Instalment credit on vehicle sales remains sluggish
Instalment credit, which is mainly used to finance vehicle purchases, has slowed considerably despite the fact that instalment credit increased by 0.5% month-on-month (m/m) in July, this followed six months of consecutive m/m declines, bringing the annual growth to -1.4% year on year.
According to IJG Research Namibia, the Private Sector Credit Extension (PSCE) growth figures prove testament to waning consumer and business confidence and an already stretched consumer as instalment credit remains sluggish.
Meanwhile, new vehicle sales of 1,094 units were recorded in August, with sales falling by 19.9% from the 1,366 new vehicles sold in August 2016. On a m/m basis, new vehicle sales fell by 18.7%, with August recording 252 less in sales than July.
Toyota and Volkswagen continue to maintain their strong hold on the passenger vehicle market. Based on the number of new vehicles sold, claiming 36% and 25% of the market respectively. They were followed by Ford and Mercedes at 7% and 4% respectively, while the rest of the passenger vehicle market continues to be shared by several competitors.
“The amendments to the Credit Agreement Act had a significant effect on consumer spending as well. Bearing in mind that government is still in its fiscal consolidation cycle with no with little to no plans to increase capital expenditure in sight. Vehicle sales showed signs of slight improvement the previous three months before slumping by 18.7% m/m, and is likely to remain subdued going forward,” IJG stated.