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Sales of sports utility vehicles (SUVs) rose in December, while small car sales fell despite high discounts, data from Indian automakers showed on Monday.

While entry-level vehicles remain a millstone around automobile makers' necks, they have benefited from the sales of premium vehicles, catering to a more well-off demographic largely unaffected by inflation.

Maruti Suzuki and Mahindra & Mahindra reported domestic SUV sales growth of 24% and 39%, respectively.

Indian carmakers' SUV segment has benefitted from strong demand through the last year.

Mahindra, which makes SUVs such as the Thar, Scorpio and XUV, had multiple months of record sales in the category in 2023. It has seen 20%-57% sales growth each month this financial year so far.

Sales of SUVs have formed 36% of Maruti's domestic passenger vehicle (PV) so far this fiscal year, compared with 22% last fiscal, while accounting for almost all of Mahindra's PV sales.

The year-end, where automakers usually provide larger discounts, coupled with low demand for entry-level vehicles, prompted Maruti to increase discounts on its lesser-priced models by 40% to 45%.

However, sales of its small cars like the Alto and Baleno were down 29%. That was also, in part, due to Maruti's moderation of wholesales.

Among two-wheelers, Bajaj Auto's domestic sales jumped 26%, helped by strong sales of its entry-level motorcycles in the first half of the month.

Bajaj and other two-wheeler makers benefited from the wedding season that took place during the first half of the month, analysts have said.

Strong demand for the Triumph motorcycles that Bajaj manufactures have also helped volumes grow.

Tata Motors, TVS Motor and India's top two-wheeler maker Hero MotoCorp will report their monthly sales data later in the day.