Keating, Whitaker take the wheel to drive innovations in Texas automobile dealerships

Ben Keating ’94 and Don Whitaker ’96 believe in disrupting the marketplace and then strategically investing in their business. Their success in growing the Keating Auto Group — a family-owned company that includes a number of popular Texas dealerships selling domestic and foreign cars — underscores the wisdom of their approach.

Keating’s and Whitaker’s approach to entrepreneurship resonated with a group of Mays Business School Business Honor majors who listened to their recent presentation. “I learned how having a broad perspective, possessing strong analytical skills and thinking long-term were some of the key elements that enable them to thrive in such a competitive field,” said Bao Nguyen ’20. “As the lecture progressed, it dawned on me that there was more to their business than simply selling cars, trucks and other vehicles for profit.”

Building on a family legacy

Keating, who is the company’s founder, owner and president, comes from a long line of automotive dealers. His grandfather owned a dealership in Crosby while his father ran the Tomball Ford dealership.

By the time Keating entered Texas A&M, he wasn’t interested in going into the car business and decided to major in industrial engineering. However, an internship with the automotive finance and insurance company Service Group made him reconsider his career plans. “As a college student, I had a different view of what the world should be like,” he said, noting that during his internship he regularly met with auto dealers. “I thought those dealers were missing a lot of opportunities.”

After graduation, Keating went to work for an Austin dealership before joining his father’s dealership. That move proved to be pivotal to Keating’s success. At the time, Houston was considered the most competitive market in the nation; approximately 25 Ford dealers alone were located in the Houston area. Many Houston residents initially considered Tomball to be too far away when shopping for a new vehicle. “I learned how to compete,” Keating said. “I figured out how to develop a niche so I could convince people to drive all the way out to Tomball to buy a Ford.”

Disrupting the marketplace

Keating had a falling out with his father after September 11, 2001. After leaving the Tomball dealership, he evaluated his prospects with the help of Whitaker, who Keating had known since elementary school.  Whitaker, who earned a degree in finance, was a consultant specializing in financial modeling at the time. He had been instrumental in helping Houston win a National Football League franchise that became the Texans.

After the pair analyzed the options, Keating purchased Port Lavaca Ford, a select dealership that only sold 35 total cars a month. Walking into that dealership in 2002, Keating believed the South Texas market operated like Houston’s so he applied the lessons he learned from working in Tomball. “It proved to be a total and complete disruption to the market,” he said. “Other South Texas dealers were not ready for what we did.”

Within 90 days, Port Lavaca Ford had sold out of almost every vehicle on their lot. The dealership soon became the top volume select Ford dealer in the nation. Because of this success, Keating was able to take over the Chrysler and Chevrolet dealerships in Port Lavaca.

Finding different ways to innovate

Keating’s business model involves creating strong partnerships as he grows his company. He owns 80 percent of every business in the Keating Auto Group portfolio but has established a strong system of checks and balances. Ten percent of ownership in the business is awarded to the store operator while the remaining 10 percent goes to a business partner who makes sure that the business’s financial side is running smoothly.

Keating Auto Group continues to upend the marketplace. The company currently own 14 automobile dealerships across Texas (including Tomball Ford as well as College Station Ford Lincoln, BMW of Brazos Valley and Brazos Valley Hyundai, Mazda, and Volkswagen) and is in the process of closing on three more. In addition, the company now has in-house finance, insurance, advertising, real estate and management divisions. Having everything in-house means that the Keating Company can strike a deal with a customer and then condense the financing so that the sale can be completed in a few hours.

Keating’s and Whitaker’s presentation highlighted the importance of finding ways to build on individual and business strengths. “Each man brings something unique to the partnership and their skills complement each other effectively,” said John Clayton ’20. “I learned that owning multiple businesses in different fields that all work together can be useful to save costs and increase profits.”

Keating Auto Group now has more than $1 billion in revenue and sells more than 25,000 cars per year. As Keating and Whitaker continue to build the company’s portfolio, they keep their eyes focused squarely on giving customers what they want. In response to a business honor student’s question about how to achieve success in the business world, Keating advised, “If you make the customer happy, then you’ll be happy.”