Rising costs pose risk to Namibia’s vehicle market outlook

**Staff Writer **

Namibia’s vehicle market is expected to maintain its momentum through the remainder of 2026, although rising inflation, fuel prices and vehicle running costs are creating a tougher operating environment for consumers and businesses.

According to Simonis Storm Securities (SSS), its forecast remains at between 15 500 and 16 500 vehicle units for the full year, requiring monthly sales of between 1185 and 1435 units from September to December.

The market has recorded between 1 200 and 1 600 units a month since March. August sales reached 1 380 units, up 8.6% year-on-year but down 10.1% from July.

Total vehicle sales for the first eight months of 2026 stood at 10 760 units, representing a 12.1% increase compared with the same period last year.

SSS said the August decline represented a normalisation after a strong July rather than the beginning of a slowdown, with September sales expected to indicate whether the market maintains its underlying monthly run rate.

For 2027, SSS has projected vehicle sales of between 17 000 and 19 000 units if TotalEnergies’ Venus final investment decision (FID) is confirmed and the project mobilises as scheduled.

If the FID is delayed, the forecast range is 15 000 to 17 000 units. SSS assigns a 70% to 90% probability to confirmation around the end of 2026 or beginning of 2027 and estimates that a positive outcome would involve a multi-year capital programme of between N$180 billion and N$220 billion.

However, the report said the immediate issue for the vehicle market is rising costs rather than sales volumes.

SSS said the increase in vehicle operating costs was significant because it indicated that the cost of owning and maintaining vehicles was rising alongside fuel prices.

A further fuel-price adjustment took effect on 2 September, increasing petrol by 60 cents a litre and diesel by N$1.60 a litre. The Road User Charge levy also increased by 30 cents.

The report noted that Brent crude had risen to about US$99.85 a barrel, up 17% in one month and 50% year-on-year.

SSS expects transport inflation to remain elevated through the end of 2026, with the possibility of testing or exceeding the June 2026 cycle high of 12.9%.

The inflation outlook also has implications for interest rates and vehicle financing.

The Bank of Namibia kept its repo rate unchanged at 6.75% on 12 August, while SSS said its full-year inflation forecast of 4.3% to 4.6% was above the central bank’s 4.0% forecast.

SSS identified an upside inflation risk of between 4.7% and 5.1% if Brent crude remains above US$105 a barrel or if the South African Reserve Bank raises interest rates at its 23 September meeting.

The report said Namibia’s currency peg to the South African rand means that changes in South African monetary policy have implications for domestic financial conditions.

For vehicle consumers, SSS said the combination of higher fuel and running costs and elevated financing costs was putting pressure on household purchasing power.

The report expects the pressure to be most pronounced in the passenger vehicle segment, while commercial and heavy-vehicle demand remains more closely linked to mining and energy investment.

SSS said this divergence could widen through the remainder of 2026, with passenger demand facing greater affordability pressures while commercial and heavy-vehicle demand benefits from commodity-related capital expenditure.