Companies such as Mahindra & Mahindra, Tata Motors, Maruti SuzukiBSE 0.56 % as well as the local units of Hyundai Motor, Renault and Nissan Motor are working on all-new platforms to bring out new products.

In the past six months, Honda has launched the All New City, and Hyundai the new Elantra.

This reverses the weak consumer sentiment in the sector over the past 24 months. Dealers of cars and utility vehicles say buyers appear more confident in committing for a purchase than before the new government was formed at the Centre.

Speaking to Business Standard, Bhargava said, “I had a meeting with the chief minister and the state finance minister (Saurabh Patel).

“From the dealership perspective, we focus on how close can we go to our customers. We are looking to double the dealership presence by 2017 to increase our reach,” said Mayank Pareek, chief operating officer (marketing & sales).

These automobile manufacturers sold 190,193 vehicles in May, compared with 177,168 in the same month a year ago. According to data available with the Society of Indian Automobile Manufacturers (SIAM), domestic passenger vehicle sales had in April declined 9.50 per cent to 188,541 on a year-on-year basis.

The company said its domestic sales rose 16.4 per cent during the month to 90,560 units as against 77,821 units in May 2013.

In the process of reworking the state support agreement (SSA), thanks to the new scheme proposed by MSIL, the state government is learnt to have objected to offering value added tax (VAT)-related concessions twice, once to the manufacturer and then again to the seller. MSIL has been asked to suggest a new formula.

In the same month last year, the company had four models among the top 10 selling cars in India.