Namibia’s tourism sector, which continues showing signs of recovery, has spurred the second quarter of 2023’s vehicle sales to be the best performing quarter since the second quarter of 2017.
Using the second quarter of 2019 as the pre-pandemic level, the second quarter of 2023 outperformed that benchmark by 11,6%, giving a positive indication that growth in this sector will support business activity in the transport, wholesale, and retail sectors of our economy.
According to an analysis by economic commentators Simonis Storm Securities, the country’s vehicle sales increased by 51,4% year-on-year (y/y), from 872 units in June 2022 to 1 320 in June 2023.
“In prior months, sales were declining since March 2023, with June’s sales being the first monthly increase in sales since then.
“Light commercial vehicles drove sales up in June 2023, increasing by 74,7% y/y from a low base of 375 units to 657 units,” said Simonis.
The analysts said passenger vehicles accounted for 44% of sales and grew by 34,3% y/y in June 2023, while smaller segments of the market – medium to extra-heavy commercial vehicles and buses – collectively accounted for 6,3% of total sales in June 2023.
Records show that 40 extra-heavy vehicles were sold, giving a 18,9% rise y/y; 27 medium vehicle sales shooting up 107,7% y/y; the 11 heavy vehicles sold marked a drop of 8,3% y/y, while commercial vehicles and one bus dropped 50% y/y, were sold in June 2023.
The transport and storage industry expanded by 6,7% y/y in the first quarter of 2023, according to the Simonis analysis.
One of the contributors included freight services which rose 3,2% y/y, despite medium to extra-heavy vehicles showing a 3,5% y/y decline in sales units during the same quarter.
Although units sold are below last year’s levels, commercial vehicle sales have been on an inclining trend since the start of the year.
“This means the volume of cargo transported has increased, as we expected at the start of the year, based on data from local trucking companies.
“Transport has consistently been 3% of GDP since the firsts quarter of 2019, relatively low compared to other sectors in the economy, although we perceive transport to be a driver of economic activity in 2023, supporting complementary activities such as retail, mining, tourism and agriculture,” said Simonis.
In growth terms, the analysts said the wholesale and retail sector has surpassed pre-pandemic levels, growing by 5,7% y/y in the first quarter of 2023.
Total vehicle sales grew by 18,5% y/y during the same period, with most local dealerships being positive on sales going forward – seeing high demand in passenger and commercial vehicles – and this should be supportive of further growth in the retail sector.
“From our discussions with local dealerships, car prices will increase between 3% and 5% each quarter for the rest of 2023 across different brands and should demand for new vehicles remain intact as is expected, we see vehicle sales likely to remain above pre-pandemic levels for most of 2H2023,” said Simonis.
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