Note:  Click on blue text for links to documents.

When I opened Fremont’s first Buick dealership in 1980, Buick was a brand that made for a viable, standalone dealership.  That status continued until a drastic drop in Buick sales nationally in the late 1980’s and beyond created the need for additional brands to maintain business viability.  GM’s evolutionary shift to a dominant truck portfolio in the 1990’s made survival for a GM dealership without Chevrolet or GMC increasingly impossible.  Our addition of Cadillac in 1990 made up for a small part of the lost Buick sales, but not enough to offset Buick’s future near collapse.  This ongoing decline of Buick sales coincided with a dramatic ongoing influx of high-income, GM-shunning Asian immigrants to my Fremont-Newark market and created what evolved into probably the most challenging sales environment anywhere for upper end domestic cars.

Don Signer Buick high sales volume in early years with a viable Buick product

As can readily be seen in the dealership’s historical sales chart(Excel)   (pdf file), my dealership was a much higher volume dealership in its early years before Buick began its decline in the mid-1980’s, which has continued virtually uninterrupted ever since.  During the first 6 years, I was seen as a leading dealer, always ranking in the top 3 or 4 of the approxi­mately 16 Bay Area Buick dealers in retail sales.  Additionally, we were consis­tently the top dealer in District 2, which consisted of approximately 21 dealers in the East Bay section of the Bay Area, and up into Northern California. 

I feel a major reason for our success was our use of Automotive Profit Builders, a sales consulting firm that trains sales managers and salespeople in professional sales tech­niques and customer treatment.  When Buick was viable, we were able to afford regular training visits, as well attract and retain top people.  But that was to erode with the drastic decline in Buick sales over the years.  As GM shifted its product emphasis from cars to trucks in the 1990’s and beyond, GM repeatedly denied me the opportunity to channel with Pontiac-GMC to maintain viability like other dealers.

During the 1980’s, we were consistently sales effective, which compared our market penetration with the San Francisco Zone, which consisted of Northern California and several western states.  In the late 1980’s, GM changed its effectiveness rating method to a comparison to national market penetration, putting California dealers as a great disad­vantage due to the high import penetration here.  However, the Project 2000 report I received in early 1993 showed sales needed to be at state average penetration for 1987 through 1991.  Our actual Buick retail sales were 129% of state average for the five years, certainly putting us among the leaders of Bay Area dealerships.

Asians dominate Signer market area

Concurrent with Buick national sales decline beginning in the late 1980’s and continuing ever since, my local market experienced a massive shift in its demographic makeup away from its largely blue-collar base.  The explosive growth of neighboring high technology Silicon Valley prompted large quantities of new housing in Fremont to be built at somewhat lower prices than the ones closer to the large employers.  The result was Fremont’s magnetic draw to well-educated Asian immigrants, including Asian Indians, seeking the high paying jobs, who in turn bought the vast majority of these new houses.  Due to Asians’ high emphasis on education, Fremont school test scores rose to leading levels, and thus created even more of an attraction to Asian immigrants that carried over to sales of existing homes.  The trend has continued ever since to where Fremont today is about half Asian, and neighboring Union City is nearly the same.  Articles in the Fremont Argus after the 2000 U. S. Census figures and 2005 updates were released discuss this dramatic shift. 

California has the highest Asian population share in the country at 12.4% in 2005; Fremont’s was four times that at 49.8% in 2005.  The San Francisco Bay Area has about double the state average of Asian population percentage, and thus half of Fremont’s.  As Fremont and Union City, at 46.2% Asian, comprise the majority of my market, mine is probably the most heavily Asian market in the country.  See U. S. Census Bureau charts

Buick and Cadillac are upscale vehicles, with Cadillac competing in market segments dominated by luxury imports.  In my market of Fremont, Newark, and Union City, the pool of upper income buyers is almost entirely Asian.  On the chart below, the population of each ethnicity in each city, shown as “#”, is from the 2005 Census update for Fremont and Union City, and the 2000 Census for Newark, as 2005 data is not available.  The incomes shown are from the 2000 Census, with a separate page for each city and ethnicity (“population group”).  The average income for each group is a population-weighted average.

  |_______Asian________| |_______White_________| |______Hispanic_______|
     City # % 2000 Income # % 2000 Income # % 2000 Income
Fremont 104,800 72.8 $85,194 71,227 65.0 $73,411 29,222 49.2 $64,071
Union City 30,147 20.9 $82,557 16,082 14.7 $65,525 18,040 30.4 $60,384
Newark 9,047 6.3 $77,442 22,179 20.3 $68,828 12,145 20.4 $65,923
Total/Avg 143,994 100 $84,174 109,488 100 $71,321 59,407 100 $63,328


Based on the disproportionately higher income of Asians, it can be reasonably assumed from the above data that most luxury cars purchased in this market are by Asians.  The Asian population dominance and high income is made clear in a pair of maps of my market provided by GM, which show that the areas of highest Asian concentration are also the highest income. 

2010 update:  The U. S. Census Bureau has released partial data from the 2010 census.  In Fremont and Union City, Asians have now surpassed 50% of the population.  In the Fremont-Newark-Union City total market, Asians have increased from 112,504 (35.9% of the population) to 154,135 (47.3% of the population.)  At the same time, Whites have dropped from 114,862 (36.7% of the population) in 2000 to 78,501 (24.1% of the population) in 2010.   

Asians avoid GM vehicles

The significance of this Asian shift is that Asians nearly totally avoid GM vehicles, a fact reinforced by data provided by GM.  GM data shows that Asians buy GM vehicles at approximately one third the market penetration of the general population.  One GM report shows in 2003, GM’s San Francisco Bay Area market penetration with Asians was a miniscule 4.9%.  A Cadillac report shows that Asian market share in 2003 was only 39% of that of the general market.  Data in the GM Training website shows GM’s Western Region Asian market share at 7.1%, which is only 29.7% of the 23.9% of the general market share.  GM’s Asian performance versus the general market is less than Ford’s at 5.7%/16.4% or 34.8% of its general market share, and Daimler-Chrysler’s (DCX) at 7.9%/13.7% or 57.8% of its general market share.  Daimler-Chrysler’s strength is most likely due to Mercedes Benz’s strong market share among Asians.[1]  It should be noted that GM’s San Francisco Bay Area Asian market share at 4.9% is lower than the national 7.1%, and GM’s Bay Area general market share is also much lower than national.  Con­versely, Toyota’s (including Lexus) Western Region Asian market share is 226% of the general population, and Honda’s (including Acura) is 214%.

New data on vehicle market share by Asians was released in April 2011, and may be viewed here.  GM’s market share among Asians has eroded even further from the 2005 GM data shown above.  It is noteworthy that luxury brands Lexus, Mercedes, and BMW each outsell GM’s highest volume brand, Chevrolet, by around two to one.  Buick and Cadillac are not on the chart, but in the general market each sells around 10% of Chevrolet’s volume, which would indicate that each brand would have an Asian market share of about 0.2%, a tiny fraction of the market share of Lexus (5.2%,) Mercedes (4.6%,) and BMW (4.4%.)  In the U. S. general market, Buick and Cadillac each have a market share of about 1.3%, with the three imports at 2.0%, 1.9%, and 1.9% respectively.  It is obvious that in my Asian dominated market, Buick and Cadillac don’t have a chance to meet state average market share.  General Motors informed me that the reason I was terminated in 2009 was that my dealership’s market share in 2008 was below state average.  Other San Francisco Bay Area dealers also fare poorly with Buick and Cadillac market share versus state average, but they have Chevrolet or GMC truck lines that dominate their volume at much better market share.  So, GM destroyed everything I have ever worked for because the auto buyers in my market are known rejectors of its products. 

In California, and possibly other places in the United States, in the early 2000’s GM hired the “A-Partnership” agency to produce advertising in Chinese language media.  The brands featured in the advertising were only its upscale Buick and Cadillac brands, in apparent recognition of the high level of education and income of the Chinese demo­graphic.  GM also hired Spanish language advertising agencies to advertised lower priced Pontiac and GMC, and most likely Chevrolet.  GM ended the Chinese language effort after only about two years, as an obvious result of poor results.  It seems that GM recognized what we dealers already knew, that advertising simply cannot change the culture.  The Spanish language advertising continued for years, with apparent good success for low priced cars and trucks.

One would think that the high concentration of Chinese immigrants in my market would lead to some Buick sales due to Buick’s popularity in China.  The reality is that, to my knowledge, we have never sold a Buick to a person who has immigrated to Fremont from China since Buick entered the market there in the late 1990’s.  It would seem that this paradox could be explained by the fact that the Buicks sold in China are different than those in the U. S., and that the Buick name doesn’t have the prestige of royalty associ­ation in the U. S. that it has in China. 

Representatives of the local Mercedes and BMW dealerships have told me that 70-80% of their customers are Asian, and the owner of the Lexus dealership has told me that 80-85% of his customers are Asian.  Whites and Hispanics are more GM friendly, but they are in the lower income categories that generally buy low priced cars and trucks that I don’t sell.  So, with the vast majority of the local buyers in the ethnic category that buys GM vehicles at about a third the rate of the general market, that gives me a two-thirds handicap on sales effectiveness of GM’s two upscale brands.

Since GMC (and Chevrolet truck) sales have traditionally been mostly full-size pickups and SUV’s that compete primarily with other domestic models, Ford and Dodge, an Asian population has little effect on the dealer’s sales effective­­ness.  Asians rarely buy vehicles in those market segments, and even if they did, most of the choices are other domestic vehicles.  Conse­quently, although the large truck market is probably smaller here as a percentage of the total, a truck dealer’s effectiveness in this market has little or no Asian handicap.

As the typical Buick and Cadillac customer demographic is a mature, affluent, Caucasian or African-American, they are traditionally popular among the “country club set.”  With the traditional blue collar base and now dominant Asian affluent market, there is a large void in this typical Buick and Cadillac demographic.  As an illustration of this, there is no country club in the Cities of Fremont, Newark, and Union City that make up my market, comprising a population of around 325,000.  In fact, there is only one golf course in the entire three cities, a Fremont city-owned par 32, 2191 yard, 9-hole course.

The most recent year of the local Fremont-Newark-Union City market Polk registrations I have is the 2006 report, which shows the dramatic dominance of imports versus state average, which itself has a high import penetration.  The figures shown below are for my Buick market area (which is also my Cadillac market), which begins on page 9 of the Polk report.  My Cadillac market area shown in the first 8 pages of the report includes part of  Hayward to the north, but new vehicle registrations in the Buick/Cadillac area are 84.2% of the total Cadillac area.  An index of 1.00 means the market penetration is equal to state average, with higher or lower numbers indicating above or below state average.  For example, 1.15 means 115% of state average.  Following are some illustrations of how dominant Asian customers are in my market, and how dealers can do little or nothing to change it:

  • Ford has an index of 0.63, and Mazda 1.54, with the same dealer operator in the same facility.  Furthermore, the Ford dealership has huge frontage on Balentine Drive in Newark, and a large freeway sign at the back of its property, while the Mazda show­room is attached to the side of the Ford building on a dead end street with no sign or visibility from Balentine Drive or the freeway.
  • Chrysler’s index is 0.78 and Dodge’s 0.77, and Honda’s is 1.57.  At the time, Chrysler and Dodge occupied the same building in the Fremont Auto Mall, with Honda on the adjoining lot next door.  Both dealerships were owned by AutoNation.  (AutoNation terminated the Chrysler and Dodge franchises in August 2009 at the time GM/Inder Dosanjh purchased the facility for relocation of Chevrolet.)
  • Acura’s index is 1.56.  There is no Acura dealer in the Fremont-Newark-Union City  market.

It should be clear from the above that a domestic dealer is heavily handicapped by the Asian demographic dominance of the market.  Even without a dealer, Acura thrives, as Asians will drive a distance to buy the import they want.  If manufacturers didn’t under­stand the demographic influence in this market, the domestic manufacturers of the above named dealers would think that the local dealers are poor operators, while the import manufacturers would see the same people as heroes.

Further reinforcing the challenge of selling upper end domestic vehicles in the Fremont-Newark market is the April 2010 voluntary termination of the Lincoln-Mercury franchise by the Newark Ford dealer across the street from my facility.  He had acquired the Lincoln-Mercury franchise from Ford Motor Company in late 2007, adding to his existing Ford franchise.  Fremont Lincoln-Mercury-Jeep had closed in January 2007 after 44 years in business.  I asked the Newark Ford dealer why he terminated his Lincoln-Mercury franchise that seemingly cost him nearly nothing additional to operate other than the cost of carrying the inventory, to which he replied that Ford Motor Company wanted a separate showroom that would cost him about $300,000 to build.  He felt that the 5 new vehicles per month he was selling did not justify the additional expense, which I would estimate to be no more than $4,000 per month in depreciation, interest, taxes, and insurance.  The volume was totally insignificant compared to the 55 Mazdas he has been selling per month, of which he estimates 75% of the buyers to be Asian.  As Lincoln-Mercury is Ford Motor Company’s equivalent to Buick-Cadillac, the fact that he felt it wasn’t worth $4,000 per month is indicative of my challenge of operating an entire dealership on nearly the same volume.

Other inherent challenges for Signer Buick-Cadillac

While it is not uncommon for a dealer to feel that his or her situation is more difficult than those of other dealers, I think that nobody could argue that my situation was more challenging than most.  In addition to the Asian factor, I encountered the following factors:

  • The Newark location:  All of the luxury imports sold in this market are at the Fremont Auto Mall, so I had no chance of gaining any spillover traffic from them.  My voicing of this concern to GM when they insisted that I relocate to Newark in the early 1990’s fell on deaf ears.  In 2005, GM representatives indicated to me that they believed that GM sales at the Fremont Auto Mall would be 10%-25% higher than in Newark.  A chart shows the heavy dominance of the Fremont Auto Mall
  • Ramifications of a non-viable low volume business structure:  GM’s Buick-Pontiac-GMC channel plan was designed in large degree to provide adequate volume so that those dealers would have sufficient volume to compete with other brands.  This was also a reason GM and the Obama Administration used to justify the elimination of many of its dealers.  GM’s denying me of Pontiac-GMC perpetuated the very problem it had identified.  Among the detrimental effects of starvation volume are the following:
    • Reduced ability to attract and retain top sales and management talent:  The best people gravitate to the dealerships with the best income opportunity.  With the constantly declining dealership volume primarily because of Buick’s collapse, I had little to offer top talent.
    • Reduced staff as a result of survival expense control:  I cut back one member of our ten-year team of three managers in March 2004, which was followed by the resignation of the other two when they learned how much more they could be making at the Mercedes and Honda dealerships they went to.  I ended up taking over the sales management duties myself, and hired one sales manager.  There was a benefit in expense reduction, but offset to a degree by the occasional missing of a sale.
    • Reduced marketing funds:  A dealership can only put so much per vehicle sold toward advertising expenditures, leaving a small dealer with very little share of voice.
  • Harassment, resolution attempt, and lawsuit:  My attention to business was severely negatively impacted by the apparent harassment I experienced in 2005, 2006, and 2008, as well as my attempt to resolve the ugly situation in 2006, then followed by the lawsuit that began in 2007 and continued to 2009.


[1] Market data shown is 2005 data.  The Daimler Benz later dissolved its relationship with Chrysler.