Twelve months ago, our State of the Industry Survey, although showing some improvement over the previous year, offered results that could best be described as a mixed bag. The results from the current survey (page 34 in this issue) leaves no doubt that things are looking up. Of particular note: a majority of respondents overall, and in every sub category, were able to report sales growth in 2013. Equipment manufacturers, particularly, put in a stellar performance: 91 percent reporting increased sales.
These survey results take us further than a review of the industry’s fortunes over the past year. More importantly, they offer up a glimpse of how car wash suppliers view the business climate ahead. Again, manufacturers, no doubt encouraged by their sales numbers, led the way in staffing up for future demand. Compared to last year, more than double the percentage of respondents in this category added to their staff – i.e., 71 percent currently versus 33 percent in the previous survey. Conversely, half the percentage (14 versus 28 last year) reduced their employee numbers. Also fewer distributors shrank their staff – 10 percent reducing employee rosters compared to 18 percent last year.
Nowhere is the change in climate more evident than in the expansion of production and warehousing capacity. In last year’s survey, not a single equipment manufacturer and only 18 percent of chemical manufacturers increased production capacity at their facilities. In the current survey, 55 percent of the former and 50 percent of the latter report having done so. Warehousing offers a similar picture. In the previous survey, zero respondents increased their warehousing capacity while 9 percent of equipment manufacturers and 13 percent of chemical manufacturers report such increases in the current survey. Those increases are sizable: averages of 40 percent and 25 percent respectively.
These encouraging results are to some extent reflected in the views of our Executive Forecast participants (page 38 in this issue). At the risk of being accused of stealing their thunder, I quote briefly from their observations. Ryan Essenburg of Tommy Car Wash believes car washing is entering an economic cycle “where massive growth will take place as our industry transitions from mom and pop operations to rapid regional expansion and global development.” For Tom Hobby of AUTEC, the investor or professional car washer market “is truly the bright spot in the future.” Jon Jansky of D&S feels that “operators, distributors, and OEMs who have survived [the 2009 downturn] have opportunities to benefit even in a fragile, no-growth economy.” Kevin Collette of Istobal USA cautions that the “guarded consumer will spend, but only if he feels he is getting more bang for his buck in terms of time and value.”
All change is not necessarily for the better. Here’s a news item that might dampen all this optimism just a smidge. A newly published study by Unity Marketing finds that the sales of individual preprinted greeting cards have dropped sharply. Admittedly, this affects only one segment of the car wash business. However, for several years, in survey after survey, greeting cards have consistently been the top non-automotive service/product offered by car washes with lobbies/customer waiting areas. The study attributes the decline to Internet-based custom-card services.
This greeting may not come to you via a car-wash-purchased preprinted card, but it is heartfelt: Have a joyful Holiday season and a prosperous 2014.