Passenger vehicle sales stood at 197,653 units in September 2018, according to FADA.
Retail sales of two wheelers also decreased 12 percent year-on-year to 1,098,271 units as compared to 1,248,998 units in the year-ago period.
Commercial vehicle sales declined by 18.5 percent year-on-year to 63,518 units against 77,980 units in September last year.
Total sales across categories declined by 12.9 percent to 1,375,314 unites in September against 1,579,191 units in the same month last year.
FADA President Ashish Harsharaj Kale said retail sales were under pressure during the month and the de-growth was on expected lines.
The continued heavy monsoons in major states also contributed to the sales lag, he said.
"The complete effects of the positive measures announced by the union government were still not visible at the retail levels during September," he added.