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Amid much fanfare, Korea's Hyundai Motor launched its smallest car in India, the Eon, in October last year.
The car was priced nearly Rs 15,000 cheaper than its aging warhorse and the company's entry-level model, the Santro.
The company hoped to generate sales in excess of 12,000 units a month.
However, it is currently churning out up to or a little more than half the targeted figure.
Absence of a diesel option and the economic slowdown have hurt sales, believe Hyundai officials.
But the lukewarm response for the Eon has catapulted Tata Motors to the second spot in the domestic market, following a resurgence in demand for the Nano.
Since December, Tata Motors has been the second-largest passenger vehicle maker, for two months in a row.
Arvind Saxena, director, sales and marketing, Hyundai Motor India, said, "The market is not in the best of shape, people are struggling.
"Plus, customers are different these days. They want more reassurance about a product and this comes only when they see more units of the car on the roads."
Meanwhile, entry into rural areas, armed with better finance packages, has led to an increase in demand for the Nano from 3,000 units in September to 7,500 units in January.
Tata Motors sold 40,213 PVs compared to 33,900 units sold by Hyundai in January, according to data supplied by the Society of Indian Automobile Manufacturers.
The company is upping the ante further by targeting sales of 10,000 units of the Nano every month.
Prakash Telang, MD (India operations), Tata Motors, said, "We hope to cross the 10,000 figure soon. It could be in a month or two, so that it gives us good traction. Also, we have come with channels like special Nano access points. At present, we have 120 in operation and we are targeting 300."
V G Ramakrishnan, senior director, Automotive Practice, Frost & Sullivan, said, "The Hyundai Eon suffered from poor positioning and pricing.
"The car was a rival to Maruti's Alto, but it was priced higher than that. The Eon must have canabalised the Santro and to some extent the i10, as well."
Similarly, Toyota Kirloskar, the joint venture subsidiary of Toyota Motor Corporation, has trumped Honda Siel Cars India to become the second largest Japanese car entity in India after Maruti Suzuki.
Riding high on the Etios, the Etios Liva and the Innova, Toyota Kirloskar has performed better than Honda Siel, which has struggled with the Brio, its first compact hatchback.
Lack of parts availability from its Thailand operations and unavailability of a diesel option have impacted the Brio.
In the wake of disruption in supplies from Thailand, the company had been working under production constraints since November.
Meanwhile, new capacity added by Honda Motorcycle and Scooter India, the largest Japanese two-wheeler maker in India, has pushed itself to the third spot, displacing Chennai-based TVS Motors with strong demand for the Activa scooter and other models.
Motorcycle models, such as the Jive and the Flame, have failed to generate strong sales for TVS Motors in the domestic market.
The company's total two-wheeler sales in nine months ended January stood at 1,581,968 units, a growth of nine per cent against HMSI's total of 1,586,009 units at 24 per cent growth, according to SIAM.
Truck and bus making company Ashok Leyland's absence in the light truck segment over the years did not allow it to tap into the segment's robust growth.
M&M has taken Ashok Leyland's position to become the second largest CV maker.
