…As carbon emission tax begins to take toll
By Hilary Mare
ACCORDING to the National Association of Automobile Manufacturers of South Africa (NAAMSA) new vehicle sales statistics for Namibia for the month of July 2016 contracted by 1.2 percent m-o-m to 1 570 units compared to a 3.5 percent growth recorded in the prior month.
On an annual basis, total vehicle sales contracted by 18.8 percent y-o-y compared to positive growth of 0.7 percent registered in the prior year. The monthly contraction in vehicle sales can be ascribed to a decline in the number of units sold of Light Commercial Vehicles (-3.2 percent m-o-m), Medium Commercial Vehicles (-46.2 percent m-o-m) and Heavy Commercial Vehicles (-50 percent m-o-m). In contrast, Passenger Vehicles ticked up by 1.6 percent m-o-m, while Extra Heavy Vehicles grew by 37.5 percent. “We believe that the implemented carbon emission tax early in July 2016 has partially contributed to the decline in the volume of new vehicle sales. The tax is N$40 per gram carbon dioxide/ km emission exceeding 140g and is only applicable to certain vehicles most notably passenger vehicles, Sport Utility Vehicles (SUVs) and double cab vehicles with Gross Vehicle Mass (GVM) not exceeding 5 tonnes,” Indileni Nanghonga a trainee economist at Simonis Storm Securities said. Light Commercial Vehicles contracted by 3.2 percent m-o-m and 17.6 percent y-o-y to 842 units in July. Medium Commercial and Heavy Commercial also contracted by 46.2 percent and 50.0 percent, respectively during July 2016. Furthermore, Passenger vehicles grew by 1.5 percent m-o-m but contracted by 16.5 percent y-o-y to 653 units during the month under review. Over all, the total vehicle sales year to date contracted by 19.3 percent to 10 437 units compared to 12 934 units recorded the same time last year. The suggested aggregate value of new vehicle sales stood at N$6.1 billion during July 2016 compared to N$6.3 billion recorded in the prior month. The value of new vehicle sales year to date contracted by 11.0 percent to N$39.7 billion compared to N$44.6 bn in the prior year. Insights from some heavy vehicle dealerships indicate that most of the trucks are used by the construction and mining sectors. Interestingly, a large amount of imported trucks are not accounted for in the NAAMSA data, as they are imported directly from China. “One of the main concerns towards increasing vehicle costs was the weakening Rand in the beginning of 2016. The Rand appreciated by 15.7 percent year to date ending the 17th of August 2016. “The consumer still remains under pressure but the appreciation of the Rand is likely to ease the burden if the Rand remains at current levels going forward. Private Sector Credit Extension continues to slow and inflation remains at high levels (7.0 percent in July 2016). Furthermore, Bank of Namibia maintained the Repo rate unchanged at 7.0 percent mainly to continue supporting the country’s economic growth,” added Nanghonga.
Confidente. Lifting the Lid. Copyright © 2015