Vehicle prices locally on a rising trend
A total of 767 vehicles were sold during the month of September 2021 compared to 762 sold in the prior month and 874 sold a year ago.
19 October 2021 | Economics
Buying and maintaining a vehicle has therefore become a more costly consideration. Simonis Storm
Global shipping constraints and reduced production, resulting in delayed imports, are some of the factors that are driving up vehicle prices in Namibia.
According to Simonis Storm new vehicle sales report for September 2021, motor car prices rose 10.5% year-on-year in September 2021 and on average they rose by 9.2% this year.
Due to similar supply constraint reasons, spare parts and vehicle service charges have increased by 6.8% year-on-year in September 2021 and on average they increased by 4.2% this year. Buying and maintaining a vehicle has therefore become a more costly consideration, SS pointed out.
KIA commented that stock is starting to pick up, although at a slow pace, where backorders are being allocated to dealerships throughout Namibia. KIA now has a backlog of 10 orders. In addition, KIA had a price increase on 1 October 2021. This will continue to support the second-hand vehicle market, in which we have observed an increase in demand. On the other hand, Toyota’s backlog has increased from 300 to 350 vehicles, SS said.
Earth moving and related industrial machines used in various sectors such as construction and mining are not part of the vehicle sales data. Sales data from Barloworld Namibia show that a total of 45 machines were sold year to date (YTD), compared to 46 machines sold during the same period last year.
A total of 767 vehicles were sold during the month of September 2021 compared to 762 sold in the prior month and 874 sold a year ago. Vehicle sales decreased by 12.2% year-on-year and marginally increased by 0.7% month-on-month in September 2021. The annual increase was mainly driven by increased purchases of extra-heavy commercial and passenger vehicles.
Passenger and light commercial vehicles, which make up 49.5% and 39.6% of total vehicles sold during September 2021, decreased by 14.1% month-on-month and increased by 12.4% month-on-month in September 2021 respectively. Year to date, annual growth in instalment credit has averaged -3.0% on a monthly basis, SS added.
The value of imports of special purpose vehicles used for the transportation of goods and personal vehicles used for transportation of persons recorded a monthly decrease of 20.1% and an increase of 90.3% respectively, where most of the imported vehicles were bought from South Africa.
The total value of imported vehicles during August 2021 amounted to N$215 million for personal vehicles and N$163 million for special purpose vehicles. The spike in personal vehicle imports could be as a result of the backlog in orders that local dealers had in recent months. The increase in imports from July and August has likely assisted in reducing the backlog experienced by some local dealerships in terms of vehicle delivery to clients who paid deposits a few months ago, SS pointed out.
“We believe that once imports and delivery of new vehicles normalises, vehicles sales will remain flat to negative in Namibia. The constrained supply of vehicles being imported will likely persist for the next couple of months.
Depending on each consumer’s needs, we might see further shifts from the first-hand to the second0hand vehicle market as a result of delayed import deliveries. Certain brands have alluded to losing customers to the second-hand market in recent months,” SS said.