1,742 new vehicles were sold in Namibia during April, after record sales of 2,150 in March. Sales rose 4.4% y/y coming off a high base as both March 2015 and April 2014 saw elevated sales levels. Month on month vehicle sales fell by 19.0% after being up 10.4% in March. The lower monthly numbers, compared to March, were on account of a 29.7% decrease in commercial vehicle sales and a 4.4% decline in passenger vehicle sales. At this point, total sales for the year stand at 7,555 vehicles, up 10.4% on the comparable period of 2014.
The 12-month cumulative measure increased further to 22,664 and is now 23.8% higher than a year ago, up 0.3% from the previous month. In our view the growth in the 12-month cumulative number is largely a result of a lower base in the previous year.
Sales of passenger vehicles decreased by 4.4% m/m to 870 vehicles sold during the month, down from the previous month’s 10.8% increase. On an annual basis, passenger vehicle sales rose, increasing 8.3% y/y after increasing 0.2% in March. Commercial vehicle sales fell 29.7% to a sales figure of 872 vehicles, down from 1,240 sold in March. On an annual basis, commercial vehicle sales continued to increased, up by 0.8% in April, which was due to higher sales numbers of light commercial vehicles on the back of government tenders coming through.
Once again Toyota and Volkswagen dominated the passenger vehicle market, claiming almost 60% between them. 33.4% of all passenger vehicles sold during April were Toyotas while Volkswagen made up 26.0% of the market. Toyota once again was the market leader in light commercial vehicles, having the lion’s share of sales at 43.8% of the market, followed by Nissan at 17.9%, and Ford in 3rd place.
The Bottom Line
The strong increase in vehicle sales is attributed to a number of factors, namely the on-going expansive fiscal and monetary positions of the Ministry of Finance and Bank of Namibia, as well as purchase of vehicles by Government.
Continued spending by the mining sector has helped drive vehicle sales during the past year while real wage growth and the strong local economy have bolstered sales. The strong state of the Namibian consumer can thus be well illustrated by vehicle sales figures. However as no cars are manufactured in Namibia, all new vehicles sold must be imported. Given the small, open, nature of the Namibian economy, this puts major pressure on the country’s balance of payments, which pressure cannot be sustained long-term.April vehicle sales are expected to be lower than March due in part to the high base and historically April sales are softer.