Industry Dynamics - Modeling Projections Through 2020
By Robert Roman
Over the years, I’ve collected and analyzed information from car wash owners, the International Carwash Association, IBIS World, Census Bureau, trade journals like Auto Laundry News, as well as other sources to gain an understanding of the industry’s structure and dynamics.
Using this information, I constructed a model of the car wash industry. This model is divided into three categories: conveyors, in-bay automatics, and wand-bays and includes data and projections for 2010 through 2020.
The primary activity of the industry is cleaning, shining, and protecting the exterior and interior of vehicles. As shown in Figure 1, the industry cleans an estimated 8 million cars a day.
As shown in Figure 2, the estimated size of the fleet is smaller today but growing modestly.
As shown in Figure 3, the average price for a wash is estimated to almost double by 2020 as compared to levels in 2000.
Most sources expect industry wash revenues to grow at between 2.5 percent and 3 percent, thereby meeting or exceeding levels thought to exist before the recession of the early 2000s.
As shown in Figure 5, our model suggests industry profits are normalizing.
As shown in Figure 6, our model suggests future market value of over $100 billion by 2020.
Figure 7 shows market values per location per category.
As shown in Figure 8, our model suggests industry productivity has been improving over the last years.
Here, productivity is a function of throughput (revenue minus cost of goods) and production cost (e.g., labor, overhead). Productivity measures how well the industry uses resources in producing car wash services.
As shown in Figure 9, our model suggests that the total number of employees involved in car wash production is increasing.
As shown in Figure 10, our model suggests wash revenue per employee is rising.