Sales tax is the key economic driver for the City of Signal Hill, making up 68% of the city’s general fund revenue – around $15 million annually. Each of the city’s six auto dealerships appears on the list of Top 25 sales tax generators for the Signal Hill.
“The city is business friendly; they want to help. They want to see [auto dealers] do better, so they’re always reaching out and seeing what they can do to help us take care of our customers and sell more cars for their tax base,” Bob Davis, president of Glenn E. Thomas Dodge Chrysler Jeep Ram, said. “We’ve enjoyed our relationship with the city, and the police department’s great. It’s a good place to do business.”
Compared to last year, Davis said the dealership has experienced a slight uptick in sales, particularly for the Jeep product. Used car business is also up, he said. The last several years have been exceedingly strong for the industry in general, he noted. When the market is hot for an extended period of time, a plateau or even a decline in business is expected, he explained. For now, Davis said business is holding. With increasing interest rates and gas prices, he said it will be interesting to see what 2019 has in store for the auto industry.
While it is not in the dealership’s immediate plan, Davis and other Signal Hill dealers would like to expand. A lack of space, however, makes expansion difficult, he said. Despite the lack of space for existing dealers, the City of Signal Hill recently entered into an exclusive right to negotiate agreement with Signal Hill Properties LLC, also known as the Shelly Group, to develop a 3.13-acre pre-owned auto dealership on a vacant Cherry Avenue site.
At Glenn E. Thomas, 80% of inventory that is sold are Jeeps and Ram pickup trucks. The remaining business is for cars, such as the Dodge Charger and Challenger, the Chrysler 300, among other models. Increased sport utility vehicle and truck sales is an industry-wide trend, Davis said.
“Our parts department is number one in California in Chrysler parts. So we have a real large department. We do a lot of wholesaling of parts to garages, body shops and other vendors,” Davis said. “We have a lot of service customers and we have a lot of fleet accounts too. Our parts and service business is up probably 15% from last year.”
Boulevard Buick/GMC Cadillac has had a strong year, according to co-owner Brad Willingham. While Cadillac sales have been flat year over year, Buick/GMC and the dealership’s collision center are up 15% and 5.4%, respectively.
Over the past year, the Buick brand has continued its comeback after years of industry concern that it would go out of business like Oldsmobile and Pontiac, Willingham said. Since surviving the GM bankruptcy in 2008, Buick has become popular in China, which saved the brand, he said. Buick’s momentum is also due to a push to appeal to Millennials, Willingham added.
“When I was a kid growing up, there was nobody my age . . . who ever thought about buying a Buick,” Willingham said. “So it’s really refreshing to see that now. My son’s 24-year-old fiancée, for example, just came in and bought a Buick Encore. That doesn’t happen unless the marketing is strong and appealing to younger people. And that’s something I never thought I’d see in my lifetime.”
The Cadillac comeback started around 2009, Willingham said. With each passing year, he said the brand has gotten stronger, following the upswing of the economy. Recently, Cadillac has been trying to change the way its vehicles are marketed and sold at local dealerships, a strategy which could detract from the localized approaches dealerships use to reach residents, Willingham explained. Because of this push by Cadillac, there has been some friction with dealerships – but that hasn’t made the brand any less successful, he added.
The Boulevard Collision Center handles many insurance company claims, and the body shop continues to do well, Willingham said. He explained that many dealers gave up on their body shops because they thought they would not be able to compete with independent shops. However, Willingham said Boulevard has proven that notion wrong, as it successfully competes in the body shop arena.
Overall, Willingham said the city has always been helpful when the dealership has a project, such as its 2011 remodel. He added that operating in Signal Hill is “terrific,” but not without its challenges.
“We continue to struggle to attract people to this auto mall. It’s a tough deal. There’s no visibility from the freeway, except the beautiful freeway sign to let people know that we’re here,” Willingham said. “Residents of Long Beach don’t typically come up Cherry Avenue to get to the freeway, so even our own local residents don’t always know that we’re here. So we’re always trying to get the word out.”