New vehicle sales in Indonesia increased by just under 2% to 103,520 units in June, from 101,746 units a year earlier, according to industry association Gaikindo.

The positive market performance reflects continued strong domestic economic growth and also aggressive sales and marketing campaigns by dealers. The market is coming up against increasing headwinds, however, such as tighter bank lending and the recent hike in subsidised fuel prices, which is expected to have dampened consumer sentiment.

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First-half sales were up by 12.3% at 601,200 units, compared with 535,261 units in the same period of 2012.

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