The automotive beauty market was valued at USD 10,415 million in 2019 and is estimated to grow with a CAGR of 4.9% during the forecast period, 2020–2029.
The carwash retail sales accounted for approximately USD 15 billion, USD 5.75 billion, and USD 1.05 billion in North America, Europe, and Australia, respectively. As per the International Carwash Association, approximately 2 billion and 1 billion cars are washed each year in North America and Europe, respectively. The average price of a full-service carwash is about USD 15, albeit around 20% of the players offering full-service carwash generate about USD 18 or more per vehicle washed. The in-bay automatic carwash generates around USD 139,000 worth of revenue per year and records a net yearly profit of about USD 86,531.
The investment required for establishing a carwash business depends on the type and place. For instance, if the operation involves manual washing, the start-up cost required will be lower than the automatic carwash. Automatic carwash allows the washing of more cars per hour; on the other hand, the equipment has to be replaced every ten years or fewer, depending on the maintenance. Moreover, land acquisition, construction, and equipment expenses are pegged to cost around USD 80,000. The in-bay automatic carwash generally requires approximately 7,000 square feet of land.
Based on type, the automotive beauty market is segmented into cleaning and caring, polishing and waxing, and sealing glaze and coating. The cleaning and caring segment dominated the market with an active share of around 67.8% in 2019. Significant growth in the automotive industry is accelerating the demand for car washing and cleaning systems around the globe. Increasing manufacturing and sales of vehicles and rising disposable income drive the market growth. Stringent regulations imposed by the governments on carwash and automotive beauty drive the market growth. For instance, the National UAE report states that the drivers in the country are prohibited to drive or park dusty cars in public places and are required to pay a fine of USD 400 to USD 800 if they are seen driving or parking such dusty cars.
By application, the market is segmented into auto beauty shops, service centers and garages, and individual sources. The service center and garages segment are projected to grow with the fastest CAGR of 5.3% during the forecast period. Service centers undergo a rigorous certification process to provide automotive beauty services. Several regional and global players are establishing their own car care services to gain a competitive edge. For instance, 3M operates a number of car care service centers in the U.S., India, and Europe. Recently, Turtle Wax Inc. established a car care service center in the U.S. Moreover, Seattle Public Utilities is awarding ‘conservation grants’ to commercial carwashing centers with water reclamation systems, further driving the segment growth.
Based on distribution channel, the automotive beauty market is segmented into the retail store and service center. The service center segment dominates the market with an active share of about 78.2%. Customers prefer buying automotive beauty products from services centers and petrol pumps due to convenience and easy accessibility. Service centers also offer high-pressure cleaners and car service equipment at affordable prices. On the other hand, the full-service carwash centers provide exterior cleaning, drying, interior detailing, shampooing, and steaming to provide overall protection to the vehicles.
Asia-Pacific dominates the automotive beauty market and held about 44.44% of shares in 2019. Rising middle-class population, increasing number of automotive purchases by the millennial population, and increasing spending power drives the regional market growth. India is offering lucrative opportunities in the automotive beauty market. As per the India Brand Equity Foundation (IBEF), the Indian automotive industry witnessed a 9.5% year-on-year increase in sales, reaching about 4.02 million units (excluding two-wheelers) in 2017. In India, increasing sales of luxury vehicles are driving the demand for professional car care services, further driving the market growth.
The Middle East and Africa offer lucrative growth opportunities for market growth and are expected to grow with a CAGR of 3.2%. The automotive vehicle sales are increasing at a rapid pace due to economic oil prices. The UAE is an early adopter of innovative technologies, further driving the market growth. Car owners in the region are inclining towards ceramic coatings to prevent their vehicles from UV rays and extreme temperatures.
The UAE government has implemented several laws to maintain cleanliness and image of the cities, further driving the market growth. Cities such as Abu Dhabi, Dubai, and Sharjah have implemented strict rules regarding the use of unclean or damaged cars. As per the Abu Dhabi Municipality, almost 500 motorists were fined for having excessively dirty vehicles. As per the Dubai Municipality, around 12,000 vehicles were towed in 2017. Additionally, washing vehicles on streets is banned, further driving the demand for professional carwash services.
3M’s investment strategy is to manage funds on a going-concern basis. The company uses its fund returns to finance its present and future obligations, thereby reducing the potential need for additional contributions. 3M leverages its fundamental strengths by employing about 46 platforms and deep intellectual property across businesses. One of its strategies is to add brand value in each of its businesses while still maintaining a focus on customer demands.
Turtle Wax develops and implements strategic communication, short-term, long-term, and annual operating plans. It plans to establish and maintain a consistent brand image throughout all product lines, promotional materials, events, and marketing communications and looks forward to focusing on brand promotions, public relations, and advertising.
|Report Coverage||Revenue Forecast, Competitive Landscape, Growth Factors, Environment & Regulatory Landscape and Trends|