WINDHOEK – Namibian consumers showed a huge public appetite for new vehicles in July, with those with deep pockets forking out hundreds of thousands of Namibia dollars for the Mercedes Benz brand, which was the luxury make that sold the most new passenger vehicles in the country in that month. Those with lesser budgets turned to Toyota – the country’s overall most bought vehicle in July – and Volkswagen at number three.
Analysts however predict that Namibia is poised to experience a significant increase in the sale of second-hand vehicles in the months to come, largely because of government revision of the restrictions of the import of second-hand vehicles. The restrictions have been revised to allow Namibians to import vehicles as old as eight years, as opposed to the previous ban on vehicles older than five years.
Latest statistics from the National Association of Automobile Manufacturers of South Africa (Naamsa) show that the Mercedes Benz is the favourite of the well-heeled Namibian motorist with 49 units sold in July. Toyota is still the top-bought passenger vehicle with 228 cars sold in July, up from 193 vehicles the previous month, followed by Volkswagen of which 175 vehicles were sold. Volkswagen sales, even though strong, declined from 196 vehicles sold the previous month.
Naamsa figures show that sales for new vehicles in Namibia are already on an increase with the sales for July being the highest since the beginning of this year. July experienced a sharp increase in vehicle sales with a total of 1 597 vehicles sold, an increase of 13,1 percent from an increase of 0,6 percent experienced in June. The July percentage increase is the highest monthly increase since January this year. Year on year growth stands at 13,6 percent.
“This fulfils market expectations of increased confidence in the sector, mainly attributed to favourable pricing from dealers whose supply has been robust,” says analyst Daniel Kavishe at Simonis Storm Securities, a local brokerage and market research firm.
However, the ongoing strike at South African vehicle manufacturing plants is bound to affect new sales in the months to come, which could influence customers to opt for imported vehicles.
For extra-heavy vehicles, market confidence has improved, mainly because of strong construction activity taking place in the country, specifically activity within local mines. “Our outlook for the next coming months remains positive in this sector,” says Kavishe.
Year to date vehicle sales stand at 9 170 units, with passenger vehicles representing 48,6 percent of total vehicle sales while light commercial vehicles representing 46,7 percent of total vehicle sales. Volkswagen and Toyota sold the most vehicles with 216 and 547 units sold respectively in July.
Sales from car dealers in the market are quite high with a month on month increase of 17,8 percent and a year on year increase of 13,9 percent.
According to car dealers in the market, government purchases the bulk of their fleet through a tendering process. This implies that government purchases include both direct purchases, which are recorded by Naamsa, and indirect purchases, which are captured within the dealer numbers.
Over the past few months, government tenders to dealers have increased hence the staggering figures in vehicle sales for the past three months. This factor in conjunction with the low interest rate environment and a growing tourism sector performance has resulted in high numbers recorded in vehicle sales for the months of May, June and July.
Overall vehicle sales amongst the popular German brands showed that demand for luxury cars is still ever on the rise. Audi sold 19 units, BMW sold 15 units and Mercedes Benz recorded 55 units, which represents the best sales figures for Mercedes over the past two years.
“With the recent wave of strikes in South Africa, we take a more cautious stance in terms of market expectations. If the strikes remain incessant it is our view and that of local dealers that overall vehicle purchases will decline. Depending on the severity of the strike and its longevity, the outlook for the rest of the year will be revised downwards with fewer vehicles sales being reported as compared to last year. We fear that the strikes will affect not only new vehicle sales figures but may also dampen vehicle parts availability,” says Kavishe.
The Simonis Storm Securities’ analysis shows that dealers increased their market share to 93 percent over the month of July, as government direct purchases increased sales to seven units from five units in June. Rental companies are still exhibiting strong activity within their sector despite a 39 percent drop in vehicle purchases over the month of July. The decline in sales may be indicative of the tourism season drawing closer to the end.
By Staff Reporter