Two-Step Method Useful For Support of Technical Benchmarking Practice in the Automotive Market

Abstract

The aim of this paper is to present a two-step method useful for support of product benchmarking practice in the automotive industry by measuring a technical value of car model. This method assumes that a car is a bundle of objectively and subjectively measurable attributes (i.e. functional features) provided to users. The car’s technical value is thus a measure of the overall benefit it delivers to users, while the car’s technical efficiency measures a relative benefit the users gain when they utilize a particular car model charged by certain ownership and usage costs. Technical efficiency is calculated by implementing Data Envelopment Analysis (DEA). As an example, the method is implemented to conduct a retrospective benchmarking study in the Italian domestic passenger car market in the years 1970s-1990s. Results show that cars differed remarkably due to their technical efficiency, but only 35 car models in the sample have been classified by DEA as 100 % efficient. Car models sold in the 1980s resulted not so competitive in terms of technical efficiency as models sold in the 1970s and 1990s. The results also revealed that the technical value increases with the purchasing cost, but it diminishes with the usage cost. As additional value to literature and practice, the method suggests insights about how: a) to compare cars in a multi-dimension features space; b) to analyze technological trends in the car industry; c) to study the car market structure and identify the emergence of market niches still unexploited by automotive manufacturers

Efficiency, Conflicting Goals and Trade-Offs: A Nonparametric Analysis of the Water and Wastewater Service Industry in Italy

“…Since its introduction, DEA has been extensively employed in economic analysis to calculate measures of efficiencies in various situations and industries, such as transportation [29,31,32], government and public sector [33][34][35], public utilities [21,22,[36][37][38], healthcare [39][40][41], education [42,43], banking and finance [44,45], energy and environmental studies [46][47][48][49][50][51][52], manufacturing and information technology [53][54][55][56].…”

Congestion effect on renewable energy production efficiency in Europe

“…drinking water management, banking, transportation, healthcare, manufacturing, automotive, energy, education, high-performance computing urban management, etc. [4][5][6][7][8][9][10][11][12][13][14]. In the DEA approach a benchmarking frontier is generated as a set of linear combinations of inputs and outputs of a number of units to be evaluated denominated DMUs.…”

A “value for money” framework to study product competitiveness in the automotive market

“…For the vast majority of consumers who want reliable products at affordable prices, the price for buying the car and the operational cost for using it represent the most relevant purchasing factors. The "value for money" framework that is proposed here is based on the model developed by lo Storto [28], that was adapted from the Saviotti and Metcalfe approach [27]. This framework also takes into account technological features (TF) and functional features (FF) of a product, but adds performance measures associated to functional features (FP) and clusters this functional performance set into a number of categories (FPC) useful to describe categories of functions delivered by the product to the user (Fig.…”

“…However, these subsystems alone are useless, and only if they are effectively integrated together provide the user with the typical functions and performance of a car. As in lo Storto [28] and Saviotti and Metcalfe [27] conceptualizations of a product, technical features relate to what a product is, while functional characteristics relate to what a product does. The users are usually fully ignorant of the technologies embodied in a car and how these subsystems work.…”