NEWS

Kuni Automotive, Vancouver revved up for growth

Monday, Dec 15, 2014

Walk through the floor-to-ceiling glass front door, and you might think you've been transported to the high-tech halls of Silicon Valley.

Here, at one of Vancouver's largest companies, a ping-pong table beckons employees to stay active when they take a break. The scent of spices wafts from the office's commercial-grade kitchen. Even on a cloudy day, enough sun shines through the wall of windows to make the polished concrete floors gleam.

But then there are the cars: High-end vehicles parked next to meeting nooks and alongside corporate logos, showing visitors to Kuni Automotive headquarters what this $1.2 billion business is really all about.

"Welcome," says Kuni CEO Greg Goodwin. "To The Garage."

After two years in his company's gleaming corporate headquarters, home to about 50 employees from the luxury auto dealership chain's management and finance teams, Goodwin says he still feels revitalized each time he shows up at the office.

He and Chief Financial Officer Laura Carlisle conceived of the space they call "The Garage" after Kuni acquired a chain of Colorado Land Rover dealerships in 2011. That acquisition more than tripled the size of Kuni's headquarters staff, and there just wasn't enough room in the company's old headquarters.

They found a 15,000-square-foot former call center inside Columbia Tech Center, then hired C2K Architecture Inc. to remove the carpet and drop ceilings and design a space inspired by Google and Facebook headquarters — and by the automotive garages that are central to their industry.

At the time, Goodwin, who joined Kuni in 1990 and became CEO in 1999, thought he was cementing his legacy.

"I thought I'd retire at age 65 or 66," Goodwin says.

The new headquarters changed his mind.

"I love this place," he says. "It doesn't feel like just any office. I love the energy, I love the people. I feel like I'm back in love with the car business. I'll be 64 in January, and I'm not making any plans to leave."

Then, growing more sober, Goodwin notes that former Kuni Chief Operating Officer Joseph Herman worked nearly to the end of his life. Herman died in October of pancreatic cancer at age 72.

"I have personal goals for this company, a view of where we can end up as a result of my time in this position," he says. "But I don't think I'll follow Joe Herman down his path. I don't think I'll be working full time in my 70s."

Gunning for growth

Goodwin deflects questions about just how big he wants Kuni Automotive to become, but recent history suggests that growth is a big part of his vision for the future.

After a rough period for the auto industry in general, Kuni finished 2010 with annual sales of under $500 million — less than it told The Columbian it made in 2004. But the company had saved enough to weather the downturn, Goodwin says, and it invested those profits in growth when the economy started picking up.

In the past five years, Kuni has purchased a Chevrolet dealership in California, Audi and Land Rover dealerships in California and Colorado, and a Porsche dealership in California. The company also opened its first Washington Infiniti sales floor, in Lynwood.

Profit margins are razor thin at auto dealers in the 21st century, and growth allows Kuni to stay competitive in a changing marketplace, Goodwin says. Kuni is pursuing a strategy that's unfolding nationwide, according to a recent report in Automotive News, a trade publication that covers the industry.

Kuni's growth has landed it a spot on a list of the hundred largest dealership chains in the U.S. compiled by WardsAuto, an industry data tracker that ranked Kuni Automotive as No. 45 in the nation last year. Among Pacific Northwest dealers, only Medford, Oregon-based Lithia Motors (No. 10 in the U.S.) ranked higher.

And this year, Goodwin predicts that Kuni's sales will grow to $1.2 billion, up from $1 billion in 2013.

The industry is taking note. This November, the National Auto Dealer Association announced that Goodwin was one of 55 dealership executives nominated for the 2015 Time Dealer of the Year Award, out of more than 17,000 candidates nationwide. The winner will be named Jan. 23.

Looking ahead

While Goodwin says he expects the growth initiative that his company launched three years ago to continue for the near future, he also believes that the next chief executive of Kuni Automotive will face major shifts in the automotive industry.

Some of the changes that are coming reflect new government rules. By 2025, new cars will have to average 54.5 mpg in fuel economy. That's prompting automakers to invest heavily in electric and hybrid cars, and also spurring a range of other innovations aimed at making cars lighter and more efficient, according to Car and Driver magazine.

But Goodwin also anticipates a cultural change in how people think about driving in this country: Young adults are less enamored with cars than their parents.

Kuni's high-end brands, which include Lexus, Audi, Porsche and BMW, sell to an older demographic. But as today's 20-somethings age, they may well buy fewer luxury cars than their baby boomer parents, he says.

"With immigration, with population growth, people will still buy cars," Goodwin says. He believes that today's 20-somethings may buy more vehicles as they marry and start having children, and that high-tech innovations will prompt people to trade in old vehicles for new.

Even so, he says, the auto industry will be a different place in 10 or 20 years. Kuni Automotive will be under different leadership, though Goodwin declines to name his top candidate to follow in his footsteps.

"There are a lot of men and women in this company who have the potential to run Kuni, three of them with 'chief' in the title," Goodwin says, alluding to his top-level staff. "In the next several years, we'll have to make that choice."

 

Source : http://www.columbian.com/