No relief for car dealers
Since the beginning of the economic slowdown in 2015, vehicle sales have been on the decline - and the pace at which they are declining is increasing.
NDAMA NAKASHOLE
While some sectors of the economy claim to be recovering, the car industry is still struggling.
The latest data released on Friday show that vehicle sales declined by 9.7% in February 2018.
That does not come as a surprise, as the government’s spending on vehicles has been slashed from N$45 million to N$12 million in the 2018/2019 national budget.
The government, which used to be a major buyer of vehicles, had already reduced spending on its car fleet in last year’s budget.
Ernst & Young country managing partner Cameron Kotzé said at a Nedbank budget review held on 8 March that car dealers should brace themselves for hard times.
“That (N$12 million) is all that government is going to spend on cars. So no good news for car sellers,” he said.
Friday’s vehicle sales report by Simonis Storm Securities shows that annual new vehicle sales in Namibia had declined by 38.7% to 13 313 units in 2017 since its peak of 21 718 units recorded in 2014.
Simonis Storm said the used car market was also in a fix, as evidenced by increased sales promotions in an attempt to offload excess stock.
Monthly Victory
Despite an annual decrease, and a negative outlook for vehicle sales in the country, Simonis Storm’s report shows that February’s new vehicle sales were up 17.9% from January’s sales. This increase was led by Toyota and Volkswagen, which had the highest monthly increase.
Reluctant to borrow
Simonis Storm said the continuous contraction in instalment credit, coupled with the broad-based economic slowdown, would extend the downward trend in new vehicle sales throughout 2018.
Latest money and banking statistics from the Bank of Namibia (BoN) show that instalment credit dropped to N$7.14 billion in January 2018 from N$7.17 billion the previous month.
Instalment credit also showed an annual drop from N$7.33 billion recorded in January 2017. This is despite the fact that overall private-sector credit (PSCE) went up by over N$340 million during that month.
Friday’s Simonis Storm report shows that instalment credit has been shrinking since 2014. The same trend has been observed in vehicle sales.
However, instalment credit’s decreasing trend seems to be a sharper one compared to the vehicle sales. This could mean that consumers are also cutting on other types of instalment loans such as store accounts, while still desiring more credit such as overdrafts.
While some sectors of the economy claim to be recovering, the car industry is still struggling.
The latest data released on Friday show that vehicle sales declined by 9.7% in February 2018.
That does not come as a surprise, as the government’s spending on vehicles has been slashed from N$45 million to N$12 million in the 2018/2019 national budget.
The government, which used to be a major buyer of vehicles, had already reduced spending on its car fleet in last year’s budget.
Ernst & Young country managing partner Cameron Kotzé said at a Nedbank budget review held on 8 March that car dealers should brace themselves for hard times.
“That (N$12 million) is all that government is going to spend on cars. So no good news for car sellers,” he said.
Friday’s vehicle sales report by Simonis Storm Securities shows that annual new vehicle sales in Namibia had declined by 38.7% to 13 313 units in 2017 since its peak of 21 718 units recorded in 2014.
Simonis Storm said the used car market was also in a fix, as evidenced by increased sales promotions in an attempt to offload excess stock.
Monthly Victory
Despite an annual decrease, and a negative outlook for vehicle sales in the country, Simonis Storm’s report shows that February’s new vehicle sales were up 17.9% from January’s sales. This increase was led by Toyota and Volkswagen, which had the highest monthly increase.
Reluctant to borrow
Simonis Storm said the continuous contraction in instalment credit, coupled with the broad-based economic slowdown, would extend the downward trend in new vehicle sales throughout 2018.
Latest money and banking statistics from the Bank of Namibia (BoN) show that instalment credit dropped to N$7.14 billion in January 2018 from N$7.17 billion the previous month.
Instalment credit also showed an annual drop from N$7.33 billion recorded in January 2017. This is despite the fact that overall private-sector credit (PSCE) went up by over N$340 million during that month.
Friday’s Simonis Storm report shows that instalment credit has been shrinking since 2014. The same trend has been observed in vehicle sales.
However, instalment credit’s decreasing trend seems to be a sharper one compared to the vehicle sales. This could mean that consumers are also cutting on other types of instalment loans such as store accounts, while still desiring more credit such as overdrafts.
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