The car wash industry is incredibly dynamic. This is an industry that’s been growing and changing considerably in recent decades, and consequently, it’s filled with exciting opportunities for entry and innovation.
You’ll probably be shocked to learn, for instance, just how much revenue car washes generate each year, both within the United States and globally. Likewise, you’re likely to be surprised by how many owners of car wash businesses have only recently entered the industry. As the number of cars on the road continues to increase precipitously, we can expect even more demand for car washes and auto detailing. Read on to learn more about some of the most mind-boggling statistics backing up these noteworthy trends, and perhaps to gain insight into your own ideal point of entry into the car wash industry.
1. The car wash industry has been experiencing considerable growth, both short- and long-term.
The growth that’s being seen in the car wash industry is notable. In 2012, for instance, 2.1% more cars were washed than in 2011. (That may not seem like much, but consider that in five years a continuation of that trend would amount to a more than 10% increase.) (Source: Brandon Gaille) Likewise, on a longer time-scale of almost two decades, there have also been major increases in the industry: more than 19.2% more consumers used a car wash in 2014 than did consumers in 1996. (Source: Big Man Washes)
2. This growth is predicted to continue—industry revenue growth for the car wash and auto detailing industry is forecasted at an average yearly rate of 3.3% up to 2018.
There are multiple factors behind this trend. First, consumer discretionary spending—in other words, purchase of non-essential, but typically desirable goods and services—is expected to climb. Second, sales of both new and used cars reflect the likelihood of growth in the related car wash industry—more cars on the road means, of course, more need for car washes. Third, professional car washes will be sought out by those with increasing environmental awareness, because car washes use considerably less water than home washing—potentially reducing water use by more than two-thirds. (Sources: Big Man Washes & San Diego Car Care)
3. In the United States alone, there are 16,000 car wash establishments, whose yearly revenues add up to a shocking $9 billion.
For the sake of clarity, the term “establishments” refers to both single-location businesses and individual locations of businesses with multiple locations. Additionally, these are businesses that do the following: cleaning, washing, and waxing for all kinds of vehicles, not just standard cars. When you start looking at this at a global scale, the numbers are even more striking, as there are a total of over 150,000 car wash locations worldwide. (Source: Dun & Bradstreet)
4. There’s plenty of room for new businesses to get in on the action in this growing industry.
Luckily, this isn’t an industry that’s dominated by a few big chains. On the contrary, the vast majority of car washes are owned by small business owners—90%, to be exact. This suggests that it’s an industry that doesn’t require a massive initial investment to enter. And keep reading to find out just how incredibly lucrative it can be. (Source: Brandon Gaille)
5. Plentiful opportunities for entry into the car wash industry are also bolstered by the fact that it has very low capital intensity relative to other industries.
Capital intensity describes the degree to which businesses require high-cost investments in fixed assets to produce goods and services. As of 2012, business owners in the car wash industry spend an average of $0.11 for each dollar they spend on labor. This is because manual labor makes up a major part of the service of car washes, and the average car wash establishment has about 9 or 10 employees. Being a business in a less capital-intensive industry means you’re less likely to experience high levels of depreciation (decreases in the value of your assets as time passes). (Sources: Detail Xperts & Investopedia)
6. Roughly 38 gallons of water are used each time a single car is washed.
That’s a major environmental impact, especially when you consider that daily, an estimated total of about 8 million cars are washed at car washes. That adds up, in fact, to about 304 million gallons of water used for car washes per day, globally. This suggests that there’s room in the industry for green, eco-friendly car washes that would provide the same services while reducing costs to the environment—that niche is definitely something new businesses should consider. (Source: Brandon Gaille)
7. As a result of these factors, there are lots of new car wash owners in the industry, many of whom are experiencing considerable success.
As of 2012, the International Carwash Association states that 37% of car wash owners have owned their businesses for five years or fewer. And they’re potentially making big profits: a survey by Auto Laundry News shows annual profits of anywhere from $55,000 to $100,000 for self-service car washes; meanwhile, full-service businesses can rake in yearly profits of $500,000 to $900,000. (Source: Detail XPerts)
8. The annual revenue of the car wash industry adds up to $48 billion.
Keep in mind that that number also includes gas purchases, as about 65% of car wash locations are savvy enough to also sell gasoline. You might not guess that this is such a lucrative industry when you learn that the cost of a typical car wash averages a measly $15. But these earnings add up to the mind-blowing number of almost half a trillion dollars. (Source: Brandon Gaille)
9. Car washes for heavy users make up 66% of total car washes.
Here, “heavy users” refers to those who use a car wash at least several times per month. They are 28% of total car wash users. (Consumers say their main reason for going to the car wash more often is that it offers positive emotional rewards, making them feel happy.) Meanwhile, 47% are medium users—who go every couple of months—and their washes make up 29% of all car washes. Finally, the 1/4 who are light users (going every 6 months, or less frequently) end up paying for a measly 5% of all car washes. (Source: Big Man Washes)
10. The majority of car washes use in-bay automatics.
There are numerous types of car washes, but the most commonly used are in-bay automatics, which make up just over half (51%) of all car washes. In-bay automatic car washes often involve driving through a conveyor system in which brushes clean your car and high-powered blowers dry it. The next most common are self-serve car washes (wherein the driver uses a high-pressure hose to clean the car themselves), which are 32% of all car washes, and then exterior conveyor washes (where drivers remain in the car as the car moves along an automatic conveyor), at 9%. Finally, full-service car washes are the least common (primarily because they involve hiring attendants who wash the vehicles), constituting only 8% of all car washes. (Source: Focused Car Wash)
11. 72% of consumers who have their cars professionally washed will only do so every couple of months, or even less.
Looking at the frequency of car wash usage, 47% of consumers get their car washed every couple of months, while 20% do so twice a year and 5% only once a year. On the other end of the spectrum, 24% of car wash users will do so more than once per month, and 4% actually visit car washes once a week or more! In surveys, the main reasons consumers give for not getting their cars washed more often is that it’s too expensive or that it’s too time-consuming. (Source: Big Man Washes)
12. Interestingly, and perhaps unexpectedly, winter is the most popular season for car washes.
This may be a surprise because you’d think people wouldn’t want to get their car wet when it’s cold or even freezing out. However, 32% of car washes happen during the winter. Spring and summer are tied for second place in terms of popularity, with each garnering about 25% of all car washes. Finally, fall is considerably less popular, with only 18% of car washes happening during that season. On average, car wash establishments can expect high traffic in the winter and nearly half as much traffic in the fall. (Source: Brandon Gaille)
As these 12 statistics profoundly demonstrate, the car wash industry is much more significant and value-generating than most people realize. You may actually be able to take advantage of this widespread lack of awareness by gaining access to its underappreciated, yet potentially huge profits.