Dropping oil price affects Thailand’s car exports

BANGKOK, 28 December 2014 (NNT) - Thailand’s export value during the past 11 months this year contracted by 0.4% compared to the same period in 2013 mainly due to continuous rubber price drop and disappointing car exports to major markets.

The Ministry of Commerce reported that Thailand’s export value in November 2014 stood at 18.5 billion USD, decreasing by 1% while the import value was 18.6 billion USD, dropping by 3.5%, resulting in a trade deficit. What caused the deficit also included decreasing processed seafood, computer and computer parts exports.

The continuously decreasing global oil price also affected Thailand’s exports of oil products which accounted for 4% of the total exports. The oil price drop also led to a 29.5% decrease in Thailand’s exports of cars and auto parts to its major markets such as Australia, Indonesia and the Middle East.

-- NNT 2014-12-28

I do not understand why would price drop of oil affect car exports?

If driving is cheaper more people would buy cars, no?

And if more people are buying cars that would mean more are exported, no?

i think this is a case of thai logic at work here .............. why cant they just admit there is a massive WORLD slowdown ahead

I do not understand why would price drop of oil affect car exports?

If driving is cheaper more people would buy cars, no?

And if more people are buying cars that would mean more are exported, no?

I was a bit stumped also. I'm guessing it's because these other countries are also going into recession due to the drop in oil prices???

In the land of FUBAR it's always something else at fault

It's interesting how almost every news outlet is talking about what a disaster these dropping oil prices are.

I suppose if house prices dropped enough for young middle class people to actually buy a house, it would be reported as a MAJOR CATASTROPHE!

This article is as confusing as it could get. Makes zero sense unless one really tries hard to come up with somewhat unlikely but plausible scenarios to support the figures quoted in the last paragraph.

Here's a stretch for you... lower oil price, means lower exploration, means less revenue for some companies to buy new cars and trucks. Yea I know.....or it could be lower oil price, less profit for everyone in the business, smaller bonuses = less new cars sold to employees... Yea I know, I am struggling.

Overall lower oil price will do good for the world economy, we need to wait a little for the results but it is certainly a good thing. Some industries may suffer as a result though. That is life. I believe Thailand will keep improving now, with all the protests and trouble it was hard to do business so glad to see things improving. Next year SET could hit 1,800 and many Thai companies are doing very well.

Overall lower oil price will do good for the world economy, we need to wait a little for the results but it is certainly a good thing. Some industries may suffer as a result though. That is life. I believe Thailand will keep improving now, with all the protests and trouble it was hard to do business so glad to see things improving. Next year SET could hit 1,800 and many Thai companies are doing very well.

I almost gave you a like, until you said that Thailand would improve next year.

Oil price drop is favorable for the world economy, because in every product the oil price is a factor, even in food products.

Now because the world economy may improve next year ( maybe) doesn't mean the people will increase spending on the 1st of January 2015.

Thailand still need to acknowledge the effects of the WORLWIDE economic downturn, so we will see a fall before we see a recovery.

You just can't keep talking up the figures.

Rubber price is linked to Oil price.

I thought it was because too many people in the World

are up to their eyes in debit,and could not afford to buy

a new car,plus not knowing for sure if they would be in

work next month or near future.

regards Worgeordie

I find myself confused by the article. I speculate that oil exporting countries now have less money to spend on imports. But I don't really understand what is being said here.

I do not understand why would price drop of oil affect car exports?

If driving is cheaper more people would buy cars, no?

And if more people are buying cars that would mean more are exported, no?

what you don't understand is the logic of "The Nation's" journalists

Heck, falling oil prices makes vehicles more affordable to drive which entices to people to buy a vehicle.....failing oil prices is like a tax cut which leaves more money in a peoples pockets making them feel a little richer which entices them to go buy stuff like maybe a new vehicle. Falling oil prices should increase vehicle sales, not decrease them...and without the current falling prices sales would have probably been even lower in Thailand. But what does this NNT article do? They try to blame falling oil price for some of Thailand's problems. Just think if oil prices had been rising and fuel prices had risen...heck, people would have cut back even more in buying vehicles.

Please note the article source is the National News Bureau of Thailand (NNT) which is part of the Government Public Relations Department. That is, the NNT is a propaganda vehicle for the govt. Many news story are written to support the government. So when you see a news story from NNT just keep in mind it's a news agency controlled by the government.

NATIONAL NEWS BUREAU OF THAILAND (NNT), GOVERNMENT PUBLIC RELATIONS DEPARTMENT

Edited December 29, 201411 yr by Pib

One uneducated guess is someone here heard that Western markets, especially the US are expected to reduce replacement of gas guzzlers for better mileage autos for the short term, and he is focusing on the Japan to US market while TH makes parts for that. On second thought, just not logical thought and what's new?

Bull & Defecation in pink color.

I dont care...

Overall lower oil price will do good for the world economy, we need to wait a little for the results but it is certainly a good thing. Some industries may suffer as a result though. That is life. I believe Thailand will keep improving now, with all the protests and trouble it was hard to do business so glad to see things improving. Next year SET could hit 1,800 and many Thai companies are doing very well.

I almost gave you a like, until you said that Thailand would improve next year.

Oil price drop is favorable for the world economy, because in every product the oil price is a factor, even in food products.

Now because the world economy may improve next year ( maybe) doesn't mean the people will increase spending on the 1st of January 2015.

Thailand still need to acknowledge the effects of the WORLWIDE economic downturn, so we will see a fall before we see a recovery.

You just can't keep talking up the figures.

Partly correct, its favorable for oil import countries but negative for export countries. As the US has become an export country it will be negative for them. Many of the US jobs created after 2008 was in the shale oil industry and if the low oil price persist these jobs could be lost. In the end the lower oil prices is a zero sum game, on the one side certain people gain and on the other side people lose. It can also be very negative for stocks as the Saudi's was pumping their extra funds into the world market and with the present price they will run a deficit. At $ 50 a third to half of the shale companies will be running at a loss and most of them are financed through HY bonds, this could trigger a collapse of HY bonds.

Rubber price is linked to Oil price.

Don't understand that either. Rubber comes from trees, not from oil and has many uses besides manufacturing car tyres: http://www.polymer-search.com/rubber.html

strange

tourism is supposed only to be 8-10% of the thai economy, but they are touting about 1 TRILLION in revenu

and now they speak about car exports for only about 18.5 billion US$

They are probably going to use this as an excuse as to why the drastic drop in world oil prices are only minimally effecting the price at the pump here in Thailand

They are keeping the price high to protect another Thai industry

It's good for PTT shareholders. Perhaps buying their shares is a good idea.