The In-Bay Automatic — Where it’s Been, Where it’s Going
How did it start? The development of the automatic/rollover car wash coincided with the rapid expansion of the automobile’s presence in the United States and Europe after World War II. It is estimated that the USA went from approximately 50 million automobiles in 1950 to more than 250 million today. The prolific increase created a steady rise in demand for automatic car washes. The in-bay automatic wash concept was designed to operate unattended and offer its customers a quick and inexpensive exterior wash. In many cases, the automatic bay was a complement to an existing business such as a self-serve wash or a gasoline station.
Early washes, manufactured in the 1960s, were typically very basic touch-free gantries or friction washes with simple brush control systems, utilizing polyethylene brush materials that were reliable, provided reasonable cleaning, and operated efficiently. After the oil crisis of the early 1970s, oil companies began buying automatics in quantity, in many cases providing the automatic wash as a “free service” for their customers who bought their fuel and automotive services. The concept was successful, and in many instances operators were able to develop premiums such as spot-free rinse and conditioners to provide a means of upgrading customers to create revenue from the wash. One consistent negative was car damage: vehicles were changing, adding accessories, and in an effort to become more fuel-efficient were constructed of lighter-duty materials. This, coupled with primitive brush technology, resulted in damage.
The major oil companies began to look at the car wash as a paradox: a relatively inexpensive opportunity to gain market share and build customer loyalty, but a potential cause of loosing customers resulting from vehicle damage. This led to further development of the touch-free automatic: same operating criteria, runs unattended, operates safely, and dramatically reduces the chances of customer damages. Major oil began purchasing touch-free automatics on a high-volume basis, gaining market share and even creating market share for automatics. Professional operators jumped on the automatic bandwagon as well. Improvements in technology, POS systems, and touch-free cleaning-quality improvements allow them to own and operate without necessarily being hands on. I believe the in-bay automatics reached their all time high in 2006 with approx 42,000 units in operation in the United States alone.
Where are we today? Consumers with less disposable income, gas/c-store operators raising prices to increase profits from their washes, higher costs of operation, other profit center opportunities, and increased competition have forced closure of many automatic wash bays. The development of the $3 express exterior conveyor model has taken market share from all segments of the car wash market — in-bay automatics are no exception.
“Today we estimate that 20 percent of the automatics have been closed, become a drive-thru coffee or sub shop, and, in a few cases, extended into conveyors,” said Bobby Willis, vice president of sales for Ecojet Wash Systems.
This leaves one more important piece of information to be learned: What percentage of the existing bays is touch-free and what percentage is friction? According to Mike Perry of Total Marketing Concepts, “Both friction and touch-free automatics have gained acceptance, but touch-free seemed to gain the advantage in the 1990s. Recently, however, there seems to be a trend towards friction. My best guesstimate is a 60/40 split with touch-free having the larger share.”
Industry insiders leave us then with the following estimated market condition today: approximately 35,000 in-bay automatics in operation, with 20,000 being touch-free and 15,000 being friction.
WHERE IS IT GOING?
Competition, cost of land, declining industry sales, uncertain labor, and tight credit markets make development of multi-million dollar full-service car washes difficult to complete. Competition and cost of land and construction have dramatically reduced the number of self-serve bays being constructed. So where is the opportunity for growth in the industry? A review of recent successes within the in-bay automatic segment points to a few key criteria: Automatics that are part of a total business concept and cross marketed within the business, i.e., as part of a high-volume gas/c-store operation with the car wash being run professionally as a separate profit center; automatics that are part of a total automotive service center or linked to a quick-lube type business; high-volume automatics that can create higher revenues by processing more cars per hour while displaying value added services for the customer to see and feel; car washes that provide wash technology for both touch-free and friction customers; and operators that use POS and marketing technology to help customers use their wash and become members of their loyalty programs.
Let’s explore these key design and operational criteria and get some insight from industry experts:
Professionally Run Automatics that are Part of a Business Concept
Doug Long, president of USA AutoWash in Tampa FL says: “We look for strategic partners who have businesses that bring heavy traffic to their sites. We combine great equipment with great locations and traffic-building marketing partners to build successful washes. We use a high-volume ‘Express-on-Rails’ concept, and have actually processed 27 cars per hour with an average ticket of $10-plus with no labor. We use modular buildings, have in-house engineering and contracting, and we can go from dirt to dollars in six weeks. This keeps our costs down and creates an opportunity to profit from month one on.”
USA AutoWash has 12 car washes affiliated with its program and all are profitable and growing despite today’s difficult market conditions. Long is planning to build more locations.
Professionally Run Car Washes that Are Part of Another Automotive Service Business
Time It Lube, based in Shreveport, LA, is a shining example of combining its quick lubes with professionally run car washes. Todd Burns, Time It Lube’s president, explains, “We have six stores where we have added automatic car washes to our product offerings for our customers. We use glass buildings, combination high-speed car washes with modern entry systems that give us Internet communication and marketing information. Our customers are offered touch-free, friction, and multiple combinations of both. We offer upgraded conditioners and tire shine. All of our washes are profitable. We have strong repeat business, and the most exciting thing to us is that our oil change business has gone up 25 percent-plus at all sites where we have added a car wash. We plan to add two more this coming year. Car wash is a critical part of our go-forward plan; today we view ourselves as professional car wash operators.”
High-Volume Automatics that Can Create Higher
Revenues by Processing More Cars per Hour and Display Value-Added Services for the Customer
Dave Wikel of USA Express points out: “We use an ‘Express-on-Rails’ concept, with a CTA, a combination high-pressure touch-free and friction rollover with wheel scrubbers, display-lighted off-board spot-free and high-end-conditioner arches to clearly show our customers the value-added services and products we provide. Our process is incredibly fast and consistently provides great results. Our customers love the quality, convenience, and speed. We call it a conveyor without the chain. We use a high-tech bilingual touch-screen teller that we connect to via the Internet, which gives us upsell capability, real-time operating and marketing information, and the capability to remotely adjust the car wash itself.”
Another interesting view of the in-bay automatic business comes from Rob Deal, vice president of international and corporate accounts for Innovative Control Systems, a manufacturer of entry and POS systems: “We see the in-bay automatic market as one of the more stable segments in the car wash industry. While other segments are lagging in ability to get financial footing, the IBA segment is still moving along. It may not be at the unit-volume level of previous years, but the market remains active and should be for years to come. IBA operators are becoming more sophisticated and are demanding better products to help them manage their sites. The tools they are asking for are parallel with those of the conveyor operator: better information, management tools, and marketing capability to help them engage and retain their customers, all centered around improved customer experience.”
Let’s review: There are some common themes among the industry insiders. They all emphasize that they run their car washes professionally as separate and key profit centers to their entire business. All are using technology to enhance the payment process, gain information, and then cross-market with their other sites. All are using high-volume wash concepts with wash equipment that offers their customers the choice of touch-free or friction washes. All are using glass-modular or highly visible bay designs and are offering and then clearly demonstrating upgrades to their customers. Clearly they are using wash technology that allows for higher wash throughput, striving to create higher wash tickets, and using building materials that make the wash highly visible while lowering constriction times as well as costs. These facts demonstrate that the in-bay automatic has come a long way from the afterthought “free-car-wash” with a fill up. It has turned into an exciting, profitable
business concept for many businesses.
Kevin Collette has been active in the car wash industry for 12 years and is the president of West Palm Beach, FL-based Istobal USA. You can visit the company on the web at www.istobalusa.com.