8,43,307 units.
Market leader Hero MotoCorp's sales increased 1.08 per cent to 4,41,716 units. Rival Bajaj Auto witnessed a decline of 12.56 per cent at 1,56,184 units last month.
Honda Motorcycle and Scooter India (HMSI), however, saw its bike sales grow 45.92 per cent to 1,42,549 units.
Scooter sales in February were up 28.19 per cent to 3,11,957 units.
Segment leader HMSI saw sales up by 45.55 per cent to 1,70,974, while Hero MotoCorp witnessed a 2.26 per cent increase to 53,153 units. TVS Motor's scooter sales grew 39.33 per cent to 40,737 units.
Total two-wheeler sales in February rose 9.69 per cent to 12,20,012 units.
Vehicle sales across categories registered an increase of 4.99 per cent to 15,23,693 units from 14,51,263 units in February 2013, SIAM said.