(Reuters) -Certain EV tax rule changes hurt Tata Motors' sales to dealers in September, while tumbling demand for Maruti Suzuki's small- and mid-sized cars kept them from joining some other Indian automakers' SUV-led sales jump, data showed on Tuesday.

Domestic car sales for Maruti and Tata dropped 3.9% and 8% year-on-year, respectively, data showed. Hyundai Motor India's sales fell 5.8%.

Sales from manufacturers to dealers have slowed drastically to a mere 0.7% increase between April and August, from 8% in the same period last year, per industry data, as the demand for cars tapered off after roughly two years of surging growth.

The lukewarm demand has led to pent-up stock at dealerships and has forced companies to cut their sales to dealers.

Levels of unsold cars rose to a record 70-75 days in August. Inventory levels for September and retail sales figures will be published later this month.

SMALL CAR SLUMP

Maruti's domestic sales in the small- and mid-sized segments fell 11%; the two account for about half of Maruti's overall sales.

India's top electric-vehicle maker Tata Motors, which reported falling sales for a fourth straight month, blamed high inventory as well as the expiry of some government incentives on EVs and the lapse of road tax waivers on EVs in certain states.

The SUV segments, however, grew as dealers stocked up anticipating a jump in sales during the festive period that will run from early October to early November this year. Indians typically make big-ticket purchases during festivals since it's both auspicious and they get big discounts.

Mahindra & Mahindra, among India's top SUV makers by market share with its whole portfolio comprising SUVs, said its domestic car sales rose 24% year-on-year.

The Indian units of Japan's Toyota and South Korea's Kia posted sales increases of 14% and 17%, respectively, including exports.

Toyota and Kia also sell mostly SUVs.

(Reporting by Varun Hebbalalu and Nandan Mandayam in Bengaluru; Editing by Abinaya Vijayaraghavan and Janane Venkatraman)