LATEST statistics have revealed that the motor sales industry has been feeling the pinch of the tough economic environment as vehicle sales have been at their lowest since the year 2006.
According to statistics from IJG Namibia, 12-month cumulative new vehicle sales have been declining since December 2015, amounting to 11,721 at the end of January – a decline of 48.3% from the peak of 22,664 cumulative new vehicle sales recorded in April 2015.
IJG stated that while in January new vehicle sales are historically low when compared to other months, 2019’s January figure was the lowest since 2006.
IJG further stated that the prospects for new vehicle sales remains dim in the short- to medium-term as government remains committed to fiscal consolidation and the economy remains in a recession, putting pressure on demand and investment.
A total of 666 new vehicles were sold in January, which represents an 8.8% m/m decrease from the 730 vehicles sold in December, and a drop of 21.7% from the 851 new vehicles sold in January 2018.
In addition, 330 new passenger vehicles were sold during January, 6.5% higher than the 310 passenger vehicle sales sold in December. From a year-on-year perspective, however, last month alone, new passenger vehicle sales were 18.3% lower than the 404 sold a year ago.
Passenger vehicle sales have been impacted by amendments to the Credit Act that requires tighter credit conditions, as well as reduced government expenditure and depressed consumer confidence in the current economic climate.
Commercial vehicle sales declined to 336 units in January, representing a contraction of 20.0% m/m and 24.8% y/y. During the month, 301 light commercial vehicles, 14 medium commercial vehicles, and 21 heavy commercial vehicles were sold. On an annual basis, light commercial sales have dropped by 21.2%, medium commercial sales rose by 27.3%, and heavy and extra heavy sales have declined by 22.2%. On a twelve-month cumulative basis, light commercial vehicle sales fell 11.2% y/y, while medium commercial vehicle sales rose 11.4% y/y, and heavy commercial vehicle sales dropped 7.3% y/y.
Also sharing comment on the decline of vehicle sales, Capricorn Asset Management, Chief Economist, Floris Bergh, stated that the Low vehicle sales is another indicator that confirms the malaise that the Namibian economy finds itself in.
He, however, stated that the 6 month moving average (a type of trend line) has been ticking up since about the middle of last year.
“It could yet prove to be a harbinger of the proverbial “light at the end of the tunnel”. Generally, commentators and analysts, ourselves included, expects 2019 to be a better year than 2018, but not by much,“ Bergh said.