Car Wash: A Growing Industry

What does “car wash and detailing mean?”

Operators in the industry are primarily engaged in washing, waxing and detailing automotive vehicles, including passenger cars, trucks, vans and trailers.

Key Statistics

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Industry Outlook

The Car Wash and Detailing Services industry has gone through a period of spotless growth over the past five years and is expected to continue to grow steadily over the next five years. Strong new car sales have also supported the industry’s growth, as consumers with new cars are more likely to pay for expensive washing and detailing. Industry revenue is forecast to grow by a compound annual rate of 2.5% over the five years through 2014-15, to reach $526.8 million.

Demand for car washes and detailing is contingent on discretionary income. When consumers have more discretionary income, they can devote more funds towards getting their vehicle washed professionally rather than washing it themselves. Discretionary income is expected to rise in 2014-15.

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When consumers are working more hours, they have less available leisure time. Consequently, they are more likely to pay for their car to be washed than to do it themselves. A slight rise in average weekly hours worked and a consequent fall in the availability of leisure time are expected to bode well for the industry in 2014-15.

Consumers are more likely to get their new vehicles professionally washed and detailed, as they aim to keep their new high-value purchases in perfect condition. When the average age of the vehicle fleet declines, the composition of vehicles on the road trends towards newer cars, meaning more consumers can be expected to use the industry’s services. The average age of the vehicle fleet is projected to fall in 2014-15, presenting an opportunity for the industry to increase revenue.

Overall, industry revenue is forecast to grow by a compound annual rate of 2.1% over the next five years, to reach $584.1 million in 2019-20.

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New Car Sales

Over the past five years, new car sales have grown strongly, rebounding from the global financial crisis as the high Australian dollar has made new cars more affordable and consumers have transitioned to fuel-efficient small cars. The high rate of new car sales has also increased the total number of vehicles on the road. Consequently, strong new car sales have added to industry revenue.

Outsourcing Tasks

Households are increasingly outsourcing chores and activities. The level of outsourcing has been growing over the past decade, primarily driven by increased female participation in the workforce and busier lifestyles. Combined with rising incomes and a higher number of dual-income households, this has resulted in households outsourcing more unpaid work tasks.

While this trend principally applies to entertainment, food, personal services and tourism, car washing and detailing has also been affected. Consumers have been willing to pay more to have their vehicles washed outside of the home, placing a greater premium on maximising their leisure time. In conjunction with improved economic conditions following the global financial crisis and increased automation of car washing, profit margins have expanded slightly.

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A powerful combination

Think about how many car wash businesses are in your suburb. Then think about how many premium quality upmarket car wash cafés are around. Probably not many, right ? Now think about the car wash cafes that are neat, clean, professional and provide a premium quality service.

Now put the two concepts together, and you have a powerful brand in hand car wash and detailing café franchising – which is why Geowash is committed to developing premium quality cafes from here on.

Our franchise system has grown amazingly in 2014 and 2015. We have grown from only 5 stores to a planned 25 stores in 4 states.

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