Honda Motor has stopped selling its Mobilio compact MPV in India due to low demand, three years after its initial market launch.

The model was designed specifically to meet customer requirements in emerging markets, particularly in South-east Asia, but it does not meet new safety regulations scheduled to come into effect in India later this year.

"In order to continue selling the vehicle in India we would need to invest heavily in upgrades" Yoichiro Ueno, CEO of Honda Cars India, told local reporters.

Honda Motor India ceased local production earlier of the model earlier in the year and stocks were completed exhausted back in May.

Local reports suggest the company will decide in the next two months whether to introduce its newer compact MPV model, the BR-V.

In the last full financial year, ending in March 2017, Honda reported an 18% drop in Indian sales to 157,000 units compared with more than 9% growth for the market as a whole. The company is looking to lift its performance with new model launches including the latest version of the City compact sedan and the WR-V sub-compact MPV.