The Hybrid Shop will add stand-alone franchises
The Hybrid Shop LLC (THS) is growing quickly to keep pace with the hybrid electric vehicle market. Twenty-five dealers joined its service network in the last year. Plans for 2015 include stand-alone franchises, a national warranty plan and a credit card program.
THS shared its plans with more than 40 tire dealers and automotive repair shop owners who gathered in Las Vegas, Nev., on Nov. 3, 2014, to learn about the profit potential of hybrid electric vehicle service.
They met at a Ted Wiens Tire & Auto Service Center outlet for the invitation-only training event hosted by THS. The training included a hands-on demonstration of THS’s reconditioning technology, which returns hybrid batteries to 95% of their original capacity.
There are over 8 million hybrid vehicles on the road today, and independent shops don’t know how to service them, according to Matt Curry, THS founder and chief visionary officer. “Our research shows that 96% of hybrid owners go back to dealers for service. We want to change that.”
Curry says THS provides training in hybrid service and repair to independent shops that vehicle manufacturers do not. “If you want to be in business in future, you want to get in hybrid market and electric vehicle repairs,” says Curry.
Hybrids make up about 4% of all the vehicles on the road. The hybrid market is expected to grow 10% in 2015 with substantial growth projected for the next five to 10 years. Curry says automakers must turn to alternate technologies such as HEVs to meet government-mandated fuel economy standards.
The Hybrid Shop began franchising hybrid servicing technology, training and marketing support to dealers in the spring of 2013. Curry partnered with Automotive Research and Design LLC (AR&D) to establish THS. The technology and training in high-voltage battery pack charging and conditioning were developed by Mark Quartro, Ph.D., AR&D’s chief technology officer.
A new hybrid battery can cost anywhere from $3,500 to $10,000, according to Curry. Battery reconditioning is a third to half of that cost, depending on the car. “You can save customers thousands of dollars for battery conditioning versus battery replacement,” says Curry. “It’s also much better for the environment because no resources are needed to build a new battery and nothing enters the waste stream.”
There are currently 28 dealers in the THS network servicing hybrid-electric vehicles (HEVs), with 10 more set to launch in the next three months.
“Our existing dealers are generating between $20,000 and $40,000 additional revenue a month at 65% to 70% gross profit within three to six months after opening. They pay off the initial investment in six to 12 months,” says Curry.
Ted Wiens Tire & Auto Service Center, which hosted the training event, began serving the hybrid market in April from one store and plans to add the service at two more stores.
“We want to be a one-stop shop to our customers,” says Jennifer Wiens, brand manager for the company, which operates 11 retail outlets and three commercial locations in the Las Vegas area. “It’s all about creating customer loyalty. We don’t want to say no to our customers.”
Up to now, dealers like Ted Wiens could purchase a fractional franchise package which they “bolt on” to their existing business to increase revenues, profits and car counts, according to Curry. He describes the fractional franchise as an “easy, inexpensive way to get involved.”
Dealers will have another option soon. “In 2015 we’re rolling out our first stand-alone franchise. We have some dealers who are interested in coming together and opening five or ten full franchises. The franchises will be branded The Hybrid Shop. Dealers who open either a fractional or full franchise get a protected territory,” says Curry.
THS also plans to introduce a nationwide warranty plan and a credit card program for its network dealers in the first quarter of 2015. “We want to bring value to our dealer network,” says Curry. “Everything we do has to drive car counts.”
Mark Cushing says he has been following THS since it was first mentioned in the trade press. He owns Good Neighbor Tire and Auto Inc. in Renton, Wash. and Beaverton, Ore., and Sandy Blvd Tire LLC in Portland, Ore.
"I’m here to look at program in totality and am particularly interested in how it will be marketed because the general public and hybrid owners don’t know that batteries can be reconditioned. They assume the batteries have to be replaced.”
Cushing says his reaction to the THS presentation is “very positive.” He says regardless of gasoline prices, the federal government fuel standards will “force hybrids into the market. One way or other, hybrids are going to be sold.”
Dave Carney owns Hillside Auto Repair, a 1,500-square-foot shop in Torrance, Calif. He began offering hybrid repair services in August 2014.
“I’ve never been so energized and excited about my business,” says Carney, who has been in the automotive repair business for 30 years. “My clientele is older and affluent. All of us are doing this for the future.
“These hybrid cars are multiplying as fast as bunny rabbits. Those of us who are early adapters of this technology are going to enjoy years of sustained profitability because we are at top-of-mind market position for the hybrid owner. I’ve created an exit plan that allows me to grow out of my business using my employees as my partners.”
For more information on the THS dealer network and the equipment, technical training and marketing support it provides for dealers servicing hybrid vehicles, visit www.thehybridshop.com.