By Hilary Mare
ACCORDING to Simonis and Storm Securities, vehicle sales have picked up on a month-to-month basis, owing to commencement of the tourism season.
Simonis and Storm Securities economist Frans Uusiku also noted that monthly vehicle sales were supported by stronger demand in the rental market.
“Meanwhile, we note that global vehicle production and sales increases, in tandem, were supported by a stable production of platinum globally, and by extension in South Africa. We thus remain bullish on platinum.
“Although we believe that consumers remain under pressure in Namibia and also in South Africa, we foresee a sustained rebound in vehicle sales in the near term, on account of increased tourist spending and the resultant pass-through effects of the expected loosening of monetary policies in the two jurisdictions,” he added.
However, the securities firm noted that Namibian vehicle sales for June 2017 contracted by 23.2 percent (year-on-year) to 1 220 units, compared to a contraction of 13.2 percent in June 2016.
The month-on-month rebound comes as a relief, after the local motor vehicle industry has faced a frustrating year, owing to government budgetary cuts under its fiscal consolidation regime.
Government has vowed to cut its vehicle expenditure from N$139 113 000 to N$45 104 000 in the 2017/18 financial year.
Essentially, goods and services expenditure is expected to decline by 21 percent, while capital expenditure is expected to decrease by 15 percent (34 percent compared to 2015/16).
Earlier this month, prior to the Standard Bank Auto Show, Standard Bank Head of Vehicle and Asset Finance (VAF), Wim Lotter, expressed concern over how vehicle sales had declined, due to the current economic challenges.
“Although we find ourselves in a challenging economic environment this year, with new vehicle sales declining by N$300 million in the first quarter of 2017, our decline is still less than that of some of our competitors. We can only survive in this tough market, with solid partnerships like those we have forged with each one of you (the automotive industry representatives and dealers),” he said.
Standard Bank Head of Personal and Business Banking, Mercia Geises, concurred with Lotter, adding that the auto show would aid in driving dealership sales.
“We take full cognisance of the fact that the current hard economic times have affected all sectors in our country, and the vehicle industry is no exception. We would like to provide you with the opportunity to drive your sales during these tough times, by continuing to host the much-anticipated auto show,” she said to dealers.
According to the National Association of Automobile Manufacturers of South Africa (NAAMSA), vehicle sales declined by 21.8 percent in 2016, 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 (private sector credit extension), rising vehicle costs, the introduction of the carbon emission tax and an overall slowdown in the economy,” the association said in a report earlier this year.
Confidente. Lifting the Lid. Copyright © 2015