By: Nghiinomenwa Erastus
Toyota, one of the local most consumed car brands, has cut global production for November by as much as 15% (between 100,000 and 150,000 cars), Simonis Storm Security revealed.
The company representatives blame the ongoing global shortage of microchips used in vehicles, Simonis Storm analysis wrote.
This is not the first production cut from Toyota. It did the same for September and October, with shortages in components dragging car production lower during these months.
Despite the production cut for the brand, local dealerships have indicated to Simonis Storm’s researchers that vehicle sales would be significantly higher if the stock were available.
The lack of available stock and delayed delivery times of imported vehicles could potentially also weigh on instalment credit uptake by customers (both individuals and corporate).
Last month Toyota Namibia has seen an increase in its backlog from 300 to 350 vehicles.
In other words, customers who have paid deposits are still waiting for their new cars to be delivered in Namibia since early this year.
The company still targets to produce 9 million Toyota cars for the year ending 31 March 2022.
Simonis Storm’s analysis also revealed that not only Toyota is battling backlog; Volkswagen is also experiencing a production backlog at its South African factory.
As a result, it is affecting local dealerships’ stock in Namibia.
Imports of Volkswagen models are delayed due to the shortage of cargo ships and containers.
“Leading to local dealerships taking a cutback on their allocated orders,” explained Simonis Storm.
The broker and investment advisor company has also highlighted that market expectations are that constrained supply of new vehicles will remain unchanged until mid-next year.
One of the local Volkswagen dealerships has a short supply of most model ranges for passenger and commercial ranges, resulting in market share loss. Some customers opt to take what is available elsewhere and do not want to wait for imports to arrive.
In terms of pricing, Volkswagen vehicles in Namibia have seen price increases every three months between 1,5% to 2% on average during 2021, Simonis Storm assessment shows.
On average, about 40% of Volkswagen vehicle sales are company/corporate purchases (60% being private purchases), and about 33% are financed with cash deals (loans finance 67%).
Year-to-date, Toyota controls the local vehicle market share (37%), followed by Volkswagen (15%), Ford (7%), Nissan (7%), and KIA (5%).
Simonis Storm’s assessment has also revealed that a total of 7 935 vehicles have been sold year-to-date in Namibia, of which the top five brands accounted for 71,5% (5,673 vehicles).
For October 2021, a total of 714 vehicles were sold compared to 767 sold in the prior month, and 561 sold a year ago) according to the National Association of Automobile Manufacturers South Africa (NAAMSA).
This represents an increase of 27,3% year-on-year and a decrease of 6,9% in October 2021.
The annual growth was mainly driven by increased passenger and light commercial vehicles purchases, which accounted for 49,9% and 41,3% of sales during October, respectively.
Extra-heavy commercial vehicles saw the most significant annual increase in vehicle sales during October, growing by 15 units.
Simonis Storm’s analysis has also indicated that despite an increase in imports of vehicles, the local dealerships are still not meeting demand.
Households and companies mostly make use of instalments and leasing credit facilities from commercial banks to acquire vehicles.
Year to date, annual growth in instalments and leasing credit declined by 6,2% and 0,5% on average for corporate and households, respectively, during 2021.
This is despite low-interest rates, job security and budget capacity uncertainty weighing on consumer demand for instalment credit.
Simonis Storm indicated that appetite/demand for vehicles is there, as communicated by local dealerships, and that vehicle sales would be significantly higher if the required stock were available.
The lack of available stock and delayed delivery times of imported vehicles is potentially weighing on the extension of instalment credit facilities to customers (both individuals and corporate). Email: erastus@thevillager.com.na
