Vehicles sales improve in February, but not strong enough to offset annual decline – report
The National Association of Automobile Manufacturers South Africa released Namibia’s new vehicle sales numbers for February 2019, showing moderate improvement by 11.3% to 741 units.
The monthly increase in vehicle sales comes from an upsurge in light commercial vehicles and passenger vehicles by 16.6% and 4.2% to 351 units and 344 units, respectively, in February 2019. Overall total commercial vehicles (light, medium and heavy commercial) increased by 0.2% to 371 units in February 2019.
However, Indileni Nanghonga, Analyst at Simonis Storms Securities said this increase it’s not strong enough to offset the firm’s view of an annual decline of 4.5% to 11 500.
“Our view is that the monthly increase is not substantial enough to retain momentum in the vehicle industry. On an annual basis, vehicle sales continue to contract by 27.7% to 741 units, marking the highest contraction in 21 months,” Nanghonga said.
There is a general slowdown in vehicles sales globally, and closer to home, South Africa’s vehicle sales also contracted by 6.5% annually in February 2019, re-enforcing the pressure faced by the industry. The same downturn in the Namibian market.
“It is of interest to note that government’s budget allocation towards vehicles is expected to remain at N$11.9 million in the financial period of 2019/20 before it decreases to N$10 million in 2020/21. With government scaling down the budget for vehicles expenditure coupled with stressed private consumers (indicated by a decline in instalment credit) we remain pessimistic about the growth outlook for the motor vehicle industry. We noted a rapid uptake of second-hand vehicles (evident in the number of auctions and aggressive advertising in the second-hand market), and more consumers opting to increase mileage on their vehicles (holding onto their cars much longer),” Nanghonga added.