Tokyo, Nov 2 (IANS): Sales of new cars in Japan retreated 4.1 percent year-on-year in October as potential buyers of minicars were dissuaded by an increase in ownership tax implemented earlier this year, official data showed on Monday.

The Japan Light Motor Vehicle and Motorcycle Association said sales dropped 10.8 percent to 139,200 units, in the recording period, to mark a 10th consecutive monthly year-on-year drop in sales with an engine displacement of less than 660 cc, Xinhua reported.

The Automobile Dealers Association said separately, however, that domestic sales of new cars, trucks and buses, excluding minicars, increased 0.2 percent from a year earlier in October to 240,889 units, following a three percent slide booked in the previous month.

Demand for new vehicles has been zapped by both a sales tax hike and the new mini vehicle ownership tax, the associations said.

The monthly auto sales statistics remain a key gauge for economists here as they are the first data series released each month pertaining to consumer spending.