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Tuesday, December 12, 2006

SHANGHAI, China, Dec. 12 /PRNewswire/ -- Rapid growth in the Chinese automotive sector has created the need for an effective and efficient logistics infrastructure, to take advantage of growing domestic as well as export opportunities. In addition, intensifying competition as companies look to increase market penetration and optimize the supply chain presents a substantial market opportunity to third-party logistics (3PL) service providers.

"An increasing number of automotive companies prefer to focus on core competencies and outsource non-core activities such as logistics to specialized 3PL service providers, to benefit from cost savings and enhanced efficiency," remarks Frost & Sullivan Research Associate Keow Soon Hiong. "At the same time, the Chinese Government's focus on improving the country's logistics infrastructure has been instrumental in encouraging significant investment from multinational 3PL service providers."

New analysis from Frost & Sullivan (http://www.transportation.frost.com ), Strategic Analysis of 3PL Markets in the Chinese Automotive Sector, finds that these markets earned revenues of $10.45 billion in 2005 that are likely to reach $59.91 billion by 2012.

If you are interested in a virtual brochure, which provides manufacturers, end users, and other industry participants with an overview of the latest analysis of 3PL markets in the Chinese automotive sector, then send an e-mail to Danielle White, Corporate Communications, at dwhite@frost.com with your full name, company name, title, telephone number, fax number, and e-mail address. Upon receipt of the above information, an overview will be sent to you by e-mail.

Adoption rates of these services are already high among multinational automotive companies due to higher acceptance levels. This is compelling domestic major automotive companies to follow suit in order to retain a competitive advantage. Accordingly, 3PL service providers are gearing up to meet the expected rise in demand by expanding their offerings and providing complete services at relatively affordable prices.

However, providers are expected to face a considerable challenge in dealing with the varying levels of logistics infrastructure and development across China. Additionally, significant differences between various regions in terms of consumer habits as well as business, tax, and administrative rules tend to shape the logistics needs of the automotive sector on a regional basis. This could hamper providers' efforts to offer a complete nation-wide logistics solution.

For instance, the automotive sector is better developed in some parts of the east and south compared to others in the central and western regions. Thus, the key challenge for 3PL service providers is to accurately assess the specific needs of a particular region and offer services accordingly.

"Since the Chinese automotive sector is continuously developing, it is important for service providers to grow in tandem with automotive companies so as to emerge successful," observes Soon Hiong. "Service providers also need to assess the geographic needs and expansion plans of end-users and offer appropriate services including advanced concepts such as just-in-time (JIT) logistics."

A significant development that is likely to positively impact the logistics industry is the elimination of restrictions on operating in the industry following China's accession to the WTO in 2001. Foreign enterprises can now operate as wholly-owned subsidiaries in services such as transport, warehousing, freight forwarding, and others.

The stage is therefore set for substantial growth of 3PL services and the opportunities for service providers are plentiful. However, to fully exploit the potential of this promising market, service providers need to find ways to meet the challenge presented by China's geographical diversity as well as familiarize themselves with local jurisdictions, so that they are able to incorporate a higher degree of uniformity in their service offerings.

Strategic Analysis of 3PL Markets in the Chinese Automotive Sector part of the Asia Pacific -- Logistics Subscription provides a comprehensive overview of this market, including an analysis of the various segments of the automotive sector and their respective logistical needs. It also provides an in-depth analysis of key drivers, restraints, and trends that are impacting the 3PL markets in the automotive sector. Interviews with the press are available.

Frost & Sullivan, a global growth consulting company, has been partnering with clients to support the development of innovative strategies for more than 40 years. The company's industry expertise integrates growth consulting, growth partnership services, and corporate management training to identify and develop opportunities. Frost & Sullivan serves an extensive clientele that includes Global 1000 companies, emerging companies, and the investment community by providing comprehensive industry coverage that reflects a unique global perspective, and combines ongoing analysis of markets, technologies, econometrics, and demographics. For more information, visit http://www.frost.com

      Strategic Analysis of 3PL Markets in the Chinese Automotive Sector
                                   P04D-18

     Contact:
     Danielle White
     Corporate Communications - Global / North America
     P: +1.210.247.2403
     F: +1.210.348.1003
     E: dwhite@frost.com

     Michael Banks
     Corporate Communications - Europe
     P: +44 (0)20 7915 7876
     F: +44 (0)20 7730 3343
     E: michael.banks@frost.com

     Alice Chia
     Corporate Communications - Southeast Asia & ANZ
     P: +603.6204.5899
     F: 603.6201.7402
     E: alice.chia@frost.com

     Ravinder Kaur
     Corporate Communications - South Asia, Middle East
     P: +91 44 42044515
     F: +91 44 24314264
     E: ravinder.kaur@frost.com

     Jorgelina Pecina
     Corporate Communications - Latin America
     P: 54-11 4777-9951
     F: 54-11 4777-0071
     E: jorgelina.pecina@frost.com

     http://www.frost.com

Keywords in this press release: 3PL, third-party logistics, China, automotive sector, 3PL service providers, 3PL end-users

SOURCE Frost & Sullivan

For further information: Danielle White, Corporate Communications - Global - North America, +1-210-247-2403, or fax, +1-210-348-1003, or dwhite@frost.com , or Michael Banks, Corporate Communications - Europe, +44-0-20-7915-7876, or fax, +44-0-20-7730-3343, or michael.banks@frost.com , or Alice Chia, Corporate Communications - Southeast Asia & ANZ, +603-6204-5899, or fax, +603-6201-7402, or alice.chia@frost.com , or Ravinder Kaur, Corporate Communications - South Asia, Middle East, +91-44-42044515, or fax, +91-44-24314264, or ravinder.kaur@frost.com , or Jorgelina Pecina, Corporate Communications - Latin America, +54-11-4777-9951, or fax, +54-11-4777-0071, or jorgelina.pecina@frost.com , all of Frost & Sullivan

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