At the International Carwash Association’s Splash! event in New Orleans, ICA CEO Eric Wulf shared his thoughts about what the future holds for the car wash industry. His
thoughts covered what those in the industry should be nervous about, but also things for which to be optimistic.
PHASE 1: THE BEGINNING
Before jumping into his predictions, Wulf shared data points illustrating the historic growth the industry has experienced over the last 30 years. That growth is due to five major trends, said Wulf.
More households own cars than they did in the advent of the car washing industry. “In the 1940s, only 45 percent of households owned a vehicle,” said Wulf. “Today, it’s 95
percent of U.S. households that own a car. And we gotta have cars, to wash cars, right?”
More estimated miles traveled. Between 1960 and 2006 the total estimated miles traveled by passenger vehicles is up more than 2 million miles. “More cars, traveling more miles, getting dirtier,” he said.
Consumers’ increasing choice to use a professional car wash instead of washing at home. In the mid-1990s, respondents to the ICA Consumer Study reported that 47 percent had their cars washed professionally. In the most recent study released this year, that number swelled to 69 percent.
Improved design of cars. Cars are better made today, both in the design and the choice of materials and fabrication.
Car washes are better. “Look at what we’re doing with the chemistry, the wash sensors, our ability to map a car’s outline – all these things are great and limit the damage we
see at the washes, and allow us to clean more effectively,” said Wulf.
PHASE 2: THE LAST 5-10 YEARS
More recently, Wulf shared several trends that he believes have contributed to the industry’s latest phase of growth, including retail, subscription models and capital.
The car wash industry is finally becoming competitive from a retailing perspective. “When I first joined the association and the industry in 2006, the great car wash companies
people talked about were operators only,” said Wulf. “Now, I see the conversation about great companies shift to those who are doing great retailing. I think it’s just the beginning
and a very exciting trend.”
There’s also been growth that’s developed mainly due to the popularity of the Netflix model: Unlimited wash clubs. “This has changed the profitability equation for car washing,” Wulf said. In the car wash industry, the weather has a great impact on one’s ability to do work and make money. “But the unlimited club has certainly changed cash flow, it’s changed how you market, and it’s really changed the P&L and the consistency of your performance over and throughout the year. It’s been a huge game-changer,” Wulf said.
Access to capital has also been a major growth driver. “This could be private equity, private money or commercial lending,” he said. This change, said Wulf, is a great
development for those who are interested in selling in the near future, and even for those who don’t want to sell. “The more that car washing as an industry becomes a bankable,
reputable and researchable industry, the better you are for commercial lending as well. That hasn’t been easy when we have small, privately held, non-disclosed financials as an industry,” said Wulf.
All of this, Wulf says, bodes well for the future.
WHAT’S COMING AND HOW TO PREPARE
While many factors have contributed positively to the industry, there are some trends whose impacts are not yet known.
The first emerging trend Wulf shared was that of Advanced Driver Assistance Systems (ADAS). “This is all of the automated systems that controls brakes, transmissions, stop-
starts on vehicles,” said Wulf. “ADAS won’t necessarily be a game-changer for the car wash industry, but boy, is it a pain in the butt right now. As vehicles get smarter, it means
there’s more that we don’t know how to operate on the car, and affects our ability to process vehicles.”
Then, there’s the concept of hydrophobic coatings. “If you want to lose sleep at night, look into this,” Wulf said. This technology was developed to adhere to any structure – cars, houses, clothing, etc. – and repel water and dirt. “So far, this has been proven to have low durability and it’s also expensive to apply,” he said.
And there’s also the unknown impact of car subscription services, specifically existing models like Clutch in Atlanta and Drive by Cadillac. These subscription services allow
customers to pay a monthly fee and have access to any vehicle they want, without a title. “It’s like Netflix,” Wulf said. “Just stream a vehicle. You can trade out your vehicle at any
time, and the car is delivered to you with a full tank of gas and recently washed.”
According to Wulf, autonomous vehicles can present an interesting opportunity too. The real need and opportunity is to ensure that the car wash industry is visible to the cars.
“No, autonomous vehicles won’t be total market in our lifetimes, but it’s something to be thinking about,” he said. While the full impact of autonomous vehicles is still unknown, Wulf said there was reason to be optimistic.
The final emerging trend the industry needs to be aware of is something Wulf called right to wash. “This is a phrase we’ve invented,” he said. “You may have already heard of
‘right to repair.’ It’s the idea that manufacturers can make proprietary parts the ONLY parts. As vehicles become more complicated, manufacturers might require that customers go to an authorized car wash – like a dealership – for their washes, rather than choosing any wash they want. This is something we’ll have to watch.”
REASONS TO BE OPTIMISTIC
While there’s a lot to be cautious about and aware of, Wulf said that there’s a lot to be optimistic about, as well.
One opportunity is increasing your visibility in the digital sphere, which tied closely to his thoughts on autonomous vehicles. “Our washes have to be visible in the future to the
driver, but also the car,” he said. “We have an opportunity if we get on it now. We need to be ready for Siri and Alexa to read reviews on Yelp about the car washes up ahead. We need to figure out what we can be doing now to feed info into the digital world so we’re an attractive choice to the driver and the car.”
Another area for optimism is that of alternative site locations. “If cars can drive themselves to get washed, what would be the most convenient time for it to get done? At night, while its owner is sleeping,” said Wulf. From Wulf’s perspective, it won’t matter what distance the car has to drive, since the owner is asleep, and therefore will provide car wash owners with new flexibility on site locations, possibly targeting the cheapest piece of land available. This change could also impact a wash’s capacity throughout the day – and night. Wulf next came back to one of his earlier subjects: subscription models. Wulf said he believes deals with these subscription models and fleet contracts should be something the industry considers if the transportation habits of customers continue in this direction.
If automation continues to happen, one service that will provide space for specialization is interior cleaning. “This is going to be a niche,” said Wulf. “What will interior
cleaning look like? This is still an intimate space for customers. As the exterior space changes, we have to figure out what’s next for the interior.” Wulf thinks the industry is about to experience a great amount of technological change but that’s not necessarily something to worry about. “I think there’s a lot to be optimistic about,” he said. “With challenges, there will be plenty of opportunities.”
