Government tenders drive vehicle sales
1,918 new vehicles were sold in Namibia during July, once again the highest vehicle sales figure recorded in the 19-year history of available statistics. The July record reflects an increase of 1.8% month on month, off an already high base. The higher monthly figures were caused by an up-tick in commercial vehicle sales, despite passenger vehicle sales slightly falling, according to IJG Securities in their latest review of the automobile market.
July sales continued increasing after the seasonal slowdown in April and May, and the monthly figures expanded to beat the previous record sales level as set in June. On an annual basis, growth accelerated to 31.1%, falling from 44.9% year on year in June on account of base effects. At this point, 12,196 vehicles have been sold so far in 2014, up 46.9% on the comparable period of 2013, in line with IJG projections.
The 12-month cumulative measure increased further to 19,154 and is now 40.5% higher than a year ago and up 2.4% from the previous month. The increase in the 12-month cumulative figure is a combination of a low base and strong results in the current period, IJG reported.
Sales of passenger vehicles slightly decreased in July, falling by 0.8% month on month to 821 units sold but sales are still 21.8% higher than a year ago. Commercial vehicle sales increased 3.9% month on month to a record 1,097 units sold,on account of higher numbers recorded in the light and medium categories, said IJG.
Toyota and Volkswagen continued to dominate the passenger market with the two brands claiming 32.9% and 17.8% of sales respectively. Toyota once again was the market leader in light commercial vehicles, having the lion’s share of sales at 49.4% of the market, followed by Nissan at 13.0%.
According to IJG, the strong increase in vehicle sales is attributed to a number of factors, namely the on-going expansive fiscal and monetary positions of the Ministry of Finance and the Bank of Namibia, as well as purchases by the government. The Ministry of Finance has allocated N$984.5 million to vehicle purchases in the 2014/15 National Budget, a N$517.8 million [or a 111%] increase on the vehicle expenditure budget for the 2013/14 financial year.
“We expect the strong growth trend to continue, however sales may slow towards the end of the year as monetary policy tightening is likely to continue. Nevertheless, government tenders yet to be delivered will maintain the momentum of vehicle sales through 2014” concluded IJG.