Category Archives: Economic Research

Economic Research

New Vehicle Sales – June 2022

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866 new vehicles were sold in June, which is 96 more than were sold in May and represents a 2.7% y/y increase from the 843 vehicles sold in June 2021. The first half of 2022 has observed a total of 5,181 new vehicle sales, of which 2,668 were passenger vehicles, 2,175 light commercial vehicles, and 338 medium and heavy commercial vehicles. By comparison, the first half of 2021 saw 4,893 new vehicles sold. On a twelve-month cumulative basis, a total of 9,716 new vehicles were sold at the end of June, representing an 8.1% y/y increase from the 8,989 sold over the comparable period a year ago.

A total of 427 new passenger vehicles were sold during June, an increase of 5.4% m/m from the 405 sold in May, but a 0.7% y/y decrease from the 430 vehicles sold in June 2021. On a 12-month cumulative basis, new passenger vehicle sales have increased by 23.2% y/y to 4,875. Year-to-date, new passenger vehicles sales exceeded 2020 and 2021 levels, with 2,668 new passenger vehicles sold so far this year, a 74.5% and 17.2% increase from the new passenger vehicles sold over the same period in 2020 and 2021, respectively.

A total of 439 new commercial vehicles were sold in June, representing an increase of 20.3% m/m and 6.3% y/y. While all three subcategories recorded better sales than in May, the month-on-month increase was primarily driven by a rebound in light commercial vehicle sales of 21.4% m/m. There was a noticeably drop in Toyota’s light commercial vehicle sales in both May and June following the temporary closure of the production plant in KwaZulu-Natal. Despite this, light commercial vehicle sales were still in line with the monthly average for the year as customers switched to other brands who were able to deliver new light commercial vehicles. Medium- and heavy commercial vehicle sales fell 31.6% y/y and 19.0% y/y respectively, while light commercial vehicles sales rose 13.3% y/y. On a twelve-month cumulative basis, light commercial vehicles sales fell by 4.3% y/y to 4,135, medium commercial vehicles fell by 6.3% y/y to 178, while heavy commercial vehicles increased by 1.5% y/y to 528.

Toyota continues to lead the new passenger vehicle sales segment with 31.7% of the segment sales year-to-date, followed by Volkswagen with 20.4% of the market share. The two top brands maintained their large gap over the rest of the market with Kia and Suzuki following with 9.0% and 7.8% of the market, respectively, leaving the remaining 31.0% of the market to other brands.

On a year-to-date basis, Toyota maintained its dominance in the light commercial vehicle space with a 48.8% market share, followed by Nissan with 13.6% of the market. Hino continues to lead the medium commercial vehicle segment with 29.3% of sales year-to-date, closely followed by Mercedes-Benz with 24.0% of the market share. Scania remained the leader in the heavy and extra-heavy commercial vehicle segment with 33.1% of the market share year-to-date.

The Bottom Line

In context, June’s new vehicle sales figure was in line with the monthly average for the year. On a 12-month cumulative basis, new passenger vehicle sales have rebounded to the pre-pandemic levels seen in 2019 but seems unlikely to exceed it meaningfully in the short-term. New commercial vehicle sales continue to hover around the 4,800 level on a 12-month cumulative basis, where it has been for the past two years now, indicating stagnant demand in this sector. The last time cumulative commercial vehicle sales were at these levels was in 2006.

PSCE – May 2022

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Overall

Private sector credit (PSCE) rose by N$351.3 million or 0.3% m/m in May, the slowest month-on-month increase so far in 2022, bringing the cumulative credit outstanding to N$116.6 billion. On a year-on-year basis, private sector credit grew by 11.0% y/y in May, compared to the 10.5% y/y growth recorded in April. Normalising for the large increases in claims on non-resident private sectors recorded between January and March, sees PSCE growth at 3.9% y/y in May. On a 12-month cumulative basis N$11.6 billion worth of credit was extended to the private sector. Of this cumulative issuance, individuals took up N$1.48 billion, corporates increased their borrowings by N$3.21 billion and the non-resident private sectors took up N$6.86 billion.

Credit Extension to Individuals

Credit extended to individuals increased by 0.3% m/m and 2.4% y/y in May. Mortgage loans to individuals posted growth of 0.2% m/m and 2.4% y/y. Overdraft facilities to individuals grew by 0.4% m/m but contracted by 1.7% y/y. Other loans and advances (consisting of credit card debt, personal- and term loans) rose by 0.8% m/m and 5.2% y/y.

Credit Extension to Corporates

Credit extended to corporates grew by 7.4% y/y in May, following the 5.9% y/y increase recorded in April. On a month-on-month basis, credit extension to corporates rose 0.2% m/m in May. The growth was primarily driven by an increase in ‘other loans and advances’ of 4.5% m/m and 18.2% y/y. Instalment credit by corporates rose by 1.4% m/m and 16.6% y/y, albeit from a low base. Mortgage loans contracted by 1.2% m/m but rose 3.6% y/y, while overdrafts fell by 4.9% m/m and 5.2% y/y.

Banking Sector Liquidity

The overall liquidity position of the commercial banks rose significantly in May, rising by N$778.3 million to an average of N$3.79 billion. The BoN partly ascribed the increase to an increase in diamond sales proceeds during the month. The repo balance fell to N$438.9 million at the end of the month, after ending April at N$1.97 billion.

Reserves and Money Supply

Broad money supply (M2) rose by N$5.8 billion or 4.8% y/y to N$127.6 billion, according to the BoN’s latest monetary statistics. Foreign reserve balances rose by 2.0% m/m or N$879.2 million to a total of N$43.9 billion. The rise was attributed to revaluation gains in the form of foreign currency investments during the period.

Outlook

Although May’s PSCE growth figure was the slowest on a month-on-month basis so far this year, it was the fifth consecutive month Namibian PSCE grew. As noted earlier in this report, normalising for the large increases in claims on non-resident private sectors recorded between January and March, sees PSCE growth at 3.9% y/y in May. Overall credit demand, and the willingness of commercial banks to extend credit thus remain low. Corporate credit growth continues to be driven by up the uptake of short-term credit, whereas the growth in credit to individuals was largely driven by the uptake of mortgage loans over the last 12 months.