The latest data released by the Central Statistics Office show that total vehicle sales, comprising both new and used vehicles, declined 14.3% year-on-year in the first quarter of 2015 to 7,985 units. The decrease highlights the impact of the government’s import ban of aged vehicles, by reducing the supply of affordable vehicles in an economy where income per capita remains low. This coupled with slower economic growth in 2014 leads us to estimate an 8.7% decline in total auto sales in 2014.
“Due to the recent move by Botswana to ban imported second-hand vehicles that are more than five years old from its roads, in solidarity with an earlier move by Namibia, this trade is in part disrupted.” It further reports that “some Zimbabwean importers have been choosing to load vehicles onto containers for their journey through Botswana, thereby not driving them on Botswana’s roads and so not falling foul of the new law, while others have begun opting to import them via South Africa’s port of Durban instead.”
After the sharp decline in 2014, we anticipate a mild recovery in 2015 and forecast sales to grow 4.2% for the full year. Over the 2015-2019 periods, we forecast growth in vehicle sales to average 10.3% to hit 57,133 units by 2019.
Owing to growth in key industrial sectors including mining and construction, commercial vehicles (CVs) will continue to outperform the car segment, representing an increasing percentage of total vehicle sales. Over the next 10 years as a result of the government’s goal to diversify the economy away from dependence on diamond exports the coal sector is likely to be a key driver of CV sales growth. We expect Botswana to become a major player in the global coal sector over the next decade with forecasted production expansions of 89% in 2016 and 108% in 2017. For this reason we expect CV sales to surge, experiencing growth of 8.5% in 2015, to 8,371 units, followed by annual growth averaging 15.5% from 2015 to 2019.
However, one caution is that as Botswana’s statistical data undergoes changes and improvements, the release of official statistics for recent quarters will remain delayed. With only Q114 data currently available, it is likely that forecasts may change over the coming quarters as more timely data becomes available.
In line with central statistics view, Toyota Motor continues to be firm favourite in Botswana. In the first quarter of 2014 it accounted for 4,053 vehicles, of which 2,979 were passenger car registrations, according to latest available data.