Zambia vehicles market loses over half its sales due to the global pandemic affecting sales. Indeed, Full Year 2020 sales have been 1.908, down 57.3% compared to 2019. All brands plummet over 50%.
Economic Environment
After the economy slipped into a technical recession in Q2 as the pandemic’s fallout battered the trade and construction sectors, available figures hint at a slow recovery so far.
The external sector, in particular, seems to have staged a strong comeback as soaring shipments of copper—which accounts for the lion’s share of the country’s exports—combined with rallying prices for the commodity due to upbeat demand from China, translated into a massive increase in export revenues in August–September. Domestically, the private sector PMI continued to crawl higher, hitting a near two-year high in October, albeit still pointing to a deterioration in business conditions.
Meanwhile, in late October, S&P Global Ratings cut the country’s credit rating from CCC- to selective default, after the government missed an interest payment and announced the suspension of debt service to external creditors. The country is headed to become the region’s first pandemic-era sovereign defaulter.
Market Trend
The Zambian vehicle market has been affected in 2020 by the global COVID-19 pandemic, which impacted sales significantly.
The new vehicle market in recent years have shown a trend not correlated with the official economic index, growing when the economy was suffering and falling when the economy was recovering. This unusual correlation with the domestic economy is probably depending on the strong import of used vehicles (near 90% of total new vehicles registered each year). When the economy pushes up the demand for vehicles, people buy more vehicles in the low price range (used) while when purchase power is limited, only the upper class and government agencies keep purchasing vehicles.
After three consecutive years of growth, in 2019 the market fell. Indeed, Full-year registrations have been 4.466, down 9.9%.
Full-Year sales for 2020 have been 1.908, reporting a 57.3% decrease compared to 2019.
Brand-wise, this year the leader Toyota (-52.7%) gained 3% market share, followed by Tata (-53.5%), which gained 0.9% share. Isuzu (-58.1%) was in the third position and lost 0.2% market share.
The most sold model in the country remains the Toyota Hilux with 199 sales (-63.1%), holding 10.4% market share.
