The company had sold 1,68,971 units in July last year, Bajaj Auto Ltd said in a statement.
Total two-wheeler sales during the month also declined marginally at 1,68,731 units compared with 1,69,971 units in the same period a year ago, it added.
BAL's exports, however, went up by 1.98 per cent to 68,585 units in July from 67,253 units a year ago.
The company's total vehicle sales stood at 1,92,835 units last month compared to 1,93,704 units in the same period a year ago, the statement said.
"Bajaj plans to step up its domestic motorcycle production by about 25 per cent in August, 2009, in response to the strong demand," the company said, without giving details.
The company sold about 10,000 units of its new 100cc Discover DTS-Si since its launch on July 17. It is expecting the sales to double in August.