The Hybrid Shop Promises Higher Profits and Car Counts for Tire Dealers

March 29, 2019

There are more than five million hybrid vehicles on the road in the U.S., and most tire dealers aren’t equipped to offer the battery and specialized services these vehicles need. The result: dealers are missing out on revenue, profits and improved car counts.

But Martin Kruszelnicki and Dave Crawford believe they have the solution to help dealers add those services to their existing tire businesses — a franchise opportunity with The Hybrid Shop LLC.

The all-star cast

Kruszelnicki has partnered with well-known pacesetters in the hybrid and electric vehicle universe.

Tom Gage is the CEO of EVGrid, and is credited with building the Tzero, an electric sports car that predates the Tesla. He introduced Elon Musk to engineer Martin Eberhard. (Fun fact: Gage is the brother-in-law of tire dealer Walt Dealtrey, chief operating officer of Service Tire Truck Centers Inc.)

Mark Saxonberg spent decades working for Toyota Motor Sales USA Inc., focusing on alternative fuel vehicles and the environment.

Kruszelnicki took over The Hybrid Shop in 2017 as CEO with a goal of improving the model and the technology. He remanufactured batteries for more than a decade before he became the company’s owner, and has surrounded himself with an all-star cast of experts. In late 2018 he hired Crawford as president and chief operating officer, along with Carey Mellor as vice president of sales, and together they’re leading the charge to recruit dealers and expand the network.

Crawford says those joining The Hybrid Shop now are on “the ground floor.” Its remanufactured batteries include a three-year/100,000 mile warranty.

All of its batteries will come with a computer chip, and the data collected from those chips will help The Hybrid Shop understand driving patterns to predict services before they’re needed in the future.  The Hybrid Shop is working with data company Preteckt to collect, study and create those battery projections.

“It will help us collect data. Within 12 to 18 months we think we’ll be able to do predictive modeling.”

The bolt-on business helps dealers service the entire hybrid drive system (hybrid battery packs, power inverters, DC to DC converters, hybrid controllers and electric components). Those repair tickets are on average higher than traditional combustible engine vehicles, and thus a generator of bigger profits, The Hybrid Shop says.

And, since the typical hybrid and electric vehicle owner is more interested in energy-efficient technologies, it paves the way to selling other green services and products, including low rolling resistance tires. “I believe educating your customers will increase your profits,” Crawford says.

Under Kruszelnicki’s ownership, the out-of-pocket expense to join The Hybrid Shop network is just a fraction of what it was under previous leadership — about $16,500 compared to $60,000.

Here’s what The Hybrid Shop program offers new franchisees:

  • Training: There’s training for the owner, plus basic and advanced in-person training for technicians. The technicians learn hybrid and electric vehicle maintenance and repair at The Hybrid Shop’s headquarters in Torrance, Calif.
  • Tech support: The help includes a tablet that can diagnose any hybrid vehicle, plus there’s online tech support and access to a tech support portal. Users can post questions or photos and get a response instantly. There are also webinars and a library of resources available.
  • Software: A dedicated software platform to help manage inventory and order parts.
  • Marketing: There’s a dedicated dealer website, and exposure for dealers as The Hybrid Shop launches national marketing campaigns and exclusive campaigns. The Hybrid Shop website helps consumers search for and find local franchisees.
  • Products: Remanufactured nickel metal hydride (NiMH) batteries, upgraded lithium-based battery packs, plug-in conversions and other hybrid and electric vehicle components.

Rich Hoffman, owner and president of Hoffman Tire Pros in Fayetteville, Ga., is among the original Hybrid Shop partners. Hoffman, who has owned his retail tire operation since 1976, says he’s not afraid of taking risks or trying new things when it comes to improving his business. That’s what attracted him to The Hybrid Shop concept a few years ago.

Plus, he believes there’s a future with hybrid vehicles, and he thinks marketing Hoffman Tire Pros as an expert in hybrid repair will help him grab and hold more of that market. (He promotes those services on the business’ homepage and on Facebook, and offers a coupon for a free hybrid battery stress test (a $99.95 value).

Hoffman does think The Hybrid Shop needs to market itself as it tries to grow. “We need to re-energize The Hybrid Shop brand, because we’ve lost some of that in the last couple of years.”

The rise of hybrids

  • The first alternative fuel and hybrid electric vehicles (AFV and HEV) models were introduced in 1991; the market leader Toyota entered the fray in 1998. Two decades later, for model year 2018, 31 manufacturers and brands offered 203 different models.
  • In the last 28 years, the “Big 3” auto manufacturers have introduced almost two-thirds of the alternative fuel vehicles to the marketplace, according to the U.S. Department of Energy’s Alternative Fuels Data Center.
  • By 2025, 18% of light vehicles produced will be a hybrid of alternative energy. (Source: Specialty Equipment Market Association Future Trends report, Fall 2018.)