Vehicle sales in March 2023 recorded the highest number of units sold since July 2017, Simonis Storm has revealed in its monthly vehicle sales report.
In July 2017, 1,280 units were sold, compared to 1,226 units in March 2023.
Vehicle sales were primarily driven by the usual, with passenger and light commercial vehicles accounting for 94.2% of total units sold in March 2023. However, medium-commercial vehicles recorded the largest annual increase in March 2023, followed by extra-heavy commercial and light commercial.
YTD, sales have increased by 28.8%. Although 1Q2015 still holds the record of highest vehicle sales, 1Q2023 is the best performing first quarter since 2018. In 1Q2023, 3,134 units were sold, growing by 18.5% q/q from 2,645 units in 4Q2022.
The wholesale and retail sector increased by 6% y/y in 2022, which is the second consecutive year that this sector recorded an expansion following four years of economic contractions. Total annual vehicle sales tend to co-move with growth in the wholesale and retail sector.
“We expect vehicle sales to continue trending upward and above levels recorded in the last two years. This is likely to contribute positively to the wholesale and retail sector for 2023,” Simonis Storm said.
On the other hand, instalment and leasing credit for corporates and household increased by 11.6% y/y and 2.8% y/y respectively in February 2023.
“We presume that demand from local transport companies is driving corporate instalment credit growth in recent months. In past reports, we have indicated that transport companies are keen to expand their fleet due to more cargo calls being made to Namibia.
“This comes as loadshedding in South Africa prevents the port at Durban from operating at full capacity. We therefore expect Namibia to continue benefiting from this situation as loadshedding is unlikely to be resolved any time soon and so, demand for commercial vehicles in Namibia can continue to rise. Regarding households, instalment credit growth has been relatively flat as cash sales still constitute a meaningful proportion of total units sold, further explained the research firm.
The firm went on to say that it is likely that supply chain issues have normalised in recent months as indicated by some local dealerships we engaged with adding that improved delivery of new stock from global factories has allowed some dealerships to address significant backlogs that arose in 2022.
“This partly explains why vehicle sales in 1Q2023 was the largest since 1Q2018. As supply chains continue to normalise, this could be supportive of vehicle sales in coming months. In addition, individual investors who hold shares in Namibian Breweries received their special dividend of N$26.35 per share. Based on the shareholder register, there are 1,315 retail investors who will receive a total of N$226.6 million in special dividends that is not subject to dividends tax. Naturally, these funds must go somewhere and so a portion of this could be spent in the economy, potentially benefiting the property, vehicle and retail sectors in coming months. Therefore, despite interest rates being high and rising further in 2023, demand for new vehicles has been resilient and we expect this could continue to keep momentum in place for new vehicle sales,” Simonis Storm further explained.