Car Washes

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 17,600 car washes in the US provide washing, waxing, detailing, hand washing, and self-service washing of cars, trucks, vans, and trailers. Companies may also perform scheduled and preventative maintenance or body repair. Operations generally involve three types of car washes: conveyor car washes, in-bay automatic car washes, and self-service car washes. The industry includes regional chains, franchises, and independent operators.

Capital Investment

Automated car washes are capital-intensive and require a sizable investment in equipment.

Express Washes Explode

The number of express wash facilities has grown dramatically, driven by vehicle owners looking for faster, less expensive options and car wash owners looking for more economical alternatives.

Industry size & Structure

The average car wash operates out of a single location, employs fewer than 10 workers, and generates about $973,000 annually.

    • The car wash industry consists of about 14,800 firms that operate 17,600 establishments, employ 179,200 workers, and generate $14.4 billion annually.
    • The industry is extremely fragmented; the top 50 companies account for 20% of industry revenue.
    • Large companies include Mister Car Wash, Take 5 Car Wash, ZIPS Car Wash, and Autobell Car Wash.
    • The industry includes regional chains, franchises, and independent operators.
                            Industry Forecast
                            Car Washes Industry Growth
                            Source: Vertical IQ and Inforum

                            Recent Developments

                            Mar 21, 2024 - Employment Up, Wages Flat
                            • Employment by car washes was up slightly in Q4 2023, while wages were mostly flat, according to data from the Bureau of Labor Statistics. The total vehicle miles traveled in the US remained mostly unchanged in January 2024 compared to a year ago, according to the US Department of Transportation’s Federal Highway Administration. Additionally, consumer spending levels showed a slight upward trend in the first nine months of 2023, according to personal consumption expenditures data from the Bureau of Economic Analysis.
                            • Inflation was reported as the top business problem for small business owners, selected by 23% of owners in a survey by the National Federation of Independent Business (NFIB). The NFIB’s Small Business Optimism Index fell in February 2024 to 89.4, marking the 26th consecutive month below the 50-year average of 98. According to NFIB Chief Economist Bill Dunkelberg, “While inflation pressures have eased since peaking in 2021, small business owners are still managing the elevated costs of higher prices and interest rates. The labor market has also eased slightly as small business owners are having an easier time attracting and retaining employees.” Small business owners are still encountering high job opening levels, with a seasonally adjusted 37% of owners reporting job openings they could not fill in the current period. Nearly 55% of owners reported making capital outlays in the past six months, with 35% spending on new equipment, 23% acquiring vehicles, and 15% improving or expanding facilities.
                            • Car wash operators will have to monitor minimum wage changes, as 22 states increased their minimum wages in January 2024, according to USA Today. About half of the increases are automatic adjustments linked to inflation. States that raised their minimum wages in January 2024 include Hawaii ($14), Maryland ($15), Nebraska ($12), and Washington ($16.28). Several states are set to boost their minimum wage levels later this year, including Florida (up to $13 in September) and Nevada (up to $12 in July). According to the Economic Policy Institute, nearly 40 US cities and counties will increase their minimum wage rates above state levels at the start of the new year. The federal minimum wage is $7.25 an hour, and more than 20 states, primarily located in the South and the Midwest, use the federal minimum as their wage floor.
                            • Consumer confidence levels fell in February 2024 after increasing for three consecutive months, according to data from The Conference Board. The Conference Board’s consumer confidence index fell to 106.7 in February 2024 from 110.9 in January 2024. According to Dana Peterson, Chief Economist at The Conference Board, “The decline in consumer confidence in February interrupted a three-month rise, reflecting persistent uncertainty about the US economy. The drop in confidence was broad-based, affecting all income groups except households earning less than $15,000 and those earning more than $125,000.” Peterson added that the decline in consumer confidence was largest in householders over 55 and those under 35. Plans to purchase homes, autos, and large appliances decreased slightly on a six-month basis.
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