Abstract
The study examined the impact of bank consolidation on automotive sector financing.
61 respondents chosen by means of strategic random sampling technique from GM Motors Nigeria Ltd formed the population for the study.
Data was collected applying a survey instrument designed by the researcher. Chi-Square Statistical strategy was put to use to test the hypotheses and all findings held at .05 alpha significant level. The Evaluation of the information revealed that the participants just about unanimously agreed that bank consolidation had impacted positively to the automobile sector in Nigerian economic climate.
Based on the findings, it was hence advised amongst other individuals factors that a typical review of automotive market in Nigeria by the appropriate authorities whilst effort should be produced to enhance the power system (electrical energy situation) in Nigeria.
INTRODUCTION
Background of the Study
Mergers and acquisitions should really be taken seriously as an instrument for enhancing banking efficiency, size, and developmental roles in just about every economic climate. Mergers and acquisitions primarily in the banking market is now a global phenomenon.
All over the world and given the function of finance, size has turn into an necessary ingredient for achievement in the globalizing globe. The final couple of years have witnessed the creation of the world's significant banking groups through mergers and acquisitions. The trend has been influenced by variables such as prospects of expense-savings due to economies of scale as nicely as a lot more efficient allocation of resources, enhanced efficiency in resource allocation, and risk reduction arising from enhanced management. On the other hand, the automotive industry is not left out in the method of alliances. More than the years the industry has witnessed numerous varieties of global alliances. For instances Renault- Nissan, VW-Skoda, GM-Daewoo to mention a few them
In the past, the small size of most Nigerian banks, every single with highly-priced headquarters, heavy fixed charges and operating expenses and with bunching of branches in few commercial centers had lead to highly high average expense for the market. This in turn has implications for the cost of intermediation, the spread between deposit and lending rates, and puts undue pressures on banks to engage in sharp practices as implies of survival. In an effort to survive the hurdle, the Central Bank of Nigeria introduced the 25 billion Naira minimum capital base for banks in an effort to make our banks substantially stronger and to able to compete favorably with other banks in the planet in supplying credit facilities to other sectors of Nigeria economy.
Having said that, in 2004 as component of economic reform in some emerging economies, the Nigerian banking system underwent exceptional adjust, in terms of the number of institutions, ownership structure, as well as depth and breadth of operations. Banks begin to merge with other banks although larger banks begin to acquire smaller ones though automotive industry has come to be an increasingly pertinent contributor to country's' gross domestic item, primarily by means of strong growth in the motor industries in terms of growing volume of nearby production and quantity of sales. And this is not peculiar to Nigeria alone.
This scenario raises the question "what impact of banks consolidation on automotive sector financing in Nigeria? It is fundamental to envision this evolution from a life cycle of production assembly and sales that have impacted on the monetary statements of GM Motors Nig LTD. In order to sustain this approach, the automotive industry as a whole needs significant capital intensity from robust and dependable monetary back- up to remain viable in the economy and optimize their environmental impact, communicate positive actions to non-governmental organization and other stakeholders to discharge their social corporate responsibilities even though preserving design of product, service method from a sustainability point of view. Hence this operate is set to assess the impact of bank consolidation and capital provision for the automotive sector financing in Nigeria (A case study of GM Nigeria ltd)
COOPERATE PROFILE OF GM MOTORS LTD
GM Nigeria is a foremost player in the automotive business and one particular of the leading motor automobile assemblers and marketers in the country. GM Nigeria is a joint venture company in between UAC of Nigeria Plc - one of the greatest conglomerates in Nigeria and General Motors Corporation of Detroit, the world's largest automobile producers. The relationship of these two suppliers provides them the most beneficial assistance and benefit in all facets of their operations, i.e. Sales, Parts, Services and Assembling.
About GM International
General Motors Corp. (NYSE: GM), the world's largest automaker, has been the international market sales leader considering that 1931. Founded in 1908, GM right now employs about 321,000 many people around the planet. It has manufacturing operations in 32 countries and its vehicles are sold in 200 nations. GM's automotive brands are Buick, Cadillac, Chevrolet, GMC, Holden, HUMMER, Oldsmobile, Opel, Pontiac, Saab, Saturn and Vauxhall. In some nations, the GM distribution network also markets vehicles manufactured by GM Daewoo, Isuzu, Subaru and Suzuki
Brief History of GM Motors in Nigeria
1920 - Started as a Provider named Miller Brothers Nigeria Restricted which imported autos in to West Africa
1927 - Started importing totally assembled Bedford commercial vehicles into Nigeria.
1929 - Became the Motors Department of then UAC, now identified as UACN Plc
1931 - Name altered to Niger Motors Limited. Continued importing built vehicles.
1949 - Commercial Vehicles had been shipped in as double unit packs which contained partially assembled chassis for two vehicles in one particular pack and the wheels in the second pack to be assembled locally.
1959 - Established Nigeria's 1st Car Assembly Plant at Apapa. The Company assembled the trendy Bedford Trucks of many different models.
1965 - The Assembly Plant was renamed Federated Motors Industries, Then popularly recognized as "FMI" and the distribution arm remained "Niger Motors".
1979 - FMI began the assembly of trucks from "completely knocked down" (CRD) components.
1980 - The Federal Government accorded FMI the "Progressive Vehicle Manufacturer" status, beneath the Approved User Scheme. This nomenclature was to attest to its high standard and top quality goods at that period. FMI and Niger Motors were converted into divisions of UACN Plc.
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