Vehicle sales still face uphill battle
Simonis Storm expects annual vehicle sales will decrease by a margin of 2.8% this year.
17 March 2020 | Business
The bottom is still to be seen especially given the current supply chain strain due to the global outbreak of Covid-19. - Simonis Storm
It is expected that annual vehicle sales will decrease by a smaller margin of 2.8% in 2020, SS pointed out.
New vehicle sales increased by 19% month-on-month to 799 units last month compared to 671 units recorded in the first month of 2020, SS says in their analysis of the latest figures.
The monthly upside is attributed by an increase across all categories including passenger vehicles, light commercial vehicles (LCVs), heavy commercial (HCVs) and extra heavy (EHVs) with the exception of buses which declined by 25% month-on-month, SS added.
On an annual basis, vehicle sales recorded a growth of 6.4%, which marks the second month of positive growth.
The annual growth emanated from all the categories with the exception of passenger vehicles which contracted by 2% year-on-year to 347 units.
Supply chain strain
“Although the vehicle market is coming from a very low base, we are of the view that the bottom is still to be seen especially given the current supply chain strain due to the global outbreak of Covid-19,” SS said.
According to SS, light commercial vehicles (LCVs) dominate new vehicle sales. This category increased by 15.2% month-on-month and by 9.9% year-on-year to 386 units in February.
The Toyota brand continues to be the market leader in the LCV space, making up 56% of total new LCV sales last month. Nissan made up 17% of total commercial vehicles during the period under review, followed by Isuzu and Ford with 8% each.
Buses plays a vital role in the transport industry in Namibia as it conveys a large part of the population, especially the lower-level income earners. However it contributed 0.4% the least to new vehicle sales. Buses declined by 25% month-on-month to three units in February compared to 4 units recorded in the prior month, SS says.
The outbreak of the Covid-19 has negatively affected global vehicle production and sales. Several Chinese vehicle assembly plants extended their seasonal shut-downs and the automotive component supply chain has been disrupted with some industrial areas in lockdown.
A few automotive plants globally have reopened their production, while many others remain closed, SS says.
In South Africa, new vehicle sales remained weak in February, declining by 0.7% year-on-year to 43 485 units from 43 805 vehicles sold in the prior year.
Export sales dropped by 2 843 units to 30 832 units, reflecting a decline of 8.2% year-on-year, SS says.
Despite the decline in vehicle exports in February, it is anticipated that the upward momentum on the export side would continue into 2020. The strong growth of vehicle exports in recent years continues to underpin the key role that the South African automotive industry plays in the country's economy, despite the challenges, SS added.
Phillepus Uusiku –