Category Archives: Economic Research

Economic Research

New Vehicle Sales – February 2023

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A total of 1,103 new vehicles were sold in February, 294 more than the upward revised figure of January, and represents a 24.9% y/y increase from the 883 new vehicles sold in February 2023. 1,912 new vehicles were sold during the first two months of 2023, of which 1,035 were passenger vehicles, 783 light commercial vehicles, and 94 medium- and heavy commercial vehicles. By comparison, the first two months of 2022 saw 1,591 new vehicles sold. 2023 is thus off to a strong start compared to last year. On a 12-month cumulative basis, new vehicle sales rose by 19.2% y/y to 11,244.

559 New passenger vehicles were sold during February, an increase of 17.4% m/m and 27.3% y/y. This is the highest monthly number of new passenger vehicle sales since July 2018. On a 12-month cumulative basis, new passenger vehicle sales have increased by 26.2% y/y to 5,763. The 1,035 new passenger vehicles sold so far this year marks the highest number of year-to-date sales by February since 2016. Compared to the same period in 2022, the year-to-date figure for February has increased by 189 units or 22.3% y/y.

February was a similarly strong month for new commercial vehicle sales, with the 544 units sold during the month the highest monthly figure since March 2021. New commercial vehicle sales rose 63.4% m/m and 22.5% y/y in February. The month saw 486 light commercial vehicles, 25 medium commercial vehicles, and 33 heavy commercial vehicles sold. On a year-on-year basis, light commercial sales rose by 32.8% y/y, medium commercial vehicles grew by 56.3% y/y, and heavy and extra heavy vehicle sales declined by 46.8% y/y from a high base in February 2022. All sub-categories, bar heavy- and extra heavy vehicles, have recorded growth on a twelve-month cumulative basis with light commercial vehicle sales increasing by 16.6% y/y, medium commercial vehicles sale rising by 12.4% y/y, while heavy commercial vehicle sales contracted by 16.7% y/y.

Toyota enjoy a strong lead in the new passenger vehicle sales segment, capturing 37.8% of the segment sales year-to-date, followed by Volkswagen with 24.3% of the market share. Both manufacturers have started the year off on a strong foot that will make it difficult for other manufacturers to catch up. They were followed by Kia and Suzuki with 8.3% and 5.4% of the market, respectively, leaving the remaining 24.3% of the market to other brands.

On a year-to-date basis, Toyota remained the leader in the light commercial vehicle space with a dominant 57.2% market share. Ford came in second place claiming a market share of 8.2%. Mercedes and Toyota continued to collectively lead the medium commercial vehicle market, each with a market share of 27.0%. Mercedes also claimed the top spot of heavy and extra-heavy commercial vehicles with a market share of 28.1%. 

The Bottom Line  

February’s new vehicle sales figure of 1,103 was the highest number since November 2018 when 1,197 new vehicles were sold. The month-on-month increase was mainly driven by the 211 unit increase in commercial vehicle sales, although the 83 unit increase in passenger vehicle sales is by no means insignificant. As mentioned in last month’s report, the 12-month new vehicle sales cumulative figure is trending at levels last seen in 2019. February’s 12-month cumulative figure is still down 50.4% from the peak of 22,664 recorded in April 2015, but the strong momentum in both the passenger- and commercial vehicle segments is encouraging to see. 

PSCE – January 2023

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Private sector credit (PSCE) increased by N$121.2 million or 0.11% m/m in January, bringing the cumulative credit outstanding to N$110.7 billion on a normalised basis (removing the interbank swaps accounted in non-resident private sector claims). On a year-on-year basis, PSCE grew by 2.6%, compared to the 4.2% y/y growth recorded in December. Over the past 12 months, N$2.79 billion worth of credit was extended to the private sector, a 23.6% increase from the N$2.26 billion issued over the same period a year ago. Individuals took up N$3.06 billion worth of credit, while corporates decreased their borrowings by N$270.3 billion.

Credit Extension to Individuals

Credit extended to individuals rose by 0.6% m/m and 4.9% y/y in January. All sub-categories registered increases on a month-on-month basis, with the monthly growth again primarily driven by an increase in ‘Other loans and advances’ (which is made up of credit card debt and personal- and term loans). The sub-category grew by 1.8% m/m and 17.3%, the highest annual growth since June 2020. Overdraft facilities to individuals rose by 0.9% m/m but fell by 3.1% y/y. Mortgage loans posted 0.3% m/m growth for a third consecutive month, with year-on-year growth remaining steady at 2.8% y/y. Instalment credit grew by 0.2% m/m and 3.1% y/y.

Credit Extension to Corporates

Credit extended to corporates contracted by 0.6% m/m and y/y, the first year-on-year contraction in this category since December 2021. Credit uptake by corporates has been very subdued over the past five months. Only overdraft facilities to corporates grew on a month-on-month basis. The sub-category grew by 4.6% m/m, but fell 9.0% y/y. Mortgage loans contracted on an annual basis for a fourth consecutive month, falling by 2.4% m/m and 4.7% y/y. Instalment credit fell by 1.3% m/m, but remains up by 12.7% y/y.

Banking Sector Liquidity 

The overall liquidity position of Namibia’s commercial banks fell by N$585.1 million to an average of N$5.25 billion in January and ended the month at N$5.92 billion. Despite the strong liquidity position, some banks made use of the repo facility, with the balance coming in at N$380.0 million. The Bank of Namibia (BoN) noted that the decline is in line with historic trends of corporate tax payments and the “holiday season”, with declines usually observed in January to mid-March before accelerated government spending aids increases just before the end of the fiscal year.

Money Supply and Reserves

Broad Money Supply (M2) rose by N$1.24 billion or 1.0% y/y in January, according to the BoN’s latest monetary statistics. The money supply decreased by 0.2% m/m and now stands at N$129.7 billion. The stock of international reserves fell by 3.5% m/m to N$46.3 billion in January. The BoN attributed the decline to net commercial bank outflows during the month. 

Outlook

PSCE growth is off to a subdued start in 2023, with the year-on-year growth figure of 2.6% the slowest since March last year. The slow growth is largely due to low credit uptake by corporates, which has generally been lacklustre since June last year, and it is now starting to reflect in the year-on-year growth figures. This indicates that corporates are not borrowing money to invest in fixed capital projects to expand their operations, an indication of low business confidence.

In January and throughout the past year, individuals have shown a more encouraging uptake of credit compared to corporates, with growth being driven by both short-term ‘other loans and advances’ as well as mortgage loans.