Kunes Auto Group
The power of relationships
Business View interviews Scott Kunes, COO of Kunes Auto Group, for our focus on top U.S. Automotive Dealerships
Purchasing a car from a dealership – either a new or pre-owned vehicle – is a major decision. The numbers involved and the importance of the purchase can lead to the shopping experience being made in cold, transactional terms, with the importance of the customer relationship being lost. That certainly isn’t the case with Kunes Auto Group, which has remained true to its community-focused roots for decades.
“My dad was in the business from 19 years old in my grandfather’s shop,” Scott Kunes, COO of Kunes Auto Group, says. “That was back in the 1950s. My grandfather grew that operation, eventually owning seven stores. He still owns one of them today that he works in from time to time – even though he’s in his 80s now.”
About 25 years ago, Scott’s father decided to start a business of his own, moving to Delavan, Wisconsin and buying his first Ford Lincoln store. Today, the Kunes Auto Group collectively owns 40 automobile and RV dealerships throughout the Midwest. “I’ve been part of the business for 16 years now,” Kunes recounts. “At first, I wasn’t sure that my father and I could work together, as we’re both quite strong-minded! I actually started as a chef, before my father convinced me to sell some boats in a marina that he owned. Before I knew it I was hooked on working in the automotive space.”
Scott learned a lot from his time in the restaurant industry about customer service, which he subsequently applied to Kunes Auto Group when he began working as an assistant lot manager. “I think we are in more of a customer service industry than a retail one,” Kunes explains. “So, I gained a lot of useful knowledge during my career as a chef around things like inventory control, purchasing, and people management. That’s why I love hiring people from the restaurant industry to this day.”
With 40 locations, Kunes Auto Group has around 2,000 employees in total, made up of both full-time and part-time workers. The size of the workforce demands efficient management, with employees spread across approximately 500 miles north to south and about 200 miles east to west. “We cover a pretty large geographic territory,” Kunes acknowledges. “In the past three years, we’ve experienced some rapid expansion, which has been accompanied by some growing pains. We’ve been working out how to manage this growth as we go.”
The last two years, in particular, have presented new challenges that nobody could have predicted, of course. Whereas dealerships like Kunes Auto Group would have become accustomed to seeing lots full of vehicles and prospective customers, the COVID-19 pandemic changed all that. Then supply chain issues came along to cause further disruption.
“Obviously, everyone is feeling the tightening of inventory,” Kunes says. “Fortunately, we were very proactive, purchasing a lot of new vehicles and used cars to ensure we always had pretty full lots. It’s a new era of selling and most manufacturers have experienced this change. But this has actually led to higher profits in some cases, with manufacturers finding that if they don’t build so many products, they don’t have to rebate them to get them sold.”
The automotive industry is certainly experiencing an interesting period, but it is one that many consumers are already coming to grips with. Kunes Auto Group has taken a lot more new car orders lately, especially on specialty items. The company wants to provide the best customer service possible, while also making the best business decision. As such, it’s always a balancing act.
As a family-owned business, Kunes Auto Group takes community involvement extremely seriously but covering such a wide territory can make this challenging. Kunes notes, “We are a Christian organization and from the very beginning of his business, my father has always followed a tithing model, where the first 10% of all profits go to charitable organizations. In addition, we have our own foundation – the Kunes Family Foundation.”
An example of the kind of community engagement prioritized by Kunes Auto Group is its “Trade In Hunger” event, launched earlier this year. Across four states, the company packaged over 570 meal kits at each of its dealership to benefit local pantries and six regional food banks that are nearby its network of locations. Collectively, the company has donated $400,000 worth of food. “We’re not just present in local communities, however. We’re global too.” Kunes adds. “My father has helped build four orphanages in India. The company has outreach programs in Romania, Ukraine, and South America too. We always try to focus on helping people in need – wherever they are.”
This focus on helping people extends to Kunes Auto Group’s customers, who are always granted a first-rate service. “Our service departments are growing fast, “Kunes reports. “We are currently in the process of adding another 15 bays to our headquarters in Delavan. The difficulty comes in finding technicians to work there. It becomes a bidding war to secure these individuals, which is not necessarily what we want. We want our technicians to receive a fair wage, of course, but we also have to think about the consumer.”
The company has started sourcing its technicians in different ways to help manage the competition for talented individuals. “We hired a technician trainer to work with the various tech schools in our different communities and also our apprentice technicians in store. Our technician trainer has been so effective that we’re looking to add another.”
Kunes Auto Group is also helped in its talent acquisition process by investing in its people and workplaces to create the best possible environments for employees. The company focuses on what’s best for its staff, and how it can offer training, so they get the personal and professional development they want. “We’ve been fortunate to work with some fantastic people,” Kunes says. “Of course, we have experienced some turnover – that is unavoidable in this industry. But, overall, we are well below the industry average in terms of employee turnover.”
Kunes Auto Group starts its employee-focused approach from the very beginning, creating charter trade schools for young people to explore different trades before they leave high school. These schools are being explored in partnership with electrical, plumbing, and HVAC contractors to give young people a range of career choices. Other partnerships that Kunes Auto Group has benefitted from include several business collaborations that have delivered long-standing advantages. “We have incredible partners that have helped us grow,” Kunes says. “We have Auto/Mate, our Dealer Management System (DMS), Manheim, and a host of other really amazing organizations that we’ve worked with.”
The company’s extensive partner network helps to ensure that it remains abreast of market developments, including the rise in popularity of electric vehicles. Kunes Auto Group is one of the largest Mach-E dealers in the U.S. because the company not only made a concerted effort to acquire that specific product but also ensured it had some of the best-trained sales staff around to promote it. “We positioned ourselves at the small to mid-markets where we can give smaller dealers the support they need,” Kunes says. “We are trying to stay at the forefront of the electric vehicle market. The rural areas where we reside may not be at the forefront in terms of sales, but we are always ready to answer any questions that our customers may have on electric vehicles.”
With new technological developments and market shifts constantly emerging, Kunes Auto Group’s goals are always evolving. Even with the shifts that have occurred across geographies and industries, however, it’s important to maintain a longstanding ethos.
“In truth, this industry hasn’t really changed much since the selling of covered wagons,” Kunes says. “It is still a relationship industry. If we can train our people to understand that then we’ll continue to offer our customers the best possible service. I don’t think our industry is ever going to become purely transactions. Relationships will continue to be important.”
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AT A GLANCE
Kunes Auto Group
What: A progressive family-owned and operated automotive dealership
Where: Over 40 locations; headquarters in Delavan, Wisconsin