Latest figures from Simonis Storm Securities show that Namibian vehicle sales contracted by 23.5% year-to-date at the end of July 2017 to 15523 units compared to a contraction of 16.6% year-to-date in July 2016.
On a monthly basis, however, overall vehicle sales picked up by 10.3% to 1346 units, says the firm.
This was particularly reflected in the category of light commercial vehicles - supported by continued stronger demand in the rental market, as Namibia’s tourist season continues.
Analyst at Simonis Storm Securities Frans Uusiku cautions that the slight improvement in sales is only indicative of a seasonal trend which in no way reflects a rebound in the economic situation.
While we note a moderate rebound in vehicle sales, we believe that this reflects a seasonal pattern and should not be construed as a reflection of an improvement in economic conditions, locally, as Private Sector Credit Extension continues to trend downwards,” he says.
Projecting the sales, Uusiku says, “We thus expect overall vehicle sales to return on its downward spiral by the beginning of 4Q2017 as the Namibia tourist season ends.”
“Although we now expect BON to cut the repo rate by 25 basis points at its meeting on 16 August 2017, we still do not foresee this as supporting vehicles sales as we believe households would require some time to adjust their disposal income and spending priorities,” he further says.