During 2022 a total of 10,923 units were sold, 15.9% higher than the 9,427 units that were sold in 2021 and exceeding the 10,415 units sold in 2019, a vehicle sales report released by Simonis Storm last week reveals.
Annual sales were split 51% for passenger vehicles and 49% commercial vehicles.
This was despite Namibia being in an interest rate hiking cycle and high commodity prices and shipping costs, together with a weak Rand exchange rate, leading to an average of 5% increase in vehicle prices across different brands during 2022.
“This provides an indication of some job recovery that took place in 2022 (supported by medical aid data from Namfisa) and that spending power remains surprisingly resilient to an extent as car brands across different income levels on average recorded an increase in sales during 2022. From our selection of brands in Figure 5, higher-end brands increased their sales by 24.1% y/y on average with Land Rover standing out, having increased sales by 127.9% y/y in 2022 (most likely a from a low base). With regards to medium- to lower-end brands, sales increased by 12.6% y/y, with Haval (up 24.9%) recording the largest increase in units sold,” the research firm noted.
Vehicle sales rose on an annual basis (up 29.7% y/y), but declined on a monthly basis (down 8.6% m/m) in December 2022. A total of 952 units were sold in December 2022 – below the 6-month moving average – compared to 1,045 units sold in November 2022. Medium commercial vehicles were the main contributor to the annual increase , rising 94.4% y/y in December 2022, followed by heavy commercial vehicles (up 40.0% y/y) and passenger vehicles (up 39.2% y/y).
“The improvement in vehicle sales correlates with positive growth rates recorded in the wholesale and retail sector throughout 2022, expanding by 0.8% y/y, 0.6% y/y and 10.2% y/y in 1Q2022, 2Q2022 and 3Q2022 respectively. Consumption spending has been somewhat resilient last year, despite inflationary pressures and rising interest rates when comparing vehicle sales in 2022 to 2021.
“An improvement in vehicle sales also came about despite local dealerships battling with supply chain issues which has led to major backlogs in customer orders. Also, banks are viewed as being risk averse, given that numerous car loan applications were rejected for customers trying to buy vehicles from lowto high-end brands. Indeed, vehicle sales would have been higher in the absence of these constraints,” Simonis Storm said further stating in the report that with the expectation that supply of new vehicles from overseas factories should improve from mid-2023 onwards, together with a continued momentum in spending from last year, they do expect vehicle sales to remain on an upward trend in 2023.
“Commercial vehicles in particular could see improved sales figures owing to favourable mining and transport sector growth forecasts for 2023, as well as construction of green hydrogen projects at the coast. Commodity prices are expected to continue decreasing until mid-2023 (before China reopens its economy), shipping costs are likely to continue on a downward trend and we see the Rand trading at stronger levels due to a weaker US dollar in the first half of this year. In addition, we do expect the interest rate hiking cycle to come to an end by 1Q2023 in Namibia. These factors combined should hopefully put a limit on new vehicle price increases to some extent and maintain affordability for local customers,” concluded the firm.