By Hilary Mare
THE National Association of A u t o m o b i l e Manufacturers of South Africa (NAAMSA) released Namibia’s monthly new vehicle sales statistics for the month of October 2016 yesterday and vehicle sales contracted by 7.5 percent m-o-m to 1,157 units compared to an 8.5 percent contraction recorded in the prior month.
On an annual basis, total vehicle sales contracted by 34.5 percent compared to -15.5 percent registered in the prior year.
“The monthly contraction in vehicle sales can be ascribed to a decline across all vehicle categories. The new vehicle sales number recorded in October was the lowest level since February 2013 when 1 140 units were recorded,” Indileni Nanghonga, trainee economist at Simonis Storm Securities explained.
Light Commercial Vehicles continued its downward trend for four consecutive months and contracted by 5.5 percent m-o-m to 646 units in September 2016. Furthermore, medium commercial and extra heavy vehicles also declined by 28.6 percent m-o-m and 5.7 percent m-o-m to 15 and 33 units, respectively. Heavy commercial vehicles and buses remained constant at three and 0 units, respectively.
“October 2016 marks the highest contraction in the growth of new vehicle sales (34.5 percent y-o-y). Furthermore, Passenger Vehicles recorded the lowest number of units in October 2016 since 456 units were recorded in August 2011,” added Nanghonga.
The suggested aggregate value of new vehicle sales stood at N$472.0 million during October 2016 compared to N$496.8million recorded in the prior month. The value of new vehicles sold during the month under review contracted by 5.0 percent m-o-m which is less than the 7.5 percent contraction in the number of vehicle sales. This illustrates that the decline in vehicles sales does not necessarily translate into lower vehicle prices as new vehicle prices are largely driven by the USDZAR. On an annual basis, the suggested value contracted by 21.0 percent y-o-y to N$472.0million compared to N$597.7million in the prior year. The slow downward movement in the value of vehicles can be attributed to the weaker Rand.
“We expect new vehicle sales to continue its downward trend due to the current economic backdrop and state of the Fiscus. the increase in the fuel levy by the ministry of finance coupled with the newly introduced carbon emissions tax and slowing Private Sector Credit Extension (PSCE) will continue to subdue vehicles sales in the country. During the midterm budget review, the Minister of Finance suspended 13.5 percent of the amount allocated to vehicles to N$147 million. This suggests a slowdown in the consumption of new vehicle sales by the Government and we expect vehicle sales to remain low for the remainder of the year,” concludes Nanghonga.
Confidente. Lifting the Lid. Copyright © 2015