Author Archives: IJGResearch

NCPI – June 2017

By | | ,
Comments Off on NCPI – June 2017

Annual inflation declined to 6.1% y/y in June, 0.2% y/y lower than in May, while prices increased by 0.1% m/m, similar to the price level increase witnessed in May. The slowdown in annual inflation was caused mainly by moderation in the price inflation levels of transport and alcoholic beverages and tobacco. Of the twelve basket items, four saw a higher annual inflation rate than the previous month, three remained relatively unchanged, while five categories saw lower rates of price increases. Prices for goods increased by 4.5% y/y while prices for services grew by 8.2% y/y.

Housing and utilities remains the largest contributor to annual inflation due to its large weighting in the basket and the effect of irregularly high rental increases of 9.7% in January. This category increased by 9.8% y/y but remained approximately unchanged month on month. Annual inflation for rental payments for dwelling remained at 9.6% in June and will likely remain this high for the rest of the year. Furthermore, the City of Windhoek has put into effect a 13% tariff increase on water consumption, effective the 1st of June, with a request for a 10% electricity tariff increase submitted to the Electricity Control Board (ECB) pending approval. With the increases in utilities now passed on to the consumer, we believe that this will most likely put upward pressure on this basket category going forward. We continue to expect the housing and utilities basket category to underpin overall inflation.

Food and non-alcoholic beverages, the second largest basket item in weighting, was the second largest contributor to annual inflation, accounting for 0.8% of the total inflation figure. Food and non-alcoholic beverage prices increased by 4.6% y/y, ticking up from the 3.6% recorded in May, still considerably below the peak of 13.2% witnessed in January. Bread and cereal prices have decreased by 2.8% y/y, while the price of vegetables decreased by 2.1% y/y and fruits now 6.3% more expensive on an annual basis.

Transport was the third largest contributor to annual inflation, accounting for 0.7% of the total 6.1% inflation figure. Transport prices increased by 5.0% y/y but remained flat month on month, with the yearly increase driven largely by the 5.8% y/y increase in the cost of operating personal transport equipment.

The alcohol and tobacco category displayed increases of 3.0% y/y with a decrease of 0.3% m/m in June versus 3.3% y/y and 0.1% m/m in May. The main driver in this basket category remains alcohol prices which increased by 3.2% y/y while tobacco was up 2.3% y/y. Inflation in this category remains very subdued despite the announcement of increased sin taxes in March.

Namibian inflation continues to decrease at a faster pace than was anticipated at the start of the year. A strengthening rand and a strong decline in food prices has seen inflation moderating substantially. Increased utilities consumption tariffs imposed by the City of Windhoek this month should change the dynamic towards a slight uptick in inflation going forward, this happening within the basket that is the largest contributor towards inflation.

New Vehicle Sales – June 2017

By | | ,
Comments Off on New Vehicle Sales – June 2017

Vehicle sales remained lacklustre in June with 1,120 vehicles sold. This is a 24.0% decrease from the 1,606 vehicles sold in June of 2016 and a 3.5% m/m increase on the 1,179 vehicles sold in May. Year to date, 6,832 vehicles have been sold, 23.4% less than the corresponding period in 2016, making 2017 the slowest year for car sales since 2012. Of the 6,832 vehicles sold this year, 3,045 were passenger vehicles, 3,427 were light commercial vehicles, and 360 were medium or heavy commercial vehicles.

The declining trend in vehicle sales has been well established, contracting on a year on year basis since mid-2015. Passenger sales have decreased by 19.3% y/y, to 519 cars, while commercial sales have declined by 27.2% y/y. Of the 701 commercial automobiles sold in June: 595 were classified as light, 23 as medium and 83 as heavy. The uptick in heavy commercial vehicles, a 66.0% y/y increase on June 2016, is a positive signal as increased capital spending is a sign of improving business confidence. However, light and medium commercial vehicles remain in contractionary territory decreasing by 32.9% and 11.5% respectively.

On a twelve-month cumulative basis, vehicle sales have declined by 24.1%. Instalment credit, which is mainly used to finance vehicle purchases, has also been slowing considerably. Instalment credit advances grew by only 1.3% y/y in May, the lowest level on our records.

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 37% and 27% of the market respectively. They were followed by Ford and Mercedes at 6% and 4% respectively, while the rest of the passenger vehicle market continues to be shared by several competitors. Toyota also remains the leader in light commercial vehicle sales with 47% of the market, followed by Nissan at 15%. Ford and Isuzu claimed 12% and 10% of the number of light commercial vehicles sold in 2017.

Iveco is the leader of medium commercial vehicles with 31% of the market followed by Hino at 30%. In the heavy and extra heavy category, Scania and Mercedes have sold the most vehicles, claiming 27% and 17% of the market respectively. However, after a strong month, UD Trucks came in at a close third, cornering 16% of the number of vehicles sold in 2017.

The Bottom Line

Vehicle sales remained sluggish in June continuing the trend of the last two years. The reasons for the slowdown in sales have been well documented, lower government spending on capital assets, slower economic growth and disposable incomes as well as the credit agreement act have been identified as the main dampers on new vehicles sold. However, with some green shoots starting to appear in the local economy and the encouraging uptick in heavy commercial vehicle sales, as well as base effects, the current climate may improve over the coming year.