By Hilary Mare
IT was a quiet December for local car dealers as new vehicle sales statistics for that month reveal a contraction of 19.1 percent m-o-m and 31.7 percent y-o-y.
According to the National Association of Automobile Manufacturers of South Africa (NAAMSA) last year, vehicle sales declined by 21.8 percent to 16 598 units.
“This sharp decline in vehicle sales in 2016 was led by a combination of factors ranging from a slowdown in PSCE, rising vehicle costs, the introduction of the carbon emission tax and an overall slowdown in the economy,” Purvance Heuer, director: research and securities at Simonis and Storm explained.
Passenger vehicles declined by 17.8 percent m-o-m to 440 units in December compared to a 16.3 percent increase recorded in the prior month. In addition, light commercial, medium commercial, heavy commercial and extra heavy commercial vehicles also dropped by 15.8 percent m-o-m, 40 percent m-o-m, 71.4 percent m-o-m and 65.1 percent m-o-m, respectively. On an annual basis, light commercial, passenger, and heavy commercial vehicles continued to contract by 32.2 percent, 28.3 percent and 85.7 percent, respectively.
Furthermore, medium commercial and extra heavy commercial vehicles also fell victim to a negative annual growth by 28.0 percent and 25.0 percent in December 2016 after recording positive increases of 25.0 percent and 34.5 percent, respectively in November 2016.
The suggested aggregate value of new vehicle sales stood at N$429.5million during December 2016 compared to N$537.2million recorded in the prior month. The value of new vehicle sales during the month under review declined by 20.0 percent m-o-m and by 25.6 percent y-o-y.
“We attribute the decline in the aggregated value to the 66.0 percent contraction in the heavy and extra heavy vehicles,” added Heuer.
In 2016, total new vehicle sales were 16 598 units. This is down 22.8 percent compared to 19 661 units during the same time 2015. In 2014 new vehicle sales recorded was 21 718. With oil prices expected to be between US$50 and US$60 in 2017, we expect overall vehicle sales to be under pressure.
Namibia’s fuel hiking cycle is already up and running as the Ministry of Mines and Energy increased petrol and diesel prices by 20 and 30 cents per litre in January 2017. Transport inflation is likely to affect the purchases of both new and second hand vehicles in the country going into 2017.
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