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News from the industry

October 11, 2010
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Hurricane-affected cars hit auto-care sites

As the vast vehicular wreckage wrought by Hurricane Katrina is carted away, car-care facilities should anticipate the arrival of salvaged vehicles from used-car lots across the U.S.

Two months ago, at least seven 2005 Nissans listed in the National Insurance Crime Bureau database as hurricane-damaged were sold at an auction in Los Angeles.

Gina Budhai, managing partner of Car Pool Detail, a sub-section of the Virginia-based Car Pool chain of carwashes said that she's already encountered vehicles damaged by Hurricane Katrina at her facilities.

“I actually have one right now,” Budhai said. “There are two types of cleanups. The one type that we wouldn't approach is a cleanup that went all the way up the engine. It can be done, but it would need to be done in conjunction with a good mechanic who will pull the engine down and rebuild it.”

Insurance investigators and Louisiana law-enforcement officials are building a database of flooded cars to try to prevent as many other vehicles as possible from being spruced up and foisted upon unsuspecting used-car buyers.

Large wholesale retailer enters carwash market

Costco Wholesale Corporation (Nasdaq: COST), a retailer that operates 471 warehouses worldwide, including 346 in the U.S., has decided to break into the carwash business.

Starting with its store in the Sodo district of Seattle, Costco will enter the carwash industry in March or April, using conveyor-driven machines that offer customers a $7.99 wash, including a tire shine, undercarriage washing and a full body wash.

Costco’s entry into the industry could squeeze the bottom line for those already in the business, but according to Victor Odermat, president of the Seattle-based Car Wash Enterprises Inc., which owns the Brown Bear Car Wash chain, his business’ biggest competitor is still the driveway washer.

Odermat said he welcomes Costco’s competition, which he said improves his own business by getting more people to pay to wash their cars, but the nuts and bolts of operating a conveyor-driven carwash could prove too much for Costco.

Nissan’s new product may give carwashes a bad name

Nissan Motor Co., Ltd., recently announced it has developed a clear paint, “Scratch Guard Coat,” that repairs scratches on painted car surfaces.

Nissan claims that this new paint repairs scratches from off-road driving and carwashing machines, a statement that has made many in the wash industry uncomfortable.

A vehicle painted with “Scratch Guard Coat” will have only one-fifth the abrasions caused by a carwashing machine, which account for the majority of scratches to painted car surfaces, Nissan stated.

“This could be a positive to carwashing if what they say is true about the finish correcting itself,” Bud Abraham, president of Detail Plus Car Appearance Systems, Portland, OR, 36 year veteran of the carwash and detail industries and member of the International Carwash Association Board of Directors said.

“However, the problem is the tone of the statement in that they accuse carwashes of being the biggest reason for paint scratches,” Abraham added.

Controversial carwash law may affect the nation

Wash owners around California are receiving notices from the state’s Division of Labor Standards Enforcement (DLSE) unit asking them to comply with new regulations pertaining to all “carwashing and polishing businesses.”

Dean Fryer, spokesperson for California’s State Labor Commissioner said that the carwash regulations, effective Dec. 22, 2005, will require most California wash owners, although there are some exemptions, to register with the state within 60 days of receiving the notice.

Furthermore, wash owners will be required to pay a registration fee of $250, pay an annual fee, and provide a “surety bond” of no less than $15,000 “for the benefit of any employee damaged by his or her employer’s failure to pay wages, interest on wages, or fringe benefits, or damaged by a violation of Labor Code Sections.”

According to Sam Olivito, executive director of the Western Carwash Association (WCA), “It’s (the law) going to have an impact on those people who are not paying their help or are letting workers work for tips only. They’ll have to register, they’ll be caught and they will have to pay the penalty.”

“What disappoints me,” Olivito said, “is that the operators who are operating legally, and will continue to do so, and have done so over time are having to pay for the sins of those who aren’t. That’s definitely unfair. We (WCA) believe that the bill just goes a little bit too far.”

According to Fryer, this new policy may have a far-reaching effect. “There is a possibility that other states may look into the policy if it’s successful in California,” Fryer said. “It’s always a possibility that other states would look at what’s being done elsewhere to see whether it’s needed in their jurisdiction.”

Fire destroys Auto-Vac headquarters

A major fire in Santee, CA, destroyed the 10,000-square-foot industrial building that housed Auto-Vac and parent company G2Equipment headquarters, a manufacturer and distributor of vacuums for car-care facilities.

Auto-Vac representative, Jennifer Tucker said, “The headquarters of G2 Equipment and Auto-Vac was a total loss, the building burnt down to the ground,” Tucker said.

“However, we’re trying to get information out to all of our customers and everyone in the industry that we are still up and open for business, it’s just going to take a little bit of time to regroup,” Tucker stated.

Tucker explained that the manufacturing facilities are located at a different site, which is completely in tact. “We still have total manufacturing capacity,” Tucker said.

G2Equipment and Auto-Vac are owned and operated by Steve Tucker Jr., Michael Powers and Wes Taggart.