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Vehicle price hikes to slowdown in 2023 - report

Prices for new vehicles in Namibia are expected to slow down next year due to low commodity prices, research firm Simonis Storm has predicted.

“In our previous report we did indicate that new vehicle prices might start showing signs of moderation in early 2023 due to declining commodity prices – a trend we expect to persist into mid-2023. Lower commodity – specifically metal – prices together with a stronger Rand exchange rate might lead to a slowdown in new vehicle price hikes by local dealerships in 2023,” Simonis Storm Economist Theo Klein said.

This comes as local dealerships, according to Klein, are struggling with new vehicle supply backlogs.

“We are cautiously positive on vehicle sales in 2023. A number of local dealerships still have a large backlog of orders from customers as a result of limited supply of new vehicles coming to Namibia. Lower global car production would further constrain Namibia’s imports of motor vehicles which still remain below pre-pandemic levels,” he said.

Vehicle sales, according to latest figures from the National Association of Automobile Manufacturers of South Africa (NAAMSA), increased by 38.4% year on year in November 2022 and 4.9% month on month.

“Vehicle sales broke a two consecutive month decline in November 2022, rising by 38.4% y/y in November 2022. On a monthly basis, vehicle sales increased by 4.9% m/m in November 2022, compared to -2.2% m/m in October 2022. A total of 1,045 units were sold in November 2022, higher than the long run average of 840 units,” Klein said.

“Medium and light commercial vehicles recorded the largest annual increases in units sold, and extra-heavy commercial vehicles were the only category which recorded a decline in units sold.”

Passenger vehicle sales have surpassed sales levels of 2019, however, commercial vehicle sales have only reached 90.0% of 2019’s sales levels, according to the Simonis Storm Economist.

“After having peaked with 2,150 units sold in March 2015, vehicle sales have trended lower and now average 906 units per month YTD (January to November). Government commenced its fiscal consolidation plans in 2015 and this could explain a portion of the major decline in vehicle sales since then,” he said.

Global car production totalled 57 billion units in 2021.

 

 

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Last modified on Wednesday, 14 December 2022 20:19

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