Wesbank, the asset financing division of First National Bank Namibia, says it is concerned about the dwindling sales of new vehicles in the country.
According to Elmarie Cilliers, executive officer at WesBank Namibia, new vehicle sales have declined 14.1 percent year-on-year and although a turnaround is expected by 2018, she warned that some businesses will not weather the storm.
“We will see the stronger ones taking over or buying out smaller businesses. Businesses without cash flow will suffer or not survive. We foresee the used car market will improve and customers will again opt for a good second-hand vehicle, rather than the expensive new one.
“Wise borrowing to clients will be essential to ensure you assist and not just postpone the process. We will see customers cut down on expenses and less spending will take place. Should South Africa be downgraded it will have an influence on Namibia. I believe that good rain will influence our economy positively and that the market will slowly start to normalise,” said Cilliers.
She noted that WesBank continues to drive outstanding service and provides value addition to customers countrywide in this time. “Dealers do subsidise deposits or portion of deposits with discount strategies and it becomes clear that people who do not have a deposit will either borrow or make use of the discount strategies. “The Credit Act has thus had an impact on vehicle sales, especially on the lower end of the market. Dealers are also under pressure with some having to sell excess stock at cost price, or even at a loss and that does not make good business sense,” Cilliers added.