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Astronomical Jump in New Vehicle Sales

March 2023 recorded the highest number of new vehicles sold in Namibia since July 2017.

In July 2017, some 1 226 units were sold, compared to 1 280 sold in March this year.

According to economic analysts Simonis Storm Securities, vehicle sales were primarily driven by passenger and light commercial vehicles, which accounted for 94,2% of total sales in March 2023.

“However, medium-commercial vehicles recorded the largest annual increase in March 2023, followed by extra heavy commercial and light commercial vehicles,” the analysts say.

Year to date, sales have increased by 28,8%.

Although the first quarter of 2015 still holds the record for the highest number of vehicle sales, the first quarter of this year is the best-performing first quarter since 2018.

In the first quarter of 2023, a total of 3 134 units were sold, growing by 18,5% quarter on quarter from 2 645 units in the last quarter of last year.

The wholesale and retail sector increased by 6% year on year in 2022, which is the second consecutive year that this sector has recorded an expansion following four years of economic contractions.

“Total annual vehicle sales tend to co-move with growth in the wholesale and retail sector. We expect vehicle sales to continue trending upwards and above levels recorded in the last two years.

“This is likely to contribute positively to the wholesale and retail sector for 2023,” Simonis says.

Instalment and leasing credit for corporates and household increased by 11,6% year on year and 2,8% year on year, respectively, in February 2023.

“We presume demand from local transport companies is driving corporate instalment credit growth in recent months.
“In past reports, we have indicated that transport companies are keen to expand their fleet due to more cargo calls being made to Namibia,” the analysts say.
They say load-shedding in South Africa is preventing the port at Durban from operating at full capacity.

“We therefore expect Namibia to continue benefiting from this situation as load-shedding is unlikely to be resolved any time soon and so, demand for commercial vehicles in Namibia can continue to rise.”

Regarding households, Simonis says instalment credit growth has been relatively flat as cash sales still constitute a meaningful proportion of total units sold.
Simonis believes improved delivery of new stock from global factories has allowed some dealerships to address significant backlogs that arose in 2022, partly explaining why vehicle sales in the first quarter of this year was the largest since the first quarter of 2018.
In addition, individual investors with shares in Namibian Breweries received their special dividend of N$26,35 per share.
Based on the shareholder register, there are 1 315 retail investors who will receive a total of N$226,6 million in special dividends that is not subject to dividend tax.

“Naturally, these funds must go somewhere, and so a portion of this could be spent in the economy, potentially benefiting the property, vehicle and retail sectors in coming months.

“Therefore, despite interest rates being high and rising further in 2023, demand for new vehicles has been resilient and we expect this could continue to keep momentum in place for new vehicle sales,” Simonis says.

Source : TheNamibian