Industry observers cited high cost due to GST and lack of adequate liquidity as the main reasons for the sales slowdown.
The data furnished by the Society of Indian Automobile Manufacturers (SIAM), showed that total sales of the Indian automobile sector declined by 18.71 per cent during July to 1,825,148 units, from 2,245,223 units sold during the corresponding month of the previous year.
"We hope the government would come out very soon with a revival package of sorts to arrest the de-growth and to bring the industry back to a growth path," SIAM Director General Vishnu Mathur said.
"We are hoping that the Finance Minister will issue some kind of measures to bring the industry back on the growth path."
Last week, automobile sector representatives met Finance Minister Nirmala Sitharaman to apprise her of the grim situation.
At present, the sector has proposed a reduction in GST rates, a scrappage policy and resolution of the liquidity and the non-banking finance company (NBFC) crisis.
The collapse of some large NBFCs has been cited as a major factor for the sales downturn as these companies used to provide the bulk of automobile financing.
Additionally, the data showed that passenger cars sales in the domestic market plunged by 35.95 per cent to 122,956 units, from 191,979 units sold during July 2018.
Furthermore, among the other sub-segments of passenger vehicles, the number of utility vehicles sold in India went down by 15.22 per cent to 67,030 units in July 2019, while 10,804 vans were sold last month, down 45.68 per cent from the corresponding month of 2018.
Overall, passenger vehicle sales declined 30.98 per cent in July to 200,790 units, from 290,931 units.
In the commercial vehicle segment, domestic sales were down by 25.71 per cent to 56,866 units last month, SIAM said.
Similarly, the data revealed that three-wheeler sales also decelerated. The segment's off-take went down by 7.66 per cent to 55,719 units during the month in consideration.
In addition, overall sales of two-wheelers, which include scooters, motorcycles and mopeds, edged lower by 16.82 per cent to 1,511,692 units.
However, exports across categories were higher by 4.22 per cent to 414,596 units.
( With inputs from IANS )