A total of 798 new vehicles sold in January

A total of 798 new vehicles were sold in January, which is 154 fewer than were sold in December, but represents a 12.7% year-on-year increase from the 708 new vehicles sold in January 2022, according to IJG Securities.

On a twelve-month cumulative basis, a total of 11 013 new vehicles were sold up to the end of January 2023, representing an increase of 16.6% from the 9 442 new vehicles sold over the same 12-month period a year ago. 2023 is off to a decent start with January’s new vehicle sales up for the fifth consecutive year.

468 New passenger vehicles were sold during January, a decrease of 7.1% month-on-month from the 504 sold in December, but 15.0% higher year-on-year from the 407 new passenger vehicles sold in January 2022. On a rolling 12-month basis, new passenger vehicle sales rose 24.2% year-on-year at the end of January. 12-month cumulative passenger vehicle sales continue to trend higher and are up by 77.0% from the pandemic low, trending at levels last seen in 2017, IJG pointed out.

Commercial vehicle sales declined to 330 units in January, representing a contraction of 26.3% month-on-month but is 9.6% higher year-on-year from the 301 new commercial vehicles sold in January 2022. During the month, 294 light commercial vehicles, 12 medium commercial vehicles, and 24 heavy commercial vehicles were sold. On a year-on-year basis, light commercial sales rose by 10.5% year-on-year, medium commercial vehicles grew by 140.0% year-on-year, and heavy and extra heavy vehicle sales declined by 20.0% year-on-year. All sub-categories, bar heavy- and extra heavy vehicles, have recorded growth on a twelve-month cumulative basis with light commercial vehicle sales increasing by 12.6% year-on-year, medium commercial vehicles sale rising by 9.5% year-on-year, while heavy commercial vehicle sales contracted by 12.3% year-on-year, IJG added.

Both Toyota and Volkswagen started the new year strong and collectively sold more than half of the new passenger vehicles in January. Toyota captured the largest portion with 38.2% of the market share, followed by Volkswagen with 22.6%. Kia and Haval were the best of the rest, taking 8.8% and 5.1% of the market share, respectively. The other manufacturers consumed the remaining 25.2%, IJG said.

Outlook

Commenting on the outlook, Simonis Storm noted that supply chain issues are expected to continue showing signs of normalisation, especially with China having removed its zero Covid policies earlier this year. “We already saw a normalisation in shipping costs and delivery times between North and South trade routes, and now expect the same for East and West trade routes. Certain brands – such as BMW amongst other – never experienced supply chain issues since the pandemic in Namibia. Other brands, keeping all else constant, should see an improvement in the supply of new vehicles from international factories to their local dealerships,” Simonis Storm said.

However, there are numerous constraining factors on car production globally. The ongoing war in Ukraine is likely to limit semiconductor production. Ukraine manufactured about half of the world’s neon supply – a key element for semiconductors – before the war. Ukraine’s neon operations have completely been stopped since the invasion. This could provide shortages for a while as we do not see an end to the war soon, Simonis Storm added.

Taiwan is expecting demand for semiconductors to ease due to expected recessions in advanced economies. However, demand will remain strong in emerging markets, which could keep shortages in place. Lastly, load shedding in South Africa will also hampers on car manufacturing operations and so limit vehicle sales for Namibia in turn.

Locally, imports of commercial vehicles have steadily improved from pandemic lows, however passenger vehicle imports still remain fairly sluggish. Already, some dealerships are seeing an improved inflow since the end of 2022 to reduce their backlog of customer orders. Although, given the mixed view of supply chain easing, but constraints on global car production, it is difficult to say how vehicle sales will evolve in 2023. “We remain of the view that local demand will remain strong despite interest rates being high and for imports of new vehicles to continue recovering, leading to an increase in the number of units being sold,” Simonis Storm said.