Importation of new vehicles set to be compounded by global production challenges
Importation of vehicles locally is expected to remain challenging for most of 2022 as a result of ongoing global production challenges, according to a Namibian investment research firm, Simonis Storm Securities (SSS).
COVID-19 variant infections among global plant workers and lockdown rules remain a risk to production in 2022, the investment research firm said in a new vehicle sales report released this week.
In terms of local sales, according to the National Association of Automobile Manufacturers of South Africa, a total of 734 vehicles were sold during December 2021, compared to 755 sold in the prior month and 704 sold a year ago,
SSS said instalment credit extension from commercial banks is another constraint on local vehicle sales as local dealers have alluded to losing numerous deals due to customers not obtaining financing from banks. This is evidenced by instalment and leasing credit contracting by -4.6% y/y and -0.3% y/y for businesses and households in 2021.
“However, demand from local customers will remain supportive of seeing similar to higher vehicle sales in 2022 compared with 2021, as we know that local demand exceeds supply from our discussions with various local dealerships,” SSS added.
Meanwhile, SSS said, consumers, will likely face less availability in the second-hand market during the first half of 2022.
“We are seeing fewer trade-ins taking place in Namibia and local dealers continue to struggle in sourcing second-hand units from South Africa. Hence, prices of first- and second-hand vehicles will remain on an upward trajectory for 2022 due to constrained supply, increased costs being passed through by auto manufacturers and a weaker Rand exchange rate which we expect,” they concluded.