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DUE to declining global car production, Namibian dealers are likely to continue struggling to source stock as the limited new vehicles are sent to alternative bigger markets.
According to an analysis by economic commentators Simonis Storm Securities, new vehicle sales in Namibia continued to slow in October 2022, contracting for a second consecutive month.
Vehicle sales declined by 2,2% month-on-month in October 2022, compared to -3,2% m/m in September 2022.
However, new vehicle sales are still trending above sales levels of 2021, as 996 units were sold in October 2022, compared to 717 units in October 2021, recording a 38,9% rise year-on-year, according to figures provided by the National Association of Automobile Manufacturers of South Africa.
Heavy duty and light commercial vehicles recorded the largest annual increases in units sold, said the analysts.
Declining global car production, attributed mainly to the Russia-Ukraine war and the Covid-19 pandemic, is keeping a constraint on local new vehicle sales, which are showing an improvement from sales levels recorded in the last two years.
According to Simonis, new vehicles purchased by individuals are likely dominated by cash sales, given that household instalment credit growth remains lacklustre.
Instalment credit has grown by a meagre 0,9% on average year-to-date, compared to an average 13% corporate instalment growth during the same period, says Simonis.
Between early 2020 and 2022, just over N$20 billion in claims have been paid out from life insurance policies from local insurance companies.
“This could explain the rise in cash sales, which some local dealers have pointed out,” said the analysts.
Simonis said global metal prices have decreased by 23% since the peak in March 2022, and are expected to remain subdued due to decreasing demand evidenced by declining factory orders in various industrial nations.
“We forecast the rand to average 16,53 against the US dollar for most of 2023, slightly stronger than levels seen in 2022. Together with lower base and precious metal prices, we believe that new vehicle prices could show signs of moderating in 2023, providing local consumers some relief in the automotive market,” said Simonis.
While individual customers have been affected by the availability of new vehicle sales on the market, with some being on the waiting lists for long periods, corporate entities have also been impacted by the limited availability of new vehicles.
Although the tourism sector is reportedly on the road to recovery to its pre-pandemic levels, some operators have been hampered by a lack of new vehicles for safe and reliable self-drives by foreign tourists.
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