Abstract
The study examined the impact of bank consolidation on automotive industry financing.
61 respondents selected through strategic random sampling strategy from GM Motors Nigeria Ltd formed the population for the study.
Data was collected utilizing a survey instrument developed by the researcher. Chi-Square Statistical system was utilised to test the hypotheses and all findings held at .05 alpha considerable level. The Analysis of the information revealed that the participants almost unanimously agreed that bank consolidation had impacted positively to the automobile sector in Nigerian economic climate.
Based on the findings, it was therefore suggested amongst others factors that a standard critique of automotive business in Nigeria by the suitable authorities while effort need to be produced to enhance the power program (electricity situation) in Nigeria.
INTRODUCTION
Background of the Study
Mergers and acquisitions need to be taken seriously as an instrument for enhancing banking efficiency, size, and developmental roles in just about every economy. Mergers and acquisitions in particular in the banking sector is now a international phenomenon.
All more than the planet and offered the function of finance, size has grow to be an imperative ingredient for good results in the globalizing globe. The last handful of years have witnessed the creation of the world's massive banking groups by means of mergers and acquisitions. The trend has been influenced by variables such as prospects of cost-savings due to economies of scale as nicely as far more effective allocation of resources, enhanced efficiency in resource allocation, and threat reduction arising from enhanced management. Still, the automotive industry is not left out in the method of alliances. More than the years the market has witnessed diverse types of worldwide alliances. For instances Renault- Nissan, VW-Skoda, GM-Daewoo to mention a few them
In the past, the smaller size of most Nigerian banks, each with high priced headquarters, heavy fixed fees and operating expenses and with bunching of branches in handful of commercial centers had lead to incredibly high average cost for the business. This in turn has implications for the price of intermediation, the spread in between deposit and lending rates, and puts undue pressures on banks to engage in sharp practices as signifies of survival. In an work to survive the hurdle, the Central Bank of Nigeria introduced the 25 billion Naira minimum capital base for banks in an work to make our banks substantially stronger and to in a position to compete favorably with other banks in the world in providing credit facilities to other sectors of Nigeria economic climate.
Nonetheless, in 2004 as part of economic reform in some emerging economies, the Nigerian banking program underwent impressive modify, in terms of the number of institutions, ownership structure, as well as depth and breadth of operations. Banks begin to merge with other banks while larger banks begin to acquire smaller ones though automotive industry has develop into an increasingly pertinent contributor to country's' gross domestic product, mainly by way of robust growth in the motor industries in terms of escalating volume of neighborhood production and number of sales. And this is not peculiar to Nigeria alone.
This scenario raises the question "what impact of banks consolidation on automotive business financing in Nigeria? It is crucial to envision this evolution from a life cycle of production assembly and sales that have impacted on the financial statements of GM Motors Nig LTD. In order to sustain this method, the automotive industry as a entire needs significant capital intensity from powerful and trustworthy financial back- up to stay viable in the economic climate and optimize their environmental impact, communicate positive steps to non-governmental organization and other stakeholders to discharge their social corporate responsibilities when maintaining style of product, service program from a sustainability point of view. Hence this function 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 sector and a single of the leading motor automobile assemblers and marketers in the country. GM Nigeria is a joint venture enterprise amongst UAC of Nigeria Plc - one particular of the most significant conglomerates in Nigeria and General Motors Corporation of Detroit, the world's biggest automobile manufacturers. The relationship of these two organizations gives them the preferred help and advantage in all facets of their operations, i.e. Sales, Parts, Services and Assembling.
About GM International
Common Motors Corp. (NYSE: GM), the world's largest automaker, has been the international business sales leader given that 1931. Founded in 1908, GM at this time employs about 321,000 folks about the globe. 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 - Began as a Firm called Miller Brothers Nigeria Limited which imported vehicles in to West Africa
1927 - Started importing totally assembled Bedford commercial vehicles into Nigeria.
1929 - Became the Motors Department of then UAC, now known as UACN Plc
1931 - Name altered to Niger Motors Limited. Continued importing built vehicles.
1949 - Commercial Vehicles were shipped in as double unit packs which contained partially assembled chassis for two vehicles in a single pack and the wheels in the second pack to be assembled locally.
1959 - Established Nigeria's First Automobile Assembly Plant at Apapa. The Provider assembled the favorite Bedford Trucks of diverse models.
1965 - The Assembly Plant was renamed Federated Motors Industries, Then popularly recognized as "FMI" and the distribution arm remained "Niger Motors".
1979 - FMI started the assembly of trucks from "absolutely knocked down" (CRD) components.
1980 - The Federal Government accorded FMI the "Progressive Car Manufacturer" status, under the Approved User Scheme. This nomenclature was to attest to its high regular and top quality merchandise at that period. FMI and Niger Motors were converted into divisions of UACN Plc.
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