Adding fuel to sales fire
On a rolling 12-month basis new vehicle sales are down 63.1% from the peak in April 2015.
New vehicles sales in the first seven months of 2020 dropped by more than 2 000 compared to the same period last year.
The latest data shows 4 182 new vehicles left showrooms in Namibia from January to the end of July – 32.6% less than the 6 205 sold in comparative months in 2019.
The impact of the lockdown and Covid-19, resulting in job losses and pay-cuts, have slammed the brakes on new vehicle sales, which have already been under pressure due to the ongoing recession, consumers' high indebtedness and a drop in disposable income.The latest sales figures show 666 new vehicles were sold in July, 238 or 26.3% less than the corresponding month in 2019.
“New vehicle sales figures are currently trending at levels last seen in 2005,” IJG Securities commented on the July data. On a rolling 12-month basis new vehicle sales are down 63.1% from the peak in April 2015, the analysts added.
“The figures suggest that that vehicle owners are either holding on to the vehicles they already own or are purchasing second hand and imported vehicles. We expect this to remain the case for the medium term as there is currently little indication that economic conditions will improve any time soon,” IJG said.
Credit
A total of 227 new passenger vehicles were sold during July, a drop of 40.6% against July 2019.
“The drop in passenger vehicles confirms pressured consumers, as passenger vehicles sales is regarded as a proxy of consumer demand,” Simonis Storm (SS) said.
Supporting SS' point of view is the continuing downward trend of instalment credit extended by commercial banks in the country.
The latest figures by the Bank of Namibia (BoN) show instalment credit and leasing to consumers in June grew by -5.8% compared to a year ago. For business, the figure was -12.9%.
In June 2016, the last time instalment credit grew positively by double digits in the month under review, consumers' total instalment credit debt was N$7.112 billion. In June 2020, they owed N$6.339 billion in total – about N$773 million less.
In June 2015, business' total instalment credit debt stood at N$4.898 billion. In June 2020, the amount totalled N$3.739 billion – a drop of N$1.159 billion.
“Against this background, we do not foresee new vehicle sales to increase significantly for the remainder of 2020 going into 2021,” SS said.
Commercial vehicles
In total 439 new commercial vehicles were sold in July, up 4% from the previous month, but down 15.9% compared to June 2019.
“This has been the third consecutive month of increases in new commercial vehicle sales which is somewhat encouraging, although the previous two increases were from a low base and the sales figures are still a far cry from those seen five to six years ago,” IJG said.
On a twelve-month cumulative basis, light commercial vehicle sales fell 24.1% on an annual basis, medium commercial vehicle sales 6.3% and heavy commercial vehicle sales contracted by 19.9%.
“This is the first time since September 2018 that all three these categories have recorded a decrease on a twelve-month cumulative basis,” IJG said.
Jo-Maré Duddy –
The latest data shows 4 182 new vehicles left showrooms in Namibia from January to the end of July – 32.6% less than the 6 205 sold in comparative months in 2019.
The impact of the lockdown and Covid-19, resulting in job losses and pay-cuts, have slammed the brakes on new vehicle sales, which have already been under pressure due to the ongoing recession, consumers' high indebtedness and a drop in disposable income.The latest sales figures show 666 new vehicles were sold in July, 238 or 26.3% less than the corresponding month in 2019.
“New vehicle sales figures are currently trending at levels last seen in 2005,” IJG Securities commented on the July data. On a rolling 12-month basis new vehicle sales are down 63.1% from the peak in April 2015, the analysts added.
“The figures suggest that that vehicle owners are either holding on to the vehicles they already own or are purchasing second hand and imported vehicles. We expect this to remain the case for the medium term as there is currently little indication that economic conditions will improve any time soon,” IJG said.
Credit
A total of 227 new passenger vehicles were sold during July, a drop of 40.6% against July 2019.
“The drop in passenger vehicles confirms pressured consumers, as passenger vehicles sales is regarded as a proxy of consumer demand,” Simonis Storm (SS) said.
Supporting SS' point of view is the continuing downward trend of instalment credit extended by commercial banks in the country.
The latest figures by the Bank of Namibia (BoN) show instalment credit and leasing to consumers in June grew by -5.8% compared to a year ago. For business, the figure was -12.9%.
In June 2016, the last time instalment credit grew positively by double digits in the month under review, consumers' total instalment credit debt was N$7.112 billion. In June 2020, they owed N$6.339 billion in total – about N$773 million less.
In June 2015, business' total instalment credit debt stood at N$4.898 billion. In June 2020, the amount totalled N$3.739 billion – a drop of N$1.159 billion.
“Against this background, we do not foresee new vehicle sales to increase significantly for the remainder of 2020 going into 2021,” SS said.
Commercial vehicles
In total 439 new commercial vehicles were sold in July, up 4% from the previous month, but down 15.9% compared to June 2019.
“This has been the third consecutive month of increases in new commercial vehicle sales which is somewhat encouraging, although the previous two increases were from a low base and the sales figures are still a far cry from those seen five to six years ago,” IJG said.
On a twelve-month cumulative basis, light commercial vehicle sales fell 24.1% on an annual basis, medium commercial vehicle sales 6.3% and heavy commercial vehicle sales contracted by 19.9%.
“This is the first time since September 2018 that all three these categories have recorded a decrease on a twelve-month cumulative basis,” IJG said.
Jo-Maré Duddy –
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