Jakarta – Car ownership is not for the faint-hearted in Indonesia – fuel supplies are erratic, the roads are often awful and price tags on cars are almost hilariously high.

Even so, new car sales are overtaking expectations despite the nation's economy being stuck on the hard shoulder.

A new family car can cost up to 280 million rupiah (S$52,000) – an extraordinary sum in a country where most people struggle to survive on a few dollars a day.

But the first half of this year saw sales rise sharply, with 226,155 new vehicles hitting the highway. The figure represents a 32 per cent increase over the same period last year, said Indonesia's Automotive Industries Association (AIA). It also estimates that car sales will grow to 500,000 units next year from the 420,000 estimated for this year.

Exports are also increasing, with a steady trickle of vehicles making their way to Indonesia's neighbours, reversing a tide of imports from the regional automotive powerhouses of Thailand and Malaysia.

While the figures are unlikely to set the global motoring industry back on its heels, they do mark a significant shift of gear for Indonesia, which has admitted it is losing the regional race to recover from the 1997 Asian financial crisis.

Industry experts said the secret of car sales, expected to maintain their momentum in coming months even as the economy palpitates over the Sept 20 presidential poll, lies in Indonesian idiosyncracies, chiefly consumer pride.

For middle-class Indonesians, owning a new car is a common way of maintaining prestige in the face of financial hardship, said Mr Jonfis Fandy, an executive of Japanese car firm Honda's local joint venture. He said the extraordinarily high resale value of used cars was also a factor, encouraging many people to invest in vehicle ownership rather than commit cash to low-interest bank accounts.

The availability of low-cost loans meant consumers were also willing to stretch their budgets by the slim margin needed to get their hands on the steering-wheel of a new instead of a second-hand vehicle.

Although sales figures dipped slightly last month, AIA chairman Bambang Trisulo said this was merely a precursor to a run this month when new models hit the roads, and to further increases next year.