Poorest half-year new vehicle sales since 2009
16 July 2021 | Business
According to Cirrus Capital (CC), this growth should be taken in light of the fact that the country was under stricter lockdown conditions and faced extreme uncertainty a year prior.
Therefore, when comparing year to date (YTD) sales to 2019 figures, new vehicles sale decreased by 7.9% amounting to 843 new vehicles being sold in June 2021, CC said.
YTD new vehicle sales grew by 38.9% compared to the same period in 2020, however these sales are down by 7.9% when compared to the 2019 figures. As a result, half year vehicle sales posted the poorest performance since 2009.
Commercial vehicle sales saw decreases on both a monthly and annual basis, with respective growth rates of -4.4% and -2.1%, amounting to 413 vehicles sold. Conversely, new passenger vehicle sales saw increases month-on-month and year-on-year, growing by 13.8% and 24.6%, respectively, amounting to 430 passenger vehicles sold, CC pointed out.
These poor half-year sales illustrate that demand for new vehicles remains subdued and continues the downward trend since 2016.This is due to a multitude of factors. Key drivers have been the weak consumer conditions such as high unemployment, high indebtedness and lower real wages, driving strong demand in the second-hand market, CC said.
Price sensitive consumers have flocked to these cheaper alternatives, reducing sales for new vehicles. This dynamic has prevailed so much so that prices in the second-hand market have been quoted as rising, which illustrates the weaker demand of new vehicle sales.
The strong demand in the second-hand market has also led to reports of difficulties in sourcing second-hand vehicles for sales particularly as reduced sales of new vehicles decrease the potential supply for future second-hand vehicles, CC added.
Moreover, there are supply constraints in the new vehicle production chain, which is a worldwide phenomenon. Globally, shortages of semiconductor chips have arisen.
Shortages have forced many factories to reduce production, leaving fewer vehicles to be shipped to dealerships including Namibia. Finally, with the recent riots in South Africa and particularly if these spread or do not subside, supply of vehicles may come under pressure given the production lines of many popular vehicles in South Africa, CC said.