Assessing Performance of Automobile Industry Using Malmquist Productivity Index With R

Abstract

The aim of this study is to measure the performance of the top ten automobile manufacturers for the years 2011 to 2016. After evaluating the data from annual reports, only six manufacturers meet the requirements. The Malmquist productivity index (MPI) is used as the measurement of performance. The MPI consists of two elements: the technical efficiency change index (TECI) and the technological change index (TCI). The 'productivity' package in the open-source programming language known as 'R' is used to estimate the MPI, TCI, and TECI with input and output orientations. The results suggest that the productivity of the automobile industry increased during the period under evaluation. The average productivity scores for the top three manufacturers are as follows: Toyota (1.4844), Volkswagen (1.3382), and Mercedes-Benz (1.4444). However, there are still some industries whose productivity score is less than 1: Ford (0.9846), Honda (0.9925), and Nissan (0.9999). The newness of this study stems from the use of MPI in the global automobile industry, using R language, an open-source application for processing data.