Category Archives: Vehicle Sales

Vehicle sales slowed considerably in April with a total of 946 vehicles were sold, a 32.5% m/m decrease from the 1,402 vehicles sold in March and 36.7% lower than April 2016 when 1,495 vehicles were sold. The slowdown is also evident in the 12 month cumulative sales, as the last twelve months saw 15.0% less vehicles being sold relative to the preceding twelve months. Year to date 4,409 new vehicles have been purchased, the lowest level since 2011. Of these, 2,044 were passenger vehicles, 2,172 were light commercial vehicles, and 193 were medium or heavy commercial vehicles.

Vehicle sales have been contracting on a year on year basis since mid-2015 and year-to-date sales are well below the previous five years. The slowdown is evident in both the passenger and commercial segments, the former having contracted 39.9% y/y while the latter is down by 34.1% y/y. The 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 40.6% m/m to 409 vehicles in April, while commercial vehicles sales declined by 24.8% m/m to 714. Of the 537 commercial automobiles sold, 489 were classified as light, 12 as medium and 36 as heavy. The sharp month on month decrease seems to seasonal in nature, as vehicle sales are normally higher in March on average. However, the last month is well below the average sales normally seen in April.

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 32% and 31% of the market respectively. They were followed by Ford and Nissan at 5% each, while the rest of the passenger vehicle market was shared by several competitors.

Toyota also remains the leader in light commercial vehicle sales with 49% of the market, followed by Nissan at 16%. 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 29% of the market followed by Hino at 28%. In the heavy and extra heavy category, Mercedes and Scania have sold the most vehicles, claiming 26% of the market each.

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.

A total of 1,402 vehicles were sold in March, a 21.8% m/m increase from the 1,151 vehicles sold in February, but 9.6% lower than March 2016 when 1,551 vehicles were sold. Year to date 3,463 vehicles have been sold, of which 1,635 were passenger vehicles, 1,683 light commercial vehicles, and 145 medium and heavy commercial vehicles. Compared to the first quarter of previous years, this is below the numbers for the last five years.

Vehicle sales have been contracting on a year on year basis since mid-2015 and this trend continued unabated in March. Although the last month saw a month on month uptick in the number of vehicles sold, cumulatively still off to a very slow start. The slowdown is evident in both the passenger and commercial segments, the former having contracted 5.5% y/y while the latter is down by 13.2% y/y. On a twelve-month cumulative basis, vehicle sales are down 19.7%. It is quite concerning that the heavy and extra heavy commercial segments have seen some of the lowest first quarter sales in nearly ten years, which would indicate that businesses are not investing in new equipment.

Passenger vehicle sales increased by 26.2% m/m to 688 vehicles in March, while commercial vehicles sales increased by 17.8% m/m to 714. Of the 714 commercial automobiles sold, 642 were classified as light, 23 as medium and 49 as heavy. The sharp month on month increase seems to be a seasonal trend, as vehicle sales are normally higher in March on average. However, it remains a positive sign that sales have been in line with previous years for the month of March.

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 32% of the market each. They were followed by Ford at 7% and Mercedes at 5%, while the rest of the passenger vehicle market was shared by several competitors.

Toyota also remains the leader in light commercial vehicle sales with 47% of the market, followed by Nissan at 17%. Ford and Isuzu claimed 15% and 10% of the number of light commercial vehicles sold in 2017. In the heavy and extra heavy category, Mercedes and Scania have sold the most vehicles, claiming 30% and 25% 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 for into 2017. This is due to four main factors. Firstly, Lower government spending, specifically on capital assets will have a direct effect on the number of vehicles sold. The latest budget confirms that this will be the case 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. Secondly, slower economic growth means that consumers will have lower disposable incomes on which to spend on capital assets. Thirdly, the bank of Namibia has implemented the Credit Agreement Act, which requires a deposit of 10% on all vehicle loans and limits repayment periods to 54 months. This has reduced the number of people eligible for credit to purchase vehicles. Lastly, the possibility of higher interest rates following the credit downgrade in South Africa, might deter long term borrowing, weighing further on demand.

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.