SSS: Low interest rates spur vehicle sales
The advent of low interest rates has spurred high vehicles sale volumes in Namibia despite an increase in prices, Simonis Storm Securities (SSS) latest vehicle sales report notes.
There has been a systematic increase in the annual growth rate of vehicles purchased in Namibia (from 20.6% to current levels of 51.6% y-y growth), the reports states. Notably, during the period under review, prices of new vehicles have increased from 2.73 % levels to 10.0%, exhibiting inelastic demand. Since November 2013, the light commercial vehicles have been leading sales, with 918 units sold in February, an increase from the 753 units in November.
Passenger vehicle sales followed suite, with 729 units sold during the same period; thus, the two categories amounted to 95% of the total vehicles sold. This was mainly supported by sales from Toyota and Volkswagen, with 725 and 204 units, respectively. Mercedes Benzes, however, registered a marginal decline, from 54 to 34 units while Audi sales slightly improved from 21 units to 24 units.
SSS economist, Daniel Kavishe, attributes the increase in light commercial vehicles sales to the ongoing restocking of vehicle fleets by companies and Government, as they prepare for the new fiscal year. “Growth sales are attributed to fiscal planning, as most companies restock their vehicle fleets in the advent of a new tax year. Furthermore, Government tenders for new vehicles on the pipeline instigated car dealers to increase their stock during this period,” he says.