Vehicle sales remained lacklustre in May with 1,118 vehicles were sold. This is a 27.2% y/y decrease from the 1,535 vehicles sold in May 2016 but 18.2% m/m higher than the 946 vehicles sold in April. Year to date 5,527 vehicles have been sold, 24.4% less than the corresponding period in 2016. Of these, 2,534 were passenger vehicles, 2,748 were light commercial vehicles, and 245 were medium or heavy commercial vehicles. These are the lowest year to date numbers in the last five years.
Vehicle sales have been contracting on a year on year basis since mid-2015. The slowdown remains evident in both the passenger and commercial segments, the former having contracted 26.8% y/y while the latter is down by 27.5% y/y. A slow sales numbers in the medium and heavy commercial vehicles remain worrisome, as it indicates a lack of business confidence which may be due to either unwillingness or inability to invest into businesses.
Passenger vehicle sales decreased by 19.8% m/m to 490 vehicles in May, while commercial vehicles sales increased by 16.9% m/m to 628. Of the 628 commercial automobiles sold, 576 were classified as light, 23 as medium and 29 as heavy. The sharp month on month increase was largely due to the low base set in April. However, the last month is still below the average sales normally seen in May.
Year to date Toyota and Volkswagen continue to hold a strong market share in the passenger vehicle market based on the number of new vehicles sold, claiming 34% and 29% of the market respectively. They were followed by Ford and Mercedes at 6% and 4% respectively, while the rest of the passenger vehicle market was shared by several competitors.
Toyota also remains the leader in light commercial vehicle sales with 48% of the market, followed by Nissan at 17%. Ford and Isuzu claimed 13% and 10% of the number of light commercial vehicles sold in 2017. Iveco is the leader of medium commercial vehicles with 32% of the market followed by Hino at 28%. In the heavy and extra heavy category, Scania and Mercedes have sold the most vehicles, claiming 26% and 24% of the market respectively.
The Bottom Line
From mid-2015, the new vehicle market in Namibia has been in a state of decline and it seems this trend will continue well into 2017. Lower government spending, specifically on capital assets have had a direct effect on the number of vehicles sold. Additionally, slower economic growth means that consumers will have lower disposable incomes and many consumers have been reigning in their spending as a result.
Furthermore, the Credit Agreement Act, which was implemented in August of 2016, prescribes a deposit of 10% on all vehicle loans and limits repayment periods to 54 months. This has reduced the number of people eligible for vehicle financing.