New vehicle sales in Indonesia increased by 7.9% to 66,755 units in June, compared with 61,891 units in the same month of last year, according to local reports citing data from industry association Gaikindo.

Compared with the previous month's 94,100 sales, the market was down by 29% due to the annual Lebaran holidays [the popular name for the Islamic Eid al-Fitr festival and one of the major national holidays in the country – ed]. 

Toyota sold an estimated 24,400 vehicles last month, followed by Daihatsu with 11,800 units.

In the first half of 2017, total vehicle sales increased by 6.3% to 534,285 units, from 502,531 units in the same period of last year.

Separately, local reports also suggest Indonesia plans to cut the luxury tax on saloon type passenger cars as it looks to attract foreign direct investment (FDI) in this segment and generate opportunities for export.

Three box saloons, or sedan type cars, represent a very small proportion of annual new vehicle sales in the country (1.3% last year according to industry association Gaikindo), because of higher taxes and also due to consumer preference for seven seat MPVs, SUVs and hatchbacks.

Other types of passenger vehicles accounted for 80% of total vehicle demand last year with most being compact and mid-sized MPVs.

Industry minister Airlangga Hartarto was quoted as saying the luxury tax on saloon cars would be lowered from 30% to 10%, in line with other passenger vehicles.