Namibian banks’ cautious approach to vehicle financing is constraining local car sales, economic advisory firm Simonis Storm has said.
The company noted that local dealerships are recording an increase in car loan application rejection, as, “some of the local banks perceive car loans as higher risk in the current economic environment, and this has constrained vehicle sales in recent months.”
This was after vehicle sales marginally slowed in September 2022, by 3.2% to 1,018 units sold during the month compared to 1,052 units in August 2022.
However, latest figures from the National Association of Automobile Manufacturers of South Africa (NAAMSA) show that on an annual basis vehicle sales went up by 32.47% from 767 units sold in September 2021.
Commercial vehicles recorded the highest annual increases in units sold during September 2022 according to the firm, “indicative of potential growth in the road cargo segment of the transport sector”.
“This was the best September in terms of vehicle units sold since 2019. Overall, YTD vehicle sales are trending above levels seen in the last two years. This is despite Namibia being in an interest rate hiking cycle,” Simonis Storm Economist Theo Klein said.
“Household instalment credit has been lacklustre (averaging 0.9% YTD), whereas corporate instalment credit has recorded double digit growth in recent months. This is in line with increases in commercial vehicle sales that we have observed during the same time.”
Local car rental companies, according to Simonis Storm, purchased a total of 162 vehicles during Namibia’s peak tourist season (May to September) this year, compared to 240 vehicles bought in last year’s peak tourist season.
“This is indicative of major global supply constraints still limiting available stock at local dealerships as we know that there is significant demand from rental companies who want to expand their fleet. High demand stems from a significant improvement in tourist inflows during this year,” Klein said.
Toyota accounted for 45.3% of vehicles sold during the period under review, followed by Volkswagen (12.7%), Ford (5.0%), Nissan (4.8%) and KIA (4.5%).
“These five brands accounted for 72.3% of all vehicles sold in September 2022. However, other brands with lower market shares recoded higher annual growth rates in units sold during September 2022.”
