India's largest carmaker Maruti Suzuki India reported 19.9 per cent increase in domestic sales at 90,093 units in July as against 75,145 units in the same month last year.
Its sales were driven mainly by the compact segment - comprising Swift, Estilo, Ritz - which rose 81.2 per cent to 25,156 units during the month as against 13,882 units in July last year.
MSI said sales of its popular compact sedan Dzire rose 22.2 per cent last month to 18,634 units as against 15,249 units a year ago.
Its rival Hyundai Motor India Ltd (HMIL) posted a growth of 12.69 per cent in its domestic sales at 29,260 units as compared to 25,965 units in the same month last year.
HMIL Senior Vice-President (Sales and Marketing) Rakesh Srivastava said: "The green shoots of growth are visible with the stabilisation of macro-economic factors and near to average monsoons."
He said the demand pull created by the product launches and strong channel spread has brought down the discounts.
Honda Cars India Ltd (HCIL) also reported 39.97 per cent increase in domestic sales at 15,709 units as compared to 11,223 units in July last year.
HCIL Senior Vice President Marketing & Sales Jnaneswar Sen said the company's latest Honda Mobilio has received good response from the market with over 10,000 bookings since its launch.
Toyota Kirloskar Motor said its domestic sales in July stood at 11,921 units as against 11,515 units in the year-ago month, up 3.52 per cent.
Car sales in India had fallen for the second consecutive fiscal in 2013-14 with a drop of 4.65 per cent as the auto industry continued to struggle with demand slump due to the sluggish economy.
In order to boost the sector, the previous government had in the Interim Budget in February reduced excise duty on small cars, scooters, motorcycles and commercial vehicles to 8 per cent from 12 per cent earlier.
For SUVs, it was slashed to 24 per cent from 30 per cent, while on large cars it was reduced to 24 per cent from 27 per cent. For mid-sized cars it was cut to 20 per cent from 24 per cent previously.
The new Narendra Modi-led government has extended the reduced rates till the end of December.
According to industry players, since the formation of the new government consumer sentiments have improved resulting in better demand.
Ford India, however, reported 3.49 per cent dip in its domestic sales at 7,592 units in July as against 7,867 units in the same month previous year.
"There are several indicators to suggest a gradual revival in customer sentiment in the past few months, including cues from the stock market and a steady improvement in manufacturing index," Ford India Executive Director (Marketing, Sales and Service) Vinay Piparsania said.
"As we approach the festive season, we expect a significant increase in footfalls at Ford showrooms across the country," he added.
General Motors India also reported 27.32 per cent decline in July sales at 4,726 units as against 6,503 units sold in the same month of last year.
"The buoyancy in the market is still missing because of high interest rates and high fuel prices. An insufficient monsoon is also affecting sales of small cars in rural areas and tier II cities," General Motors India Vice President P Balendran said.
Homegrown utility vehicles major Mahindra & Mahindra's domestic sales went down by 4.18 per cent to 33,047 units last month as against 34,490 units a year ago.
M&M Chief Executive (Automotive Division) Pravin Shah said: "The overall sales during the last month was subdued and the market remained challenging. With the monsoon now setting in across the country as well as the ensuing festival season, we expect positive sentiments in the coming months resulting in enhanced demand for our products."
Meanwhile, the country's largest two-wheeler maker Hero MotoCorp reported 8.67 per cent increase in its total sales at 5,29,862 units in July 2014 as against 4,87,545 units in the same month last year.
Yamaha Motor India also reported 35.81 per cent increase in domestic two-wheeler sales at 50,286 units in July from 37,026 units in the same month of the previous year.