Comparative Analysis On The Efficiency Between The Domestic And Foreign Auto Enterprises In China

After 60 years of development, china’s auto industry has become one of the most important pillar industry of national economy, in 2013 the industrial output of auto industry has reached nearly 4 trillion RMB, and the automobile production and sales have reached 23722900 and 23491900 respectively in 2014, which make the china be the world’s largest car market for the past six years. The auto industry has become one of the most important pillar industries of the national economy. But for a long time China auto market is occupied by foreign car companies, domestic auto-mobile enterprises in the efficiency is quite low compared with foreign automobile enterprises, it is necessary to study the difference in efficiency and the factors that lead to the efficiency difference between domestic and foreign automobile enterprises.This paper studied the efficiency difference between domestic and foreign auto companies by DEA method and the Malmquist index, research shows that the foreign auto enterprises is more effective in technical efficiency from a static perspective, and surpass the domestic auto enterprises in technical efficiency rate improving, though both of them have got improved in technical efficiency. (2) in the scale efficiency, both domestic and foreign automobile enterprises on the whole are in the stage of decreasing returns to scale, while the average scale efficiency change of foreign auto company and domestic company from 2007 to 2013 is 1.05 and 1 respectively, which show the difference in scale efficiency changes between foreign and domestic auto companies. (3) Both the foreign and domestic auto enterprise’s average Technological Change are more than 1 which shows that both of them have get improved in technology. But there is 0.188 differences in Technological Change between foreign and domestic auto enterprises. (4)In the dynamic efficiency change, both in the total factor productivity, technological progress and technical efficiency, domestic auto enterpris-es lag behind foreign auto companies. although the overall efficiency of domestic automobile enterprises continue to improve, but the pace of ascension slower than foreign car companies, which lead to widening the gap between the domestic and foreign automobile enterprises on the efficiency.Then this paper studies the difference between the domestic and foreign automobile enterprises in four aspects which are enterprise scale, market share, capability of independent innovation and development and the critical component of automobile. The research shows that:(1) Though the domestic auto enterprise have surpass the foreign auto enterprise in total assets and gross industrial output, the number of domestic enterprise is so much that decentralize the production, which result in that domestic auto companies are inferior to foreign car companies in total assets and industrial output. (2) In the terms of market share, foreign brands occupy the dominant position in the vehicle market, especially in the high-end car market. The domestic automobile enterprises are mainly concentrated in low-car market, which had a bad effect on efficiency of domestic automobile enterprise. Foreign auto enterprise now has paid more attention to the low-end market which may make the things worse. (3) In the technology level and R&D investment, on the one hand, the domestic auto companies continue to increase investment, but compared with foreign auto companies there still more to work on, on the other hand the domestic auto companies have surpass the foreign companies in the amount of patent application, but compared with foreign companies, domestic companies need to improve the structure of the patent application. (4) In the auto parts market, foreign car companies dominant the market of critical automobile component. Foreign companies obtain high profits through controlling of critical component which compress the profit space of domestic companies. In fact, even the domestic automobile production enterprises select the foreign on in the choice of component suppliers, so the domestic company are lower in the comprehensive efficiency compared with foreign companies.Finally this paper gives suggestions on how to improve the efficiency of domestic automobile enterprises. Domestic automobile enterprises should ac-celerate the pace of mergers and acquisitions, expanding overseas market, in order to improve the production scale and market share. Increase R&D investment to improve the capability of independent innovation, improve the localization rate of key parts. The government should use the procurement policies to support the development of domestic automobile enterprise.