Thursday, October 29, 2020

Botswana record strong demand for grey imports

While some local businesses on Botswana are experiencing slowed growth due to economic challenges that have affected consumers, the motor vehicle registrations data offers different insights.

Motor vehicle registrations in the first quarter of the year is the highest in over a decade as consumer demand for cars refuses to wane amid retrenchments, stagnated wages and rising unemployment rate. In the latest transport and infrastructure report from Statistics Botswana, the first quarter of the year recorded 12, 581 first registrations, up by 15.7 percent from the corresponding period last year.

The spike in the first quarter motor vehicle registrations was down to strong demand for used imported vehicles, which represented about 82.2 percent. Brand new vehicles contributed 17.6 percent. Of the used cars, 91.5 percent of them were passenger cars with 73 percent of the cars sourced from Japan, placing the country on top of main car exporters to Botswana. Botswana’s main trading partner, South Africa, was responsible for 83.8 percent of brand new cars that made their way to Botswana.

The narrative that Botswana is still a Toyota country continues to play itself out with Toyota occupying the number spot in the local vehicle market , contributing 40.3 percent of total first registrations. Also not surprising was Honda clinching the second spot, representing 15.1 percent of new registrations in the first quarter. Honda Fit, the automaker’s low entry model, has found popularity with consumers for its affordable price and low fuel consumption, making it perfect for running office errands, and also popular for public transport operators.

While the first quarter vehicle registration declined 16.4 percent when compared to the last quarter of 2017, it offers great insights: new vehicle registrations in Botswana tend to be strongest in the last quarter of the year, just in time for the December holidays. Furthermore, the broader trend has been a dizzying increase of new cars every year, with vehicle registrations growing as much as 60 percent between 2008 and 2017.

Now with the first quarter of the year registering the strongest first quarter in over a decade, it appears the local vehicle market is due for another bumper harvest while some economic challenges saddle the consumer’s disposable income.

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