SIC 7542

Companies in this industry

Industry report:

This category covers establishments primarily engaged in washing, waxing, and polishing motor vehicles (including automobiles, trucks, and buses), or in furnishing facilities for the self-service washing of such vehicles.

Industry Snapshot

An estimated 97 percent of Americans take their automobiles to commercial carwashes, with over 100 million vehicles washed every year. According to the International Carwash Association (ICWA), professional carwashing was a $23 billion industry in 2011. There were approximately 14,616 carwashes in the United States in 2010 employing 132,277 people. Wash facilities types include conveyors, which pull the car through a tunnel as the equipment washed it; in-bay or automatic washes, in which the driver parks the car in a bay and the washing equipment moves over and around it; and self-service, which provides a bay with (often coin-operated) equipment, such as brushes and wands for the consumer to use to manually wash the car. The weak economy at the end of the first decade of the 2000s negatively affected the car-washing industry, with many consumers cutting back on discretionary spending by either delaying washing their cars or doing it themselves. However, by the beginning of the 2010s, a recovery appeared imminent.

Organization and Structure

The car-wash segment as classified by the U.S. Census Bureau covers commercial establishments primarily offering carwashing; car cleaning, polishing, and detailing; and bus or truck washing. These services are provided both to private individuals and to automotive dealers, automobile rental establishments, automobile fleet owners, and other businesses. Although carwash establishments may offer a combination of facilities and options, carwashes generally can be classified as coin-operated, self-service facilities, automatic facilities, full-service conveyorized facilities, or automobile detailers.

Coin-Operated Self-Service Facilities.
In self-service coin operated facilities, which generally do not require full-time supervision, customers clean their cars in drive-through bays equipped with "wand" type high-pressure spray nozzles and other car-cleaning accessories. Coin-activated controls determine the length of spray nozzle operation and allow the customer to switch among presoak; engine cleaning; tire cleaning; and foam, rinse, and wax sprays. In addition, these facilities generally provide coin-operated vacuums for cleaning the interior of a car and may have car care products, such as towels and polishes, available through coin-operated dispensers. Traditionally, self-service centers targeted consumers who rented their homes and did not have the capability to wash their cars at their residence. However, at the end of the first decade of the 2000s and early 2010s, this low-end sector of the industry also drew increasing numbers of homeowners who sought the convenience of self-serve facilities.

Automatic Facilities.
Like self-service washes, automatic facilities do not require full-time supervision, and they can service approximately 20 vehicles an hour. Customers activate the automatic system by driving their cars onto platforms within open-ended bays. Rollover carwashes are based on guide wheels that follow a vehicle's contours with horizontal overhead brushes and vertical "wrap-around" brushes that clean the car in presoak, undercarriage, foam, rinse, and wax spray cycles, followed by a hot-air dryer. Customer concerns about vehicle and paint finish damage have led to the development of "brushless" soft-cloth systems, and, subsequently, to the marketing of "frictionless" spray-only systems controlled by electric eyes and robotics technology. Like self-service facilities, automatic carwashes generally provide coin-operated vacuums for the cleaning of car interiors. By the end of the first decade of the 2000s, most automatic facilities were equipped to dispense a varied level of washing and treatment at varied prices. Most were also capable of accepting credit and debit cards as payment.

Full-Service Conveyor Facilities.
Full-service facilities not only require more space than self-service or automatic systems, but they are also more labor-intensive. In these facilities, full-time workers service 60 or more cars per hour as an automatic conveyor carries the vehicle through an open-ended service tunnel. Full-service conveyorized facilities used cloth-only systems, friction/frictionless wash combinations, or frictionless washes only. On-line services typically provided by conveyorized facilities include exterior wash, rust-inhibiting undercarriage wash, tire and whitewall cleaning, various waxing options, and the scenting of interior air. Off-line services typically include cleaning and polishing of exterior and interior vinyl and leather, shampooing of carpet and upholstery, cleaning floor mats, cleaning ashtrays, cleaning the engine, and applying a polymer protectant. In the early 2010s, the typical cost of a customized car cleaning package at a full-service conveyorized system was approximately $25.

Automobile Detailers.
In these facilities, the focus is on manual cleaning of cars both inside and out, using hoses and brushes, as well as hand-held tools, rather than high-technology carwashing equipment. The "detailing" of an automobile is an exhausting process. In addition to essentially manual versions of the on-line and off-line services provided by full-service conveyorized systems, detailing operations focus on such car parts as hood interiors and spare tires and on such "details" as polishing the interior of gas caps and dusting the spaces between radio buttons. Although prices vary according to geographical area, services offered, and type of vehicle (e.g. passenger car, SUV, minivan, truck), in the early 2010s, fees for a basic detailing package could run anywhere from $75 to more than $200.

Professional Organizations.
The leading professional trade organization was the 5,000-member International Carwash Association (ICWA), which publishes a semiannual directory and a monthly management report as well as the trade publication Carwash Magazine. One of the most important industry trade publications was Professional Carwashing & Detailing.

Background and Development

An article in a 1923 edition of Literary Digest discussed the "first automobile washbowl that has been built in this country," a carwash in St. Paul, Minnesota. For this three-minute carwash, "the owner drives his car in and around the bowl until he is satisfied that the mud has been cleaned from the chassis and wheels--at the exit door there is a spray with forced water which cleans the body--an electric drier completes the job." Three years later the same magazine described a seven-minute "Automobile Laundry," a carwash relying on two pitmen; hoses of hot, cold, and soapy water for car exteriors; and a compressed air hose for car interiors. The article predicted that the carwash would become "one of the largest specialized industries in the country."

The modern carwash industry began in 1946 in Detroit with the opening of Paul's Auto-Matic Car Wash, the "first automatic autowash in the world." The establishment was a conveyor-style carwash through which the car was pulled by a moving chain. Twelve years later, the first full-service Jax Kar Wash opened in Detroit. This pioneering operation serviced 280,000 cars in its first year of business. Coin-operated self-service facilities and automatic rollover carwashes emerged in subsequent decades.

In the early 1990s, the carwash industry was in a dynamic phase. Important trends in the carwash industry included a customer preference for soft cloth or frictionless carwashes over automatic brush rollovers and the emergence of detailing operations and growth in the high-quality carwash segment. The adoption of sophisticated computer software for business planning, customer service, and bookkeeping needs, and an industry focus on environmental issues were other important trends.

The carwash industry grew rapidly from 1977 to 1987, but its growth began to slow in the decade following 1987. In 1977 there were 5,785 carwash establishments nationwide in this industry classification. It was a business oriented to small-scale proprietors that were owned by 5,290 firms, of which 5,091 operated a single carwash. Approximately 45 percent were incorporated, another 42 percent were owned by individual proprietors, and 3 percent were owned by partnerships. The total receipts for carwash establishments nationwide came to $668.6 million in 1997. Forty-two of 5,290 carwash firms and 243 of 5,785 carwash establishments reported annual receipts of $1 million or more.

At the beginning of the 1990s, Forbes described carwashes as one of the nation's largest small businesses, with an annual growth rate of 5 to 10 percent. However, conditions began to change by the latter part of the decade, and while the industry continued to grow at a rate of 6 percent, new forces had begun to encroach, particularly environmental laws and competition from service stations offering free carwashes with a fill-up.

Just 10 years later, there were 9,132 commercial carwash establishments nationwide, an increase of almost 60 percent. The proportion of incorporated establishments had risen to just over 50 percent, which remained low for the service industries as a whole that reported 60 percent of all establishments as being incorporated. The number of sole proprietors had dropped to 37 percent compared to 32 percent for all service industries, and partnerships had jumped to almost 13 percent, nearly double the overall service industry figure of 7.3 percent. The total national revenues for the carwash sector had reached $1.8 billion, with California and Texas combining to account for more than one-quarter of nationwide revenue. Nationally, the average revenues per establishment were just over $197,000 a year, for only 34% of the average for the overall service industry. However, because carwashes tended to be less labor-intensive than many other service industries, average revenues per employee for carwash establishments ($23,534) were slightly more than 50 percent of the service industry average.

In 1992 the number of carwash establishments in the nation had risen to 11,589, an increase of 27 percent. This indicated a slight leveling off in the rate of increase compared to the 1977 to 1987 period. The proportion of incorporated establishments had increased to 56 percent, while the service industry average remained at 60 percent, individual proprietorships dropped another two points to 35 percent (slightly more than the service industry average), and partnerships accounted for only 9 percent. California remained the leading state in the nation with 1,408 establishments, followed by Texas and New York. National revenues had increased 47 percent to $2.64 billion, or $228,158 per establishment. However, this was only about 35 percent of the service industry average. Revenues per employee had increased 21 percent to $28,407, representing 46 percent of the industry average.

The carwash industry is heavily affected by such issues as weather, climate, and time of day. A May 1996 survey conducted by Auto Laundry News reported that Saturday was overwhelmingly the best day for business, with an 82 percent vote. February, with 19 percent, was chosen the best month of the year, and November (0.5 percent) the worst. Not only did carwash owners have a favorite season (winter, with more than half the votes, as opposed to fall, with only 3 percent), but they also had a favorite time of day. Just over 40 percent of respondents said the majority of their business was conducted between 1:00 and 3:00 p.m.

States and communities have passed sewage, water conservation, and water reclamation codes that affect or are directed at commercial carwash establishments, and individual businesses increasingly turned to a combination of fresh and reclaimed water in the operation of their car cleaning systems. In addition, the federal Environmental Protection Agency began to regulate the underground tank storage systems and to analyze the chemicals, detergents, and wax products used by the carwash industry.

Establishments in this industry sector have also faced increasing competition from service stations, convenience stores, and other facilities that offer washes as one of several on-site profit centers. Some of these utilize innovative technology, such as a television that customers can view while pumping gas. On the screen they see an advertisement for a carwash, which they can purchase when they pay for their fuel. Others give away free washes with a gas fill-up.

According to Dun & Bradstreet, there were an estimated 26,120 carwashes throughout the United States in 2005, employing 126,038 people. The average number of employees per establishment was five. The industry reported estimated revenues of $4.12 billion. States with the majority of carwash facilities were California, Florida, Illinois, Georgia, Michigan, New York, Ohio, Pennsylvania, and Texas. Together, they were responsible for more than 50 percent of the market, with California holding an 11 percent share.

Commercial carwashes represented 15,953 establishments, or 61 percent of the industry total. The carwash sector boasted revenues of $2.3 billion with 72,638 employees. The automotive washing and polishing sector followed with 7,647 carwash facilities, or 29.3 percent of the market, and $851.6 million in revenue. Next were facilities that catered to trucks only, numbering 7,647 establishments. Combined, the washing of trucks generated $337 million and employed 6,719 people. Finally, the industry had 769 self-service carwashes, with estimated sales of $91.9 million and 2,759 employees.

In the late twentieth century, big-box retailers, as well as service stations, increased their market presence, which prompted independent carwashes to increase their services. For example, some facilities offered discounted pricing, monthly pay plans, a wireless Internet connection while waiting, and even a bay specifically for bathing pets in an effort to maintain a competitive edge over service stations and convenience stores.

While competition remained a concern for big-box retailers, carwashes had to contend with higher energy costs as well. Carwashes were being hit twice: once for their boilers, which showed up on their utility bills, and another because consumers were not washing their vehicles as often. At the end of the first decade of the 2000s the ICWA found that 52 percent of drivers washed their vehicle less than once a month, with 15 percent admitting that they never wash their cars, so "gas prices are taking that discretionary income away from the consumer," according to the Detroit News.

The economic recession at the end of the first decade of the 2000s resulted in a downturn in the car care industry as consumers cut back on discretionary spending. Convenience Store News reported in March 2009, "Many convenience store owners [said] that their carwash business has been one of the biggest casualties of the current recession--noting many consumers can easily put off a carwash when money is tight (or wash their cars themselves)." Brad Simonis reported in Modern Care Car at the beginning of 2009, "The perfect storm of plummeting new car sales, slowing retail sales, the housing crisis, a nose-diving stock market and a never-ending media blitz on the state of the economy has resulted in dramatic dips in carwash volumes unlike most of us have ever seen." To lure customers, owners whose carwashes were linked to a convenience store offered such incentives as a frequent buyer program or discounts on gasoline while other operators increased prices.

Overall, however, fewer consumers were washing their cars at home and more were seeking professional car care facilities. In 2008, 66 percent of consumers surveyed for the ICWA's Study of Consumer Carwashing Attitudes and Habits, reported using professional carwashes, up from 62 percent in 2005. Nonetheless, the industry was making little progress upgrading its image. According to the survey, despite technological advances in washing equipment, nearly 84 percent of respondents believed that washing their car at home was safer for their car than professional services, although slightly more than half considered carwashes more convenient than home washing. The industry had shown slight improvements in convincing consumers that professional care car provides a better quality wash (29 percent in 1999 compared to 35 percent in 2008) and better overall value (17 percent in 1999compared to 22 percent in 2008) than home carwashing.

Current Conditions

In the early 2010s, carwashes continued to attempt to improve their image and their business practices by offering more ecologically friendly services. For example, in 2009 the ICWA launched WaterSavers, a program that called for such measures as adequate backflow prevention, annual inspections of equipment, and the use of water-saving devices and equipment. Specifically, conveyorized carwashes could use no more than 40 gallons of fresh water per car, and self-service carwashes had to use pump systems and nozzles that used fewer than 3 gallons of water per minute. According to the ICWA, "The WaterSavers program provides carwash professionals with an opportunity to demonstrate their leadership in this area [environmental protection] while attracting customers and lowering costs." Carwashes that met the criteria could, for a small fee, display the WaterSavers symbol and use their status as a participant in the program for marketing and advertising purposes.

In 2011 the carwash industry was poised to bounce back from the economic recession at the end of the prior decade. According to IBISWorld, "As the US economy recovers and awareness of water efficiency takes off, demand for this industry's services will increase again." The report predicted growth in the industry through at least 2016.

Industry Leaders

In the early 2010s, the industry remained highly fragmented and dominated by individual enterprises or regional franchises and operations. Professional Carwashing & Detailing reported that the top conveyorized carwash franchises in 2011 by numbers of locations were Wash Depot (Malden, Massachusetts, 76 locations); Mister Car Wash (Tucson, Arizona, 65 locations); Autobell Car Wash (Charlotte, North Carolina, 58 locations); and Mike's Express Car Wash (Indianapolis, Indiana, 37 locations). Nevertheless, the top 50 companies in the industry were reported to account for only 15 percent of industry revenues in 2011.

© COPYRIGHT 2018 The Gale Group, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. For permission to reuse this article, contact the Copyright Clearance Center.

News and information about Carwashes

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