Performance analysis of automobile industry in taiwan with data envelopment analysis

The development of automobile industry in a country represents the industrial standard of the country that the quantity of automobiles in a country could be treated as the indicator of the living standard. It is why the industrial countries would commit to the development of automobile industry. With the automobile industry performance in 2007-2009 as the research bases, this study integrates Data Envelopment Analysis (DEA) and Malmquist Productivity Analysis to measure the total efficiency (TE), pure technical efficiency (PTE), and scale efficiency (SE) of nine automobile businesses in Taiwan for the manufacturers to further improve the operating efficiency. The empirical results show the average total efficiency being 0.89 in the three years, when Kuozui Motors presents the best performance on total efficiency, pure technical efficiency, and scale efficiency, while Sanyang Industry the worst. With Sensitivity Analysis and Slack Variable Analysis, this study proposes several suggestions for the rest automobile businesses to improve the operation toward the permanent optimal scale.