Passenger car exports from India declined 1.66 per cent to 5,42,082 units in 2014-15 due to challenges in traditional overseas markets like Europe, Sri Lanka and Algeria.
The decline was also mainly due to the country's largest car exporter Hyundai Motor India Ltd (HMIL) slipping over 18 per cent in its overseas shipments during the last fiscal.
Car exports stood at 5,51,218 units in 2013-14, according to data from the Society of Indian Automobile Manufacturers (SIAM).
HMIL recorded a 18.02 per cent drop in car exports to 1,91,221 units from 2,33,260 units in 2013-14.
On the other hand, Maruti Suzuki India's (MSI) exports during the last fiscal rose by 9.77 per cent to 1,09,593 cars compared to 99,832 units in 2013-14.
Europe, the biggest market for compact cars from India, is still recovering from a slump, while regulatory issues in countries including Algeria and Sri Lanka also affected shipments.
In Sri Lanka, the Indian car exporters are facing high taxation issues while Algeria has brought in changes in the technical regulations overnight, thereby impacting the exports to these markets.
Meanwhile, Japanese car maker Nissan's exports rose 3.57 per cent to 1,20,266 units in 2014-15 from 1,16,113 units earlier.
Toyota Kirloskar Motor's exports of passenger cars declined 35.42 per cent to 17,607 units, while Volkswagen posted nearly two-fold increase in shipments to 64,994 cars.
Domestic car sales in India rose by 4.99 per cent in 2014-15 after falling for two consecutive fiscals, as lower fuel prices and softening of interest rates led to reduction in the overall cost of ownership.
According to data released by SIAM, domestic car sales in FY 2015 stood at 18,76,017 units as compared to 17,86,826 units in the previous fiscal.