1,163 New vehicles were sold in September, an increase of 6.3% m/m, but down 3.6% y/y. Year-to-date 10,435 new vehicles have been sold, a 19.7% on last year. On a rolling 12-month basis 13,957 new vehicles have been sold in Namibia, down 22.8% from September 2016, and down 38.4% from peak 12-month cumulative number of vehicles sales in April 2015. On a calendar year basis 2014 was the peak in total new vehicle sales, with decreases in each subsequent year. Currently 2017 is on track to deliver new vehicle sales similar to numbers last seen in 2012.
A total of 443 new passenger vehicles were sold during September, up 10.8% m/m. Year-to-date passenger sales rose to 4,421, down 19.4% compared to the number sold by September last year. On a rolling 12-month basis passenger vehicle sales are at their lowest level since April 2012. Commercial vehicle sales reflect a similar picture, down 20.0% year-to-date and 23.6% on a rolling 12-month basis. A total of 720 new commercial vehicles were sold in September and 6,014 have been sold year-to-date. Light commercial vehicle sales are down 35.5% from their peak, slightly less than the 40.8% that passenger vehicle sales are down. Medium commercial vehicle sales are down 50.5% from their peak, while heavy commercial vehicles are down 46.4% since peaking in December 2015.
Outstanding installment credit has contracted on a year-on-year basis in each of the last three months as customers purchase less new vehicles. Credit extension to corporates, a leading economic indicator, continues to slow which points to further economic stagnation which is likely to show in vehicle sales figures leading up to the end of the year. The IJG business climate monitor, while showing some signs of improvement in the economy, continues to be in recessionary territory also pointing to further depressed vehicle sales figures going forward.
Toyota continues to lead the market for new vehicle sales with 35% of the passenger vehicle market and 47.9% of the light commercial market this year. Volkswagen holds the second place with 24.9% of passenger vehicle sales, while Nissan takes second place in the light commercial vehicles category with 16.3% of sales this year. Ford retains the third position in both passenger and light commercial new vehicle sales on a year to date basis. Hino leads the medium commercial vehicle category with 34.8% of sales while Scania has 32% of the heavy and extra-heavy commercial vehicle market cornered year to date.
The Bottom Line
Cumulative vehicle sales continue to contract on a rolling 12-month basis, and year-to-date vehicle sales figures are currently below 2012 levels. This is a reflection of depressed business and consumer confidence, as well as slowed government spending on new vehicles. Tighter credit conditions have only exacerbated the above conditions. The current interest rate environment is precarious with South Africa teetering on the edge of a local currency credit ratings downgrade which, should it take place, will see rapid currency depreciation. This will likely be followed by interest rate hikes which, along with higher prices for vehicles, will put further pressure on consumers. However, should positive political outcomes be seen in South Africa, there is scope for currency appreciation and further monetary easing, bringing relief to Namibian consumers too, and kick-starting the economy.