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Increased Awareness to Drive Growth in Indonesian 3PL Automotive Sector

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Increased Awareness to Drive Growth in Indonesian 3PL Automotive Sector

Mumbai, Maharashtra, India

Increased awareness of the benefits of third party logistics (3PL) among local automakers in Indonesia is likely to drive growth in the 3PL automotive sector.

New analysis from Frost & Sullivan (, Strategic Analysis of 3PL Markets in the Indonesian Automotive Sector, reveals that the 3PL market for the Indonesian automotive sector reached USD86.5 million in 2006, and it is estimated to reach USD258.3 million in 2013.

If you are interested in a virtual brochure, which provides manufacturers, end users, and other industry participants with a strategic overview of the 3PL markets in the Indonesian automotive sector, then send an e-mail to Ravinder Kaur, Corporate Communications, at , 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.

"Witnessing the benefits gained by foreign automakers by using 3PL services, domestic automakers have also begun to use them," says Frost & Sullivan Research Analyst Keow Soon Hiong.

"More automakers are starting to believe that 3PL companies can provide them with professional logistics solutions, trigger more innovative ideas in managing their supply chain and increase their competitive advantages in the market," he adds.

Keow also says that the entry of foreign automakers and automotive logistics companies further expands the 3PL market.

He adds that most of the major players in the Indonesian automotive sector were joint venture companies between the local state-owned companies and foreign multinational automakers.

"The foreign automakers had invited international automotive logistics companies to provide advanced technologies and logistics solutions to suit their needs, thus leading to market growth," he says.

He also says that the consistently high importance given by the Indonesian government to the logistics sector through the steady development of related infrastructure in the country such as developing organized railway and roadway system some funded entirely by the government and others through private enterprise and foreign participation (Toll Road concept) are likely to improve the efficiency of in land transportation scenario in Indonesia.

These will definitely favor the growth of automotive 3PL market in Indonesia.

However, expanding domestic network coverage is becoming a major challenge due to the lack of well-developed infrastructure connecting the Indonesian archipelago. The uncertain political situation that exists across the islands of Indonesia also affects investments from private enterprisers. It is important that the service providers assess the geographic needs and accordingly offer advanced services such as just in time (JIT) logistics.

"In addition, the highly complex federal regulations set by the Indonesian Government prove difficult for foreign logistics service providers, curtailing their efforts to offer complete nation-wide solutions to their clients," notes Keow.

"The use of cost-effective 2PL solution by Indonesian automakers also acts as a major market deterrent," he adds.

3PL service providers can allay such challenges by introducing customized solutions at relatively lower price to help the Indonesian automotive sector to effectively tap the under-explored potential markets in the rural areas, and in the low-economic regions. To enable this, 3PL providers are likely to build nationwide infrastructure by investing heavily in transportation and warehousing so as to offer a complete logistics solution.

Future market development depends on promoting logistics-related professional courses, which would help eliminate the shortage of logistics professionals over the years. By 2010, the market is expected to grow significantly as a result of the Indonesian Government's ASEAN Free Trade Area (AFTA) agreement, which will allow free import and export activity in the market.

Strategic Analysis of 3PL markets in the Indonesian Automotive Sector is part of the Automotive & Transportation Growth Partnership Service, which also includes strategic analysis of 3PL markets in the Chinese automotive, retail, and FMCG sectors; the 3PL markets in the Indian retail, FMCG, IT Hardware and consumer electronics sectors; 3PL markets in the Malaysian FMCG and automotive sectors; and also the trends and preferences of ASEAN 4 logistics users. All research included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants. 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 service, 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

Strategic Analysis of 3PL markets in the Indonesian Automotive Sector

Ravinder Kaur, Corporate Communications - South Asia, Middle East, Frost & Sullivan, +91 (044) 4204 4515

Alice Chia, Corporate Communications - Southeast Asia & ANZ, Frost & Sullivan, +603 6204 5899

Source: Frost & Sullivan (Business Wire India)

Press release presented here is sourced from the Source mentioned above and is provided on as-is basis. Please contact the Company / Source directly for any further information in regard to this release. This website will be unable to assist you in regard to the accuracy or correctness of information in this release.

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