The demand for carwash services has been rising over the past decade, according to Grand View Research (GVR).1 This trend is expected to expand at a compound annual growth rate of 4.8% from 2021 to 2028, according to the GVR report “U.S. Car Wash Service Market Size, Share & Trends Analysis Report By Type (Tunnels2, Roll-over/In-bay3, Self-service4), And Segment Forecasts, 2021 – 2028.”
Seven key factors are driving these growth trends in North America and beyond, including:
- More vehicles per household. It’s not unusual for modern households to have three to four vehicles. “There are also plenty of districts where new housing options are going up rapidly,” Lee Norton, CEO of Mark VII Equipment says. “That means opportunity for new carwashes, even in areas where carwashes already exist.”
- Customer demand for more convenience. Busy schedules and time constraints have prompted more consumers to use professional carwashes, rather than cleaning their vehicles at home. “Customers today don’t have a lot of time, and they don’t want to wait,” Norton says.
- Environmental regulations. More communities have adopted regulations that prohibit residential carwashing practices, according to Norton. This helps expand the customer base for professional carwash businesses.
- Profitable business opportunities. The carwash business can fit a wide range of owners, from a retiree looking to invest a pension to a private equity group with multiple carwashes in its portfolio. “A carwash can offer a significant return on investment,” Norton explains. “While operating profits vary, depending on the business model, carwash gross margins are very attractive.”5 A carwash is a relatively simple business to run that can provide a long-term income stream. Carwashes also tend to have strong resale value, Norton says. “If you’ve operated a well-run business, it’s usually not hard to sell a carwash business.”
- More carwash options. If you have a piece of land in the right location, you can get into the carwash business. There are a variety of carwash options an owner can configure, from in-bay automatics with a soft-touch or touch free wash (the type often seen at convenience stores) to tunnel systems and more. “There are lots of choices, along with options within options,” Norton says. “It’s important to choose options that fit the size of land and location you have and suit the needs of the local community.”6
- New technology. In years past, it wasn’t uncommon to experience serious peaks and valleys in a carwash’s income stream, especially in the winter. Modern technology can provide more stability to the income stream. Consider the subscription model. Similar to a monthly gym membership, the subscription model allows customers to choose a wash plan, pay a monthly fee and get an unlimited number of carwashes. “This model has become more popular in the last 10 years,” Norton confirms. “It’s a win-win, because it lets customers wash their car as often as they like, and it offers cost savings for the car-wash operator.” Since membership customers tend to wash their vehicles more often, this makes their vehicles easier to clean. “When soiling is less heavy, this means less wear-and-tear on the carwash equipment,” Norton says.
- Support for carwash owners. Multiple companies in the carwash industry can supply everything needed to start a carwash business. Not all of these companies are created equal, though. If you’re thinking about starting a carwash, reach out to two or three companies, visit with them face to face, and watch their technology in action, Norton advises. “Not only should you ask questions about the products and training they offer, but also listen to the questions they ask you,” he says. “They should be asking you for details about the size of carwash you’re thinking about, the vision you have for your business, the layout of your property and more. You want a partner who is knowledgeable, honest with you and isn’t just trying to sell you stuff.”
Mark VII offers years of experience in the carwash industry and supports customers across North America and around the globe. “As a company, we’ve been around for 55 years, and we have support techs all over North America,” Norton says. During the onset of the COVID-19 pandemic, there was never a day in 2020 when Mark VII closed its factory doors, he adds.7 “We kept building carwashes and providing customer support.”8
The potential for growth in the carwash industry remains strong in the foreseeable future, concludes Norton, who encourages you to contact Mark VII for more information. “This is a fun business, and market opportunities are wide open.”
Lee Norton is the CEO of Mark VII Equipment and provides insight into the carwash industry’s exciting growth patterns.