Namibia's vehicle market is expected to maintain its momentum through the remainder of 2026, despite a tougher operating environment for consumers and businesses due to rising inflation, fuel prices, and vehicle running costs. According to Simonis Storm Securities (SSS), the forecast remains at between 15 500 and 16 500 vehicle units for the full year. This requires monthly sales of between 1185 and 1435 units from September to December. Since March, the market has recorded between 1 200 and 1 600 units a month.
The vehicle market has shown resilience so far in 2026, with August sales reaching 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 attributes the August decline to a normalisation after a strong July rather than the beginning of a slowdown. The company expects September sales to indicate whether the market maintains its underlying monthly run rate.
Looking ahead to 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. However, 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. A positive outcome would involve a multi-year capital programme of between N$180 billion and N$220 billion.
Despite potential for growth, the immediate issue for the vehicle market is rising costs rather than sales volumes. SSS notes that the increase in vehicle operating costs is significant because it indicates that the cost of owning and maintaining vehicles is 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 highlights that Brent crude has 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%. This 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. SSS said its full-year inflation forecast of 4.3% to 4.6% was above the central bank’s 4.0% forecast. There is 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.
For vehicle consumers, the combination of higher fuel and running costs and elevated financing costs is putting pressure on household purchasing power. SSS expects this pressure to be most pronounced in the passenger vehicle segment. In contrast, commercial and heavy-vehicle demand remains more closely linked to mining and energy investment, which could widen the divergence in demand through the remainder of 2026.
Key points
- Rising inflation and fuel prices are increasing vehicle operating costs in Namibia.
- The vehicle market is expected to sell between 15 500 and 16 500 units in 2026.
- Elevated financing costs and higher fuel and running costs may pressure household purchasing power.
