On the other hand, riding on the success of their new launches, Ford India and Honda Cars India posted double digit growth during the month.
Two wheeler makers Yamaha Motor India and TVS Motor Company posted single digit growth last month.
The country's largest car maker Maruti Suzuki India, said its domestic sales declined 6.3 per cent during the month to 96,569 units as against 1,03,026 units in January, 2013.
The sales of company's mini segment cars, including M800, Alto, A-Star and WagonR, slipped 17 per cent to 38,565 units during the period under review.
Sales of its utility vehicles, including Gypsy, Grand Vitara and Ertiga, also fell 21.9 per cent to 4,763 units last month, thus affecting the company's performance.
Hyundai Motor India Ltd reported a 2.6 per cent slide in domestic sales at 33,405 units during the month from 34,302 units in January 2013.
Mahindra & Mahindra's domestic sales stood at 40,324 units as against 47,841 in the same month previous year, down 15.71 per cent year-on-year.
"The first month of 2014 did not witness any improvement in the overall industry performance and the situation remains subdued," M&M chief executive (automotive division) Pravin Shah said.
The recent repo rate hike will in coming months escalate the rate of interest on car loan impacting customer sentiment, he added.
"We hope the upcoming Auto Expo which will showcase new products and technology will provide a trigger in giving a much needed boost to the auto industry and the overall sentiment," Mr Shah said.
Toyota Kirloskar Motor (TKM) reported 18.14 per cent fall in its domestic sales at 10,910 units in January 2014.
"The market continues to be sluggish and the market sentiments remain low," TKM senior vice-president, sales and marketing N Raja said.
Likewise, Tata Motors reported a 34 per cent drop in total vehicle sales to 40,481 units in January.
On the other hand, Honda Cars India Ltd posted nearly three-fold rise in its domestic sales at 15,714 units in January, 2014. The company, riding on the success of Honda City and the Honda Amaze, posted highest-ever monthly sales in January.
"We have received an overwhelming response to the all-new Honda City, and the Honda Amaze continues to do strong sales," HCIL senior vice president (marketing and sales) Jnaneswar Sen said.
Similarly, Ford India also posted a 10.62 per cent rise in domestic sales at 6,706 units in January as against 6,062 units in the same month of the previous year.
"Ford has ushered in the new year on a note of growth and commitment...," Ford India executive director (marketing, sales and service) Vinay Piparsania said.
Two-wheeler maker Yamaha Motor India's domestic sales grew by 6.5 per cent to 31,721 units last month. TVS Motor Company's domestic two-wheeler sales rose to 1,56,138 units in January 2014 from 1,54,107 units in the same month last year.