Amid a rebounding automotive market in Namibia, the heavy commercial vehicles (HCV) sector faced a pronounced downturn, recording a steep 37.5% y/y decrease in units sold.
This is according to a report by Simonis Storm which further highlights that in a striking contrast, the light commercial vehicles (LCV) segment emerged as the dominant growth driver, exhibiting a robust 21.3% y/y increase in units sold, outperforming other categories (this analysis specifically excludes buses).
“The commercial vehicles category notably dominated the overall vehicle sales in November 2023, contributing a significant 603 units to the total sales. This represents an increase of 17.3% y/y. In parallel, the market for new passenger vehicles also exhibited a positive trajectory, with a tally of 568 units sold during the month. This reflects an appreciable growth of 7.6% y/y, compared to the same period in the previous year,” the report says.
In November 2023, the automotive market observed a reversal in its recent trend, with vehicle sales climbing by 12.4% y/y, following a four-month period of decline. Additionally, the month-on-month sales registered a substantial increase of 27%, a notable recovery from the -12.5% m/m downturn seen in October 2023.
The total number of units sold in this month reached 1,171.
In the year-to-date period from January to November 2023, there were 11,944 new vehicles sold, marking the most robust performance since the noteworthy figure of 12,224 recorded back in 2017.
“This success is particularly striking given the prevailing economic challenges, including high interest rates, and rising inflation.”
In December, the Bank of Namibia maintained the interest rate at 7.75%, providing a brief respite for consumers amidst ongoing economic pressures. However, projections suggest that the high-interest rate environment will likely continue to impact household debt management at least into the latter half of the next year, despite this temporary stability.
“During the current YTD period, spanning from January to October, there has been a marked improvement in the acquisition of household instalment credit, exhibiting an average growth rate of 4.2%. This figure shows a significant increase compared to the same period in 2022, where the growth rate was a more subdued 0.9%.
“Simultaneously, there has been a noticeable rise in business or corporate credit. This upward trend in corporate credit is closely aligned with the increase in commercial vehicle sales observed during the same period, suggesting a potential link between the escalation in corporate credit activities and the heightened number of commercial vehicle purchases,” Simonis Storm says in the report.
When looking at the global automotive landscape, the electric vehicle (EV) sector stands out for its rapid evolution. In November 2023, the sector witnessed a 20% y/y surge in sales, with 1.4 million units sold, marking a significant milestone. This growth was unevenly distributed across regions, with North America and China showing robust increases of 43% y//y and 25% y/y respectively, while Europe experienced a 3% y/y decline. This decline in Europe can be attributed to reduced government subsidies, notably in Germany and France, and a consumer shift in expectations towards more advanced, cost-effective models anticipated in the near future. Despite this, BEVs emerged as the preferred choice, making up 70% of EV sales, signaling a market shift towards fully electric models.
Consumer hesitancy in Europe is driven by concerns over charging infrastructure, battery longevity, and higher costs compared to traditional vehicles. This sentiment, echoed by consumers like Flavia Garcia and Tom Carvell from Edinburgh, reflects the broader market trend of awaiting more advanced models. The competitive landscape is also shifting. European automakers face pressure from Chinese counterparts like BYD and Nio, who are preparing to introduce more affordable models in Europe. This competition is reshaping market dynamics and influencing consumer choices.
“The immediate future of the EV market suggests a period of slower growth due to these combined factors. However, the long-term outlook remains positive, supported by a global push for sustainability, technological advancements, and evolving consumer preferences. The current phase is crucial, requiring automakers and policymakers to address barriers like cost and infrastructure to sustain the market’s growth.
“The EV market is navigating through a period of transition, balancing short-term challenges with long-term potential. As the industry adapts, it presents a dynamic landscape for investors, manufacturers, and consumers,” said Simonis Storm.