Vehicles Sales Highest In Over A Year

By:Staff writer
Vehicle sales have seen the highest level since March 2022 after 1,103 units were sold in February after a weak start in 2023.
In comparison, with 883 units sold in February 2022, this indicates a 24.9% year-on-year increase.
“On a monthly basis, units sold in February are 36.3% higher than sales in January 2023. Units sold in February 2023 exceed the 6-month moving average, which indicates that vehicle sales are recovering from the dip in sales observed towards the end of 2022,” according to a Simonis Storm report.
According to the agency, the reason for the increase could most likely be due to some financial recovery post festive season and tax purposes, “as February is the tax year end.”
“Toyota, Volkswagen and Kia were the largest drivers of vehicle sales this month. Their sales represent 65% of total sales, with Toyota selling 509 units (↑ 50% m/m), Volkswagen selling 160 units (↑ 38% m/m) and Kia selling 53 units (↑ 13% m/m). Iveco had the highest monthly increase of 400%, but this only reflects 4 more vehicles sold in February than in January 2023,” the firm says.
Overall, 51% or 559 units that were sold last month were passenger vehicles, which reflects as the primary contributor to the increase, a 27.3% y/y rise in February 2023 and 15.0% y/y in January 2023.
Light commercial vehicles follow, accounting for 44% of units sold (486 units), which is a 32.8% y/y increase in February 2023 and a 10.5% y/y increase in January 2023).
As per the latest national budget, Simonis Storm argues that the government’s expenditure on vehicles is set to increase compared to the N$55 million spent last year.
In 2020, President Hage Geingob announced that the government would not order a new vehicle fleet for the Executive and Public Office Bearers for the period 2020-2025, which has been viewed as bringing down the overall sales.
The Minister of Finance Iipumbu Shiimi’s national budget however indicated that N$210 million has been allocated for new vehicles.
According to Simonis Storm’s analysts, if materialised, increased public spending on vehicles may assist vehicle sales to persist on an upward trend throughout 2023.
“This will be in addition to high demand from the private sector for both passenger and light commercial vehicles.”
The firm also said that vehicle sales have been resilient since 2021, despite rising car price inflation.
“Car price inflation has averaged 4.3% y/y for every month in 2022 and we expect similar movements in 2023 owing to the weak Rand exchange rate. Globally, JP Morgan reported that the average price for vehicles in the U.S. increased by 4.2% y/y in January 2023, TransUnion reported that new vehicle pricing increased from 2% in 4Q2021 to 7% in 4Q2022 in South Africa.”
Simonis Storm said the increasing prices are caused by inflationary input costs, such as diesel, freight, shipping, logistics and electricity.
“Local demand for new vehicles across the passenger and commercial segments is unlikely to be deterred by high interest rates. The repo rate has normalised to pre-pandemic levels and at the same time, vehicle sales remain at elevated levels.”