In May, compact car manufacturer Daihatsu announced it had sold 14,151 vehicles in Indonesia, its highest number of monthly sales on record.

While these numbers only constitute a modest month-over-month increase from the 13,473 vehicles Daihatsu sold in April, May's auto sales represent a massive 31% increase from the 10,803 units it sold last May.

Furthermore, during the first five months of this year, Daihatsu sold 66,723 cars, a 23.9% increase over the 53,854 units it sold during the same period in 2011.

"Indonesia is still the prima donna for global automotive investors , due to its huge market and stable economy," said Suprijanto, the Ministry of Industry's director general of transportation and high technology industry, explaining big investment plans by Daihatsu, as well as other Japanese competitors like Honda, Nissan, Suzuki, Isuzu, and Mitsubishi.

"There are some concerns about infrastructure, but they look at long-term potential. Moreover, their current capacity is already full, so they need to expand," Suprijanto added.

In response to this uptick in demand, Daihatsu recently announced it would invest US$ 233.3 million to boost its current production capacity by 100,000 vehicles annually to 430,000 units. Meanwhile, Toyota said in February it would spend US$ 534.4 million to build two factories in order double its manufacturing output to 240,000 vehicles.

Daihatsu has 25.6% share of the Indonesian market, second only to Toyota's nearly 40%. Indonesians are attracted to Daihatsu's vehicles due to its line of relatively inexpensive, small cars that dominate the archipelago's congested roads. Particularly popular are its bestselling Xenia mini multipurpose vehicle, which made up 46.3% of Daihatsu's May sales. The model sells for about US$ 16,000.