In April-May period this fiscal, the company has lost its position to Korean car maker Hyundai Motor as the second largest car seller in the country.

The company sold 37,991 units in the passenger vehicle category selling models like the Indica, Indigo, Indigo Marina, Winger, Sumo and Safari in the first two months of this year. Hyundai sold 46,011 units during the same period preceded by Maruti Suzuki.

Tata Motors share in the compact car segment declined to 15.78 per cent in 2007-08 from 19.21 per cent recorded a year ago, according to the Society of Indian Automobile Manufacturers (Siam).

Its Indigo's share slumped to 13.91 per cent as against 17.42 per cent recorded in the two comparable periods.

Experts attribute the company's drop in sales to the delay in launching new vehicles like the Indica and the Indigo, which were supposed to be introduced in the market last year.

The loss in demand for Tata-badged vehicles was capitalised by other companies like Hyundai and General Motors-owned brand Chevrolet.

"The company hasn't launched any significant model for a long time, even as the demand for its outdated models including the Indica and Indigo is on a drastic decline," said a city-based auto analyst.

"New volume (increasing) models are yet to be launched. Except the Indigo CS (the smallest sedan in the country) which was launched a while ago, overall numbers of the company are flat," the analyst added.

During last year, Maruti Suzuki, India's leading car maker, sold more than 7.11 lakh cars with a market share of 46 per cent, while Hyundai recorded a share of 14 per cent. General Motors was the biggest gainer during the period whose share rose to 4.30 per cent from a mere 2.81 per cent.

Tata Motors last year sold 2.27 lakh units, a growth of just 0.45 per cent as compared to the previous year's aggregate sales of 2.26 lakh units in the passenger vehicle category. The industry had grown by 12 per cent during the same period.

To tackle the slump, Tata Motors has said that it will launch at least four new models before the end of this financial year including new models in the compact car, mid-sized segment and the sport utility vehicle segment.

It will also launch the Nano later in the year.

Despite a robust line-up of vehicles due for launch, company officials claim that growth for the passenger car segment will be ‘tough' for the year, mainly due to lack of finance availability and spiralling interest rates which are further expected to harden with inflation touching 13-year-high.