Passenger vehicles reportedly saw good demand as customers continued to show keenness in vehicles for observing social distancing and safety of their families.
Three-wheeler sales also declined by 57 per cent to 13,728 units, as compared to 31,930 units in March this year.
In February, the country's largest carmaker Maruti Suzuki India (MSI) reported sales of 1,44,761 units, up 8.27 per cent from the same month last year.
The industry is also facing a shortage of semiconductors, steel and shipping containers leading to shortage in production and exports.
Going ahead, however, the shortage of semi-conductors is likely to impact supply chains and, subsequently, the production capacity of automakers.
The retail sales of two-wheelers lag behind the wholesale sales numbers but would even out over a period, as original equipment manufacturers engage with their dealers.
The ratings agency said, however, that the overall auto industry would continue to grow in the next few months, in line with improving economic indicators.