Tunnel Wash

Express - Benchmarks Remain Positive

By Robert Roman |

12/01/19

According to the Auto Laundry News 2019 conveyor survey, most of the benchmarks remain positive for express-exterior conveyor operators.

Annual average wash volume was 118,000 and average gross revenue per car was $9.96. This is up from about 90,000 and $8.00 a car several years ago.

CAPTURE RATE

Based on reported average daily traffic count of 35,800, annual sales volume would represent an effective capture rate of 1.06 percent.

In 2014, 65 percent of operators reported having a water-repellent arch and 20 percent a bubbler arch. In 2019, 84 percent reported a water-repellent arch, 40 percent a bubbler arch, and 48 percent a lava application.

Operating costs as a percentage of total cost was reported as 56 percent — a value that has been fairly consistent over the years.

The average conveyor length and number of vacuum stalls reported has increased by about 10 percent.

The percentage of operators using auto pay stations has increased from 57 percent to 76 percent. There are also more operators reporting belt conveyors.

Operators reporting an Internet website have inched up slightly from 55 to 63 percent.

COMPETITION

One trend not positive is competition. Between 2014 and 2019, the percentage of operators reporting three or more competitors rose from 40 to 60 percent.

Average wages have also increased. In 2014, 23 percent of operators reported paying more than $10 an hour. In 2019, 33 percent reported paying over $12 an hour.

In terms of new expresses built within the past year, the reported total cost has risen from $3.2 million in 2014 to $5.0 million in 2019.

Two things that haven’t changed much are market range (70 percent of customers come from within 5-miles) and best months of the year (February and March).

Another thing that hasn’t changed much is the percentage of operators reporting self-serve wand bays on site (about a third).

The biggest mover in the survey was advertising. Here, a whopping 98 percent of operators reported using social media — up from 63 percent in 2014.

Unfortunately, ALN does not collect information on subscription programs, digital network memberships, or mobile payments.

The magazine also doesn’t collect data on percentage of operators with an elaborate light show.

MATURATION

Nevertheless, we could argue that the survey results suggest that the express exterior business model has reached maturation.

At maturity, the aim is to maintain market share. This means investing wisely in marketing and considering any product modifications or process improvements, which might provide a competitive advantage.

For example, with exception of the new ceramic online products and buff-and-shine units, I can’t imagine what else manufacturers could come up with to stick inside a tunnel. After all, as Simoniz puts it, “the hand waxing of a vehicle has been reduced to a push button.”

So what might be next for express exterior?

For example, automated polishing tunnels have been around for a while and there doesn’t seem to be much market penetration to this point.

I also haven’t seen or heard much about operators adding express detail to keep the competition from nipping at their heels.

Arguably, there could be some shrinkage as more markets become saturated and/or the economy recedes.

And as for consumers switching to a different type of product or operators switching to a less expensive production method, this doesn’t seem likely.

 

Bob Roman is president of RJR Enterprises – Consulting Services (www.carwashplan.com). You can reach Bob via e-mail at bob@carwashplan.com.



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