Vehicle sales take a hit
Credit restrictions add to fall
New legal constraints combined with a weak economy to make a serious dent in Namibia’s vehicle industry performance so far in 2016.
According to the latest statistics from IJG-Research, vehicle sales were down 18.7% by August, against the 2015 figure, a trend the financial services agency says is likely to continue.
Since January this year, 11 806 vehicles were sold in all categories.
The 1 369 vehicles sold in August alone represented a 14.1% drop compared to August 2015. It also signified a 12.8% reduction in vehicles sold, compared to July 2016.
While salary growth and government’s expansionary fiscal stance had boosted sales until recently, the researchers say higher interest rates and tighter monetary policy of late have reversed this situation.
“Throughout the period of 2014 all the way to mid-2015, we have seen robust growth in vehicle sales, which was driven by a strong consumer base supported by expansionary fiscal and monetary policy and real wage growth in those periods,” IJG-Research’s August vehicle sales report reads.
“However, recent data indicates that this is no longer the case as vehicles sales contractions have been seen.”
Broken down, commercial vehicles sold were down from 8 106 to date (August) in 2015 to 6 744 this year.
Passenger vehicle sales dropped from 6 423 by August 2015 to 5 062 this year.
Toyota and Volkswagen dominated the passenger car market, claiming 29.2% and 28.7% of the market in August.
Toyota remained the market leader in light commercial vehicles at 45.2% of the market, followed by Nissan (16.6%) and Isuzu.
“Higher interest rates and inflation levels, reduction in government spending – directly on vehicles and otherwise – and a weaker economic climate at large have adversely impacted the demand for vehicles,” the report states.
“In addition, the amendment to the Credit Agreement Act made on 20 July, enforcing a mandatory 10% deposit on all passenger vehicles and reducing the maximum repayment period to 54 months will further drive down vehicle sales and growth thereof going forward.”
According to the latest statistics from IJG-Research, vehicle sales were down 18.7% by August, against the 2015 figure, a trend the financial services agency says is likely to continue.
Since January this year, 11 806 vehicles were sold in all categories.
The 1 369 vehicles sold in August alone represented a 14.1% drop compared to August 2015. It also signified a 12.8% reduction in vehicles sold, compared to July 2016.
While salary growth and government’s expansionary fiscal stance had boosted sales until recently, the researchers say higher interest rates and tighter monetary policy of late have reversed this situation.
“Throughout the period of 2014 all the way to mid-2015, we have seen robust growth in vehicle sales, which was driven by a strong consumer base supported by expansionary fiscal and monetary policy and real wage growth in those periods,” IJG-Research’s August vehicle sales report reads.
“However, recent data indicates that this is no longer the case as vehicles sales contractions have been seen.”
Broken down, commercial vehicles sold were down from 8 106 to date (August) in 2015 to 6 744 this year.
Passenger vehicle sales dropped from 6 423 by August 2015 to 5 062 this year.
Toyota and Volkswagen dominated the passenger car market, claiming 29.2% and 28.7% of the market in August.
Toyota remained the market leader in light commercial vehicles at 45.2% of the market, followed by Nissan (16.6%) and Isuzu.
“Higher interest rates and inflation levels, reduction in government spending – directly on vehicles and otherwise – and a weaker economic climate at large have adversely impacted the demand for vehicles,” the report states.
“In addition, the amendment to the Credit Agreement Act made on 20 July, enforcing a mandatory 10% deposit on all passenger vehicles and reducing the maximum repayment period to 54 months will further drive down vehicle sales and growth thereof going forward.”
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