Josh Mellor wasn’t looking to open his own shop. Actually, he wasn’t even looking at staying in the repair industry at all.
Mellor was doing fleet work for the city of Melbourne, Fla., and contemplating a career change when the city purchased its first hybrid vehicle—a Saturn in 2009. Mellor was sent to a class at the Automotive Career Development Center (ACDC), one of the country’s leading hybrid training organizations, to learn how to fix it.
“They wanted to have someone be able to at least change the oil and not worry about them getting electrocuted or hurt,” Mellor says with a laugh.
While he gained the knowledge he needed to get under the hood of that Saturn, what Mellor really found at that course was a new career path.
“I was looking at numbers of hybrids sold in the past several years, and seeing the numbers of vehicles coming out of their [dealership] warranties, it looked like there was an opportunity to capitalize on that,” he says. “There weren’t any shops in my area doing it, and the dealers put such a premium price on anything that comes into their shop with a ‘hybrid’ stamped on it.”
Mellor jumped right in. He opened his own shop in 2010, Mellor’s Automotive Inc. in West Melbourne. While his shop provides general repair service to all makes and models, he markets himself as a “hybrid specialist.”
He opened the shop on a “shoestring budget,” he says, but has already seen year-over-year increases in revenue and sales each month with nearly 15 percent of that coming from hybrid work.
“The numbers are there, and [working on them] gives your shop a competitive advantage,” says Craig Van Batenburg, founder and president of ACDC. “Consumers right now don’t have a choice for service; they can only go to the dealership because nobody else wants to work on them or they don’t know how. This is a real opportunity
The truth is, Van Batenburg says, the time has come for shops to stop viewing hybrids as a trend and to start looking at them as a viable business opportunity. And, he adds, getting a shop ready to work on hybrids is not only more affordable and simpler than most shop owners initially think, it’s going to benefit your bottom line.
Hybrids are not going to be your top moneymaker in your shop, but no different than a new marketing campaign or an investment in your shop’s curb appeal, they will lead to new customer generation, says shop owner Matt Overbeck.
Overbeck runs Cincinnati Hybrid, an offshoot of his family’s Overbeck Auto, a staple in the Cincinnati area for more than 35 years. They opened the hybrid division within their own shop, using it to take advantage of the lack of hybrid shop options in the area.
Similar to Mellor, hybrids make up about 10–15 percent of his shop’s overall car count. But he’s quick to point out that that’s 10–15 percent more cars than if they didn’t offer those services.
“And we don’t have large hybrid numbers in our area like you might in California or some other states,” he says. “But we’re counting on that growing, and we’re staying ahead of our competition. We’re light years ahead of any other shop in terms of technology and what we can fix.”
There are a number of benefits to adding hybrid services to your shop:
1. Planning for the future. Numbers vary greatly state to state, but overall, hybrid sales are up nationwide, making up about 3 percent of all U.S. car sales in 2012, according to hybridcar.com and Baum & Associates. And, when you consider that the first hybrids hit the market in 2000 and most dealers offer something around a 3-year, 36,000-mile warranty, Van Batenburg estimates there are more than 1 million hybrids out of dealer warranty in the country. “That’s a lot of cars that need work, and where are they going to go?” Van Batenburg says.
2. Customer demographics. According to separate studies done by J.D. Power and Associates and The Topline Strategy Group, hybrid owners, on average, have a higher annual income than conventional car owners, earning more than $100,000 per year. Also, they tend to be older and more tech savvy. Simply put, these are quality customers with money to spend, says Van Batenburg.
3. Hybrid owners own other vehicles. Rarely is a hybrid a household’s only vehicle, Van Batenrburg says. Servicing a customer’s hybrid can lead to work on their other vehicles—and vehicles of their friends, family, etc. It could potentially create a whole new pipeline of customers, Mellor says.
4. It’s new business. If you’re not working on hybrid cars, well, then you’re not making money off them. Mellor says the 15 percent additional work he gains from hybrids is work he wouldn’t be getting otherwise. He has customers driving more than two hours across Florida to his shop because there aren’t hybrid repairers in their areas.
What You Need
Opening a shop during difficult economic times wasn’t an ideal situation for Mellor, but he found he had little problem making sure his shop was equipped for hybrid work on his limited budget.
In fact, Van Batenburg says, the investment in hybrid service is minimal when comparing it to the potential of new business. It can vary, but overall, he says a shop can be fully equipped, trained and ready at a one-time cost of less than $10,000. (Mellor says he got his shop hybrid-ready for closer to $4,000.) That’s a low number, he says, considering the additional business brought in.
Really, there are just three areas a shop needs to invest in: training, tools and marketing.
Training. This is where the biggest investment needs to be made, Van Batenburg says. “There’s a lot of it out there,” he says, “and you have to have it.” There are many different aspects of hybrid vehicles that make them unique, and Van Batenburg says that understanding them is the first step.
As a very hands-on manager at his shop, Overbeck opted to do the training himself and then teach his techs. Mellor took the full-on ACDC training, then had his techs attend a shorter, abbreviated version.
“You want everyone in your shop to understand the vehicles, from your techs to your front desk people,” Overbeck says. “Get your hands on one and let everyone drive it, let them take a look at it and have the techs do some work on it. There’s nothing worse than a customer coming in and your people up front don’t even know how to work the keyless starter.”
ACDC provides training at its facility in Massachusetts. Van Batenburg will also travel to shops for training, or hold classes and seminars at various facilities around the country.
Tools. The nice thing is, Overbeck says, a fully operational shop already has most of the equipment it needs for hybrid work. Information subscriptions, scan tools, common wrenches—all of it translates over.
The only items essential to hybrid work a shop might not already have are high-voltage gloves (up to 1,000 volts), a CAT III rated high-voltage insulation meter, and a quality battery charger. That’s it. Overbeck says he spent about $1,000 on equipment, admitting he splurged on the “really nice versions” of those items. He also says he uses the tools for other work.
Things like insulated wrenches and other hybrid-associated tools are unnecessary, Overbeck and Mellor both say.
Marketing. It makes no sense to work on hybrids and not let anyone know. Van Batenburg suggests shifting a good portion of your current marketing toward this aspect of your business.
“People are going to remember that you’re the guys that work on hybrids, whether they have one or not,” Overbeck says. “It helps with bringing in other customers if they know you can fix it all. You have to be able to fix it all.
“The trend is that more and more people will have these. It’s just a matter of a few years before that stuff is going to come to you anyway and you start seeing it. It’s going to be out there and how long can you tell someone that, oh, we can’t work on that? It kills me. I can’t stand to tell anyone that.”