Maruti, which was jolted in the year by crippling strikes at its Manesar plant, saw numbers go down 13% in December at 77,475 units against 89,469 units in the same month of 2010. The company's mainline portfolio of Alto, A-Star, WagonR and Maruti800 compact models saw numbers remain low as sales went down by 16%. The company's premium hatchback segment of Swift, Estilo and Ritz was near-flat with a 0.5% growth.

But as Maruti's numbers declined, others managed to grow. Hyundai, which recently launched a new entry-car Eon, saw numbers grow 13% at 29,516 units against 26,168 units in December 2010. Arvind Saxena, the company's sales & marketing director, said demand is expected to remain subdued in the coming months. "An increase in sales in December gives us cause for some cheer in a year that has been below expectations. We do not expect an upturn in the market in the near future."

Manufacturers had to sweeten discounts in December as the sluggish market was showing no signs of a turnaround. The uncertainty in economic growth and talk of job cuts and poor increments have dampened sentiment. And even though RBI took a breather from the spate of interest rate hikes, the actual financing rates are yet to come down. "The problem with the high interest rates is that they impact the home loan borrowers in a big way. Since most prospective car buyers have a home loan already running, they are not left with too much of a disposable income to buy a new car."

Auto body Siam has already taken cue from the weak sentiments and twice downgraded its sales forecast for the fiscal 2011-12. "We do not expect to meet our forecast of 2% to 4% growth in car sales for this financial year and we may revise the forecast in January," Siam's senior director Sugato Sen said a few days back.

The worry for the industry is that the negatives are impacting the big-volume compact car segment. The segment, that contributes nearly 65% of overall car sales in India, is the worst hit by the rise in interest rates of car loans and petrol prices. The pressure on the segment can clearly be seen by the performance of Maruti in the market, which otherwise leads in the category.