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.