Vehicle rental agencies, of which the main business focus is the tourism sector, purchased only three new units in December 2023 – a month during which a total of 841 new vehicles were sold.
The 841 units represent a decline from the 1 169 recorded in November 2023 and the 952 sold in December 2022.
According to an analysis by economic commentators Simonis Storm Securities, the December 2023 vehicle sales experienced a contraction of 11,7% year on year (y/y), compared to December 2022, and a 28,1% month-on-month fall from the sales in November 2023.
“This downturn in sales is the second-lowest monthly sales figure recorded for the entire 2023,” the analysts say.
According to Simonis, during the entirety of 2023, the automotive market in Namibia witnessed a significant uptrend in new vehicle sales.
The year ended with a total of 12 780 new units being sold, marking an increase of 17,0% y/y from the 10 923 units sold in 2022.
“This total sales volume is particularly notable as it represents the highest total of new units sold since 2017 and this trend is noteworthy, considering the economic environment that is characterised by high-interest rates and inflation,” Simonis says.
The majority of vehicles sold in 2023 were commercial, therefore the resilience of commercial vehicle sales in such challenging economic conditions may indicate a robust underlying demand within certain sectors of the economy, potentially driven by factors such as increased commercial activities or infrastructural developments.
In December 2023, the sales of new passenger vehicles showed a decline, with 426 new units being sold.
This represents a decline from the 566 units sold in November 2023 and the 504 units sold in December 2022.
The sales of light commercial vehicles remained relatively stable, albeit with a slight decrease.
December 2023 saw 371 units sold, a marginal reduction from the previous year by just two units.
However, the medium commercial vehicle segment experienced a notable slump, with sales dipping by 60% y/y to only 14 units, compared to the same month in 2022.
Heavy and extra-heavy commercial vehicles also encountered declines. Sales for heavy commercial vehicles dropped by 14% y/y, from seven in December 2022 to six units, while extra-heavy commercial vehicles saw a 50% y/y decrease, falling from 30 in December 2022 to 15 units.
Contrastingly, the bus category witnessed an upswing. The month recorded the sale of nine new units, which is a significant increase of 200% y/y from the three units old in December 2022 and the four units sold in November 2023.
Despite these fluctuations in various categories, 2023 overall marked a positive period for Namibia’s automotive industry.
The industry’s performance surpassed pre-Covid-19 levels, indicating a robust recovery and resilience in the face of challenging economic conditions.
Simonis says the overall new vehicle sales figure for the year provides a modest ray of optimism.
The upturn in vehicle sales aligns with the growth rate observed in the wholesale and retail sector throughout 2023.
Despite inflationary pressures and elevated interest rates, consumer consumption has demonstrated a degree of resilience in 2023.
Looking ahead, there is potential for enhanced sales figures in the commercial vehicle segment, driven by optimistic growth forecasts in the mining and transport sectors for 2024, along with the construction of green hydrogen projects.
Additionally, there is anticipation of an interest rate cut in the second half of 2024 in Namibia.
These factors collectively contribute to a cautiously optimistic outlook for the automotive industry in the coming months.
“This anticipated monetary policy adjustment could further stimulate consumer and business spending, thereby positively influencing vehicle sales,” says Simonis.
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