The Korean government has temporarily cut special excise taxes on passenger cars until the end of June to spur demand.

How much the 'luxury taxes' will fall depends on engine displacement, the Korea Times said.

The tax rate for cars with an engine capacity of at least 2,000cc will fall from 10% to 7% while those for a capacity of between 1,000cc and 2,000cc will dip from 5% to 3.5%.