New vehicle sales remain under pressure – analyst
The June fuel price increase, contracting installment credit and the depressed consumer environment will continue to put pressure on the new vehicle sales numbers, according to researchers.
Indileni Nanghonga, analyst at Simonis Storms Securities, noted that globally, vehicle sales are being challenged by trade tension and uncertainty around Brexit as many car manufacturers (EU and UK) have scaled down on production.
“Similarly, the same trend can be observed in South Africa with new vehicle sales continuing to disappoint, recording a -5.7% y-o-y to 40506 units in May 2019. Our view is that Namibia will follow the same trend, therefore, we reiterate our forecast of an annual decline in total vehicle sales of 4.5% to 11500,” Nanghonga said.
May 2019 vehicle sale numbers released by the National Association of Automobile Manufacturers South Africa show that the worst performing brands in Namibia were Nissan, Honda, Great Wall Motors, UD trucks and Hyundai, declining by 54.3%, 45.2%, 42%, 33.3% and 24.8% to 200, 17, 47, 2 and 103 units, respectively year-to-date. Despite the drop in the volumes of the top 4 brands, Toyota remains the biggest with a 43.3% market share followed by Volkswagen, 18.3% and Ford with a 6.1% market share.
Meanwhile, the report also shows that overall vehicle sales rose by 13.9% to 1055 units in May, following a decline of 1.1% seen in April 2019.
“Vehicles channelled through dealers have increased by 9.4% to 838 units in May 2019, which is 33% below the historic average (9 years) units of 1256. This is an indication that the local dealers remain under strain. Moreover, vehicles channelled through rental increased by 35% to 216 units, the highest increase over the last 10 months. We attribute the increase in rental cars to the current tourism season. We treat this with caution as this is a seasonal effect and doesn’t provide a true reflection of the vehicle industry,” Nanghonga explained.