By: Nghiinomenwa Erastus
Local car sales are struggling to reach 1 000 units monthly, as seen in mid-2019 and back in 2018- one of the factors brought forward is the low credit extension to fund vehicle purchases locally.
Moreover, global production challenges such as chip and labour issues may compound vehicle production issues if they are not solved by mid-2022 as projected.
According to the National Association of Automobile Manufacturers South Africa (NAAMSA), 734 vehicles were sold during December 2021 (compared to 755 sold in the prior month and 704 sold a year ago).
Using Simonis Storm analysis, pre-pandemic, 1,196 vehicles were sold monthly on average in the local market.
However, post-pandemic break, only 705 vehicles are sold monthly on average.
Removing the base effect of April 2021, the average annual increase in vehicle sales stood at 17% for 2021, Simonis Storm found.
In 2021, 9 428 vehicles were sold (compared to 7 612 sold in 2020 and 10 415 in 2019), representing a 23,9% annual increase.
Medium-commercial vehicles saw the most significant annual increase; however, total vehicle sales continue to be dominated by the passenger (49% of total sales) and light-commercial vehicles (43% of total sales).
Simonis Storm researchers believe imports of vehicles into Namibia will remain challenging for most of 2022.
This will be due to the ongoing global production challenges discussed above.
In addition, instalment credit extension from commercial banks is another constraint on local vehicle sales. Local dealers assessed have alluded to losing numerous deals due to customers not obtaining financing from banks.
The evidence is slow to credit extension through instalment and leasing, which is mainly used to buy vehicles contracted by 4,6% and 0,3% yearly for businesses and households in 2021.
Zooming in the local vehicles sales, some of the brands with the highest annual increases in sales in 2021 compared to 2020 (coming off a low base) include Suzuki (95%), Scania trucks (77%), KIA (66%), Lexus (44%) and Land Rover (35%).
In terms of market share, Simonis Storm found that Toyota and Volkswagen dominated the local market and accounted for 34,9% and 13,7% of total vehicles sold in 2021, respectively.
Comparing market shares of annual sales, Nissan replaced Ford as the third largest brand with 6,2% of total sales in 2021, and Ford moved down to the fourth largest (6,1%).
Lastly, KIA replaced Mercedes as the fifth most prominent brand, with 4,6% of total sales in 2021.
These top five brands accounted for 65,7% of total vehicles sold in 2021, Simonis Storm analysis highlights.
Regarding cost, households and corporations that plan to buy cars need to jerk up their budget allocated as motorcar prices have on average increased by 8,8% year-on-year (y/y) in 2021 compared to 2020.
Leading are vehicle spares which recorded an average growth in prices of 6,4% y/y in 2021, and service and repair charges increasing by 4,6% y/y in 2021. Email: firstname.lastname@example.org