Namibia: Vehicle Sales Recovering Gradually to Pre-Covid-19 Level

THERE appears to be a return to pre-Covid-19 vehicle sales levels as last month recorded 908 new vehicles sold - the highest number since October 2019.

This, according to analysts, somewhat signals a return of consumer confidence after it shrank, especially last year, due to Covid-19.

In October 2019, 976 new vehicle sales were sold, and ever since sales figures have remained below this record despite low interest rates and inflation, longer vehicle loan repayment periods and several other incentives the market offered.

With the dawning of Covid-19, vehicle sales further dropped, bottoming to 50 units sold in April last year.

An analysis by IJG Securities also showed that year to date, ending March, 2 494 new vehicles were sold in Namibia.

This is also the strongest quarter since the fourth quarter of 2019, when 2 567 new vehicles were sold.

"This is a positive sign, as vehicle sales continue to recover to pre-Covid-19 levels, which could indicate somewhat increased levels of consumer confidence," reads IJG's analysis.

Compared to February this year, an increase of 1,7% was recorded from 893 vehicles sold then and a whopping 20,3% compared to 755 sold in March 2020.

The 2 494 cumulative sales figure for 2021, when segmented, shows that light commercial vehicles are in the greatest demand this year, leading the pack with 1 192 new vehicles out of the showrooms followed by passenger vehicles at 1 122 units sold, and trailing are medium and heavy commercial vehicles at 180 new units sold.

It is unclear how the market is expected to act in the short term, but all efforts are poised to see an economic recovery across the board.

"We expect these trends to foster business confidence levels, mainly through corporate instalment credit extensions," reads a commentary by Simonis Storm.

With interest rates and inflation still on the low, and expected to remain so for the rest of the year, and as well as longer repayment periods, analysts say now remains the best time to buy a new vehicle.

In neighbouring South Africa, aggregate domestic sales last month were at 44 217 units, reflecting a substantial increase of 31,8% from 33 546 vehicles sold in March last year.

Export sales also recorded an enormous increase with 40 026 units shipped out of the country - an increase of 38,6% - compared to 28 889 vehicles exported in March 2020.

Reacting to these numbers, the National Association of Automobile Manufacturers of South Africa chief executive officer, Mikel Mabasa, said the turnaround in the new vehicle industry has started and it is expected to recapture lost demand on its recovery path in 2021.

Mabasa, however, said structural constraints in the economy, coupled with the country's growing debt and the ongoing electricity capacity limitations do not bode well for a quick recovery.

"New vehicle sales in 2021 may also be hampered by stock shortages of some models in the coming months, caused by Covid-19-induced manufacturing supply chain disruptions, such as the current global shortage of semiconductors, or computer chips, an important part of modern vehicles," he cautioned.

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Twitter: @Lasarus_A

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