Category Archives: Vehicle Sales

A total of 1,151 vehicles were sold in February, a 26.5% m/m increase from the 910 vehicles sold in January, but 14.9% lower than in February 2016 when 1,352 vehicles were sold. Year to date 2,061 vehicles have been sold, 947 passenger vehicles, 1,041 light commercial vehicles, and 73 medium and heavy commercial vehicles. Compared to the first two months of previous years, this is well below the number of vehicles sold in any year for the last five years.

Vehicle sales have been contracting on a year on year basis since mid-2015. The slowdown has been felt in both passenger and commercial vehicles, with passenger vehicle sales down 10.1% y/y and commercial vehicle sales down 29.4% y/y. Within the commercial vehicle segments the light commercial category, which makes up the bulk of sales, has decreased by 14.7% y/y, while medium commercial vehicles sales have decreased by 50% y/y and heavy commercial vehicle sales have also decreased by 50% y/y. Heavy commercial vehicle sales have dropped to multi-year lows which can be seen as a drop in investor or business confidence.

Passenger vehicle sales increased by 35.6% m/m to 545 vehicles in February, while commercial vehicles sales increased by 19.3% m/m to 606. Of the 606 commercial automobiles sold, 563 were classified as light, 18 as medium and 25 as heavy. The total number of passenger and commercial vehicles sold in 2016 were 7,006 and 9,592 respectively and we are likely to see lower numbers this calendar year.

Year to date Toyota and Volkswagen continue to hold their market share in the passenger vehicle market based on the number of new vehicles sold, claiming 33% and 23% of the market respectively. They were followed by Nissan at 8% and Ford at 7%, 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 16%. Isuzu and Ford claimed 12% and 11% of the number of light commercial vehicles sold in 2017, very much in line with the market share observed in 2016. In the heavy category, Mercedes and Hino started off the year by selling 9 and 8 heavy or extra heavy vehicles respectively, or roughly 23% and 20% of the number of heavy commercial vehicles sold this year.

The Bottom Line

From mid-2015, the new vehicle market in Namibia has been in a state of decline and this trend seems to be continuing as we enter 2017. The reduction in government spending had a direct and indirect effect on the demand for new vehicles, both direct orders from government and the weaker economic environment have reduced the demand for capital goods and this is clearly visible in the data. The latest budget confirms that this will be the case going forward, as only N$45.1 million has been budgeted for the purchase of vehicles in the 2017/18 fiscal year’s development budget, a large cut from the N$382.2 million spent in 2015/16 and N$139.1 million spent in 2016/17. Furthermore, amendments to the Credit Agreement Act (which requires a deposit of 10% on all vehicle loans and limits repayment periods to 54 months) have reduced the availability of credit used to purchase these capital goods. We expect the slowdown in new vehicle sales to continue into 2017 as the effects of these policies and a generally weaker economic environment weigh on new vehicle demand.

A total of 910 vehicles were sold in January, a 14.6% m/m drop from the 1,066 vehicles sold in December, and 34.0% lower than January 2016 when 1,379 vehicles were sold. For the calendar year of 2016, 16,598 new vehicles were sold, down 21.9% from the 21,246 vehicles sold over the previous calendar year. 2017 is thus off to a slow start as illustrated by the lowest monthly sales number since December 2012.

Vehicle sales have been contracting on a year on year basis since mid-2015. The slowdown has been felt in both passenger and commercial vehicles, with passenger vehicle sales down 26.4% y/y and commercial vehicle sales down 39.0%. Within the commercial vehicle segments the light commercial category, which makes up the bulk of sales, has decreased by 39.4% y/y, while medium commercial vehicles sales have decreased by 25% y/y and heavy commercial vehicle sales have decreased by 37.5% y/y.

Passenger vehicle sales decreased by 8.6% m/m to 402 vehicles in January, while commercial vehicles sales decreased by 18.8% m/m to 508. Of the 508 commercial automobiles sold, 478 were classified as light, 15 as medium and 15 as heavy commercial. The total number of passenger and commercial vehicles sold in 2016 were 7,006 and 9,592 respectively and we are likely to see even lower numbers this calendar year.

In 2016 Toyota and Volkswagen dominated the passenger vehicle market based on the number of new vehicles sold. Toyota and Volkswagen claimed 29% and 28% of the market respectively. They were followed by Ford at 7% and Mercedes at 5%, while the rest of the passenger vehicle market was shared by several competitors. The start of this year points to this trend continuing, and Toyota and Volkswagen have again taken the lead in terms of number of vehicles sold.

Toyota also remains the leader in light commercial vehicle sales with 49% of the market, followed by Nissan at 16%. Isuzu and Ford claimed 13% and 11% of the number of light commercial vehicles sold in January, very much in line with the market share observed in 2016. In the heavy category, Hino and Mercedes started off the year by selling 4 heavy or extra heavy vehicles each, or roughly 27% of the number of heavy commercial vehicles sold over the month. Heavy commercial vehicle sales have dropped to multi-year lows which can be seen as a drop in investor or business confidence.

The Bottom Line

From mid-2015, the new vehicle market in Namibia has been in a state of decline and this trend seems to be continuing as we enter 2017. The reduction in government spending had a direct and indirect effect on the demand for new vehicles, both direct orders from government and the weaker economic environment have reduced the demand for capital goods and this is clearly visible in the data.

Furthermore, higher interest rates and amendments to the Credit Agreement Act (which requires a deposit of 10% on all vehicle loans and limits repayment periods to 54 months) have reduced the availability of credit used to purchase these capital goods. We expect the slowdown in new vehicle sales to continue into 2017 as the full effect of interest rate increases and cuts in public spending filter through to all areas of the economy.

A total of 1,066 vehicles were sold in December, a 19.1% m/m drop from the 1,317 vehicles sold in November, and 32.7% lower than December 2015 when 1,583 vehicles were sold. For the calendar year of 2016, 16,598 new vehicles were sold, down 21.9% from the 21,246 vehicles sold over the previous calendar year. Vehicle sales have been lower than both 2015 and 2014, but still slightly ahead of 2013 levels.

Vehicle sales have been contracting on a year on year basis since mid-2015. The slowdown has been felt in both passenger and commercial vehicles, with passenger vehicle sales down 28.3% y/y and commercial vehicle sales down 35.4%. Within the commercial vehicle segments the light commercial category, which makes up the bulk of sales, has decreased by 32.2% y/y, while medium commercial vehicles sales have decreased by 28% y/y and heavy commercial vehicle sales have decreased by 76.4% y/y.

Passenger vehicle sales decreased by 17.8% m/m to 440 vehicles in December, while commercial vehicles sales decreased by 19.9% m/m to 626. This brings the total number of passenger and commercial vehicles sold in 2016 to 7,006 and 9,592 respectively. Of the 9,592 commercial automobiles sold, 8,838 were classified as light, 277 as medium and 477 as heavy commercial.

In 2016 Toyota and Volkswagen dominated the passenger vehicle market based on the number of new vehicles sold. Toyota and Volkswagen claimed 29% and 28% of the market respectively. They were followed by Ford at 7% and Mercedes at 5%. The rest of the passenger vehicle market remains very fragmented.

Toyota also remains the leader in light commercial vehicle sales with 48% of the market, followed by Nissan at 16%. Ford and Isuzu each claimed 11% of the number of light commercial vehicles sold in 2016. In the heavy category, Scania is the largest seller, commanding 43% of the market share.

The Bottom Line

Throughout the period of 2014 all the way to mid-2015, we saw robust growth in vehicle sales, which was driven by a strong consumer base supported by expansionary fiscal and monetary policy and real wage growth. However, 2016 was not a particularly good year for new vehicles as December numbers brought the year to a disappointing close. The slowdown was driven by two main factors. Firstly, the reduction in government spending had a direct and indirect effect on the demand for new vehicles. Both direct orders from government and the weaker economic environment have reduced the demand for capital goods. Secondly, higher interest rates and amendments to the Credit Agreement Act (which requires a deposit of 10% on all vehicle loans and limits repayment periods to 54 months) have reduced the availability of credit used to purchase these capital goods.

We expect the slowdown to continue into 2017. The full effect of interest rate increases normally takes 18 to 24 months to filter through to all areas of the economy. Additionally, lower government spending on capital expenditure should also put pressure on vehicle sales for the foreseeable future.