During the entirety of 2023, the automotive market in Namibia witnessed a significant uptrend in new vehicle sales, a report released by Simonis Storm last week highlights.
The year concluded with a total of 12,780 new units being sold, marking an increase of 17.0% y/y from the 10,923 units sold in 2022.
“This total sales volume is particularly notable as it represents the highest total of new units sold since 2017. This trend is noteworthy considering the economic environment that is characterized by high-interest rates and inflation. Majority of vehicles sold in 2023 were commercial vehicles, therefore the resilience of commercial vehicle sales in such challenging economic conditions may indicate a robust underlying demand within certain sectors of the economy, potentially driven by factors such as increased commercial activities or infrastructural developments,” Simonis Storm said.
In the month of December 2023, a total of 841 new units were sold during this period, representing a decline from the 1,169 recorded in November 2023 and the 952 sold in December 2022.
Analysing the data on annual and monthly basis, December 2023 vehicle sales underwent a contraction of 11.7% y/y in sales as compared to December 2022 and 28.1% m/m fall from the sales in November 2023.
“This downturn in sales is the second-lowest monthly sales figure recorded for the entire year of 2023. Moreover, out of the total 841 new vehicles sold in December 2023, a mere three units were purchased by rental agencies.”
In December 2023, the automotive market in Namibia experienced varied trends across different vehicle categories. The sales of new passenger vehicles exhibited a decline, with 426 new units being sold. This represents a decline from the 566 units sold in November 2023 and the 504 units sold in December 2022.
The sales of light commercial vehicles remained relatively stable, albeit with a slight decrease. December 2023 saw 371 units sold, a marginal reduction from the previous year by just two units. However, the medium commercial vehicle segment experienced a notable slump, with sales dipping by 60% y/y to only 14 units as compared to the same month in 2022. Heavy and extra-heavy commercial vehicles also encountered declines.
Sales for heavy commercial vehicles dropped by 14% y/y, from seven in December 2022 to six units, while extra-heavy commercial vehicles saw 50% y/y decrease, falling from 30 in December 2022 to 15 units.
Contrastingly, the bus category witnessed an upswing. The month recorded the sale of nine new units, which is a significant increase of 200% y/y from the three units old in December 2022 and the four units sold in November 2023.
“Despite these fluctuations in various categories, the year 2023 overall marked a positive period for Namibia’s automotive industry. The industry’s performance surpassed pre-COVID-19 levels, indicating a robust recovery and resilience in the face of challenging economic conditions,” said Simonis Storm.
The Toyota Hilux retained its status as the most popular vehicle in December 2023, with sales reaching 196 units. This was followed by the Ford Ranger and Toyota Fortuner, each registering sales of 40 units. The Toyota Corolla Cross and the KIA Sonnet also showed strong performances, with sales of 37 units and 36 units respectively. This distribution of sales across various models reflects the diverse preferences of the Namibian market. In 2023 as reported by NAAMSA, South Africa’s automotive industry achieved a significant milestone in terms of vehicle exports.
The total number of units exported reached 396,290, which represents an increase of 44,505 vehicles or a gain of 12.7% compared to the 351,785 vehicles exported in the prior year, 2022.
“This performance not only signifies a remarkable recovery but also surpasses the previous record set in 2019, which stood at 387,092 units. Additionally, an impressive proportion of the vehicles produced in the country, approximately two-thirds, are destined for international markets.”
Further commenting, Simonis Storm noted: “The overall new vehicle sales figure for the year provides a modest ray of optimism. The upturn in vehicle sales aligns with the growth rate observed in the wholesale and retail sector throughout 2023. Despite inflationary pressures and elevated interest rates, consumer consumption has demonstrated a degree of resilience in 2023. Looking ahead, there is potential for enhanced sales figures in the commercial vehicle segment, driven by optimistic growth forecasts in the mining and transport sectors for 2024, along with the construction of green hydrogen projects.
“Additionally, there is anticipation of an interest rate cut in the second half of 2024 in Namibia. These factors collectively contribute to a cautiously optimistic outlook for the automotive industry in the coming months. In addition to these sector-specific growth indicators, there is the prospect of an interest rate reduction in Namibia during the latter half of 2024. This anticipated monetary policy adjustment could further stimulate consumer and business spending, thereby positively influencing vehicle sales.”