Passenger vehicle sales plunged 31.57% year-on-year to 196,524 units in August, falling for the 10th straight month, data showed.
Japanese carmaker Toyota Motor and South Koreas Hyundai Motor are the latest in a string of companies to halt production at plants to combat slumping sales.
The data also showed that domestic passenger vehicle production was down nearly 17% in the month.
Tata Motors has had week-long shutdowns at four of its plants in the past two weeks, while Mahindra said it had 5-13 days without production at various plants between April and June.
Indias auto industry is in the middle of one of its worst slumps.