Excise duty on sports utility vehicles was increased by 3 percent in the Union Budget and that has hurt demand, the company said.
Mahindra & Mahindra's total sales in June declined 8 percent year-on-year to 38,092 units, a sign that demand for utility vehicles continues to slow in the domestic market.
The India's largest SUV maker sold 36,207 units in the domestic market, down 7 percent.
Its passenger vehicle sales, which includes UVs and the Verito sedan, were down 13 percent to 17,232 units.
SUV sales in the last three months have been hit by the rise in excise duty in the Union Budget, said Pravin Shah, CEO - Automotive Division, M&M, adding, slowdown also continued in the export market.
The challenging times will continue unless drastic measures are taken by the government, he said.
Meanwhile, M&M has increased prices by 0.5 percent from Jul 1, due to a rise in input costs, the maker of Bolero, Xylo and XUV500 SUVs said.
Prices have been increased by Rs 3,000-6,000 across all UVs expect the XUV500, it said.
M&M shares were down 0.5 percent at Rs 965.95 on NSE in afternoon trade.
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