Car Wash Service Market

Market Overview

The global car wash service market revenue was valued at USD 27.83 billion in 2022. It is estimated to reach USD 40.24 billion by 2031, growing at a CAGR of 3.63% during the forecast period (2023–2031). Car washes go green! Eco-friendly options use less water (8-70 gallons) than traditional washes (15-80), thanks to tech like recycling and filtration. This trend is driving innovation in car wash essentials.

A car wash, also known as an auto wash, is a facility utilized to clean the exterior and, in some instances, the interior of automobiles. Car washes come in three varieties: self-service, full-service (where staff members wash the car), and automated (possibly connected to a filling station). A car wash may also be a fundraiser when attendees pay to wash their vehicles by volunteers who frequently use less sophisticated equipment.

Detergents and other cleaning agents used in modern car wash facilities, whether tunnel, in-bay automatic, or self-serve, are made to loosen and get rid of dirt and grime. The industry has begun to transition to safer cleaning agents. Car washes on machines, especially those that use brushes, risk destroying the outside finish. Both paint finishes and car cleaning techniques have improved. Modern "foam" washing wheels constructed of closed-cell foam are also being used in more facilities, along with "brushless" (for fabric) and "touch-free" (for high-pressure water) machinery.

Highlights

• Cashless payment dominates the mode of payment segment
• Roll-over/in-bay dominates the type segment
• North America is the highest shareholder in the global market

Market Dynamics

Market Drivers

High Adoption of Professional Car Wash Services

There has been increasing movement in the car wash industry owing to technological advancements and consumer preference for convenient and reliable car wash options. Many car wash service providers sell automotive products, vehicle safety inspection, repair and maintenance, and pick-up or drop-off services. This factor is further boosting the adoption of car wash services.

Consumer preference for getting their cars washed by professionals as against doing it on their own is growing globally. Mushrooming service providers across towns and cities are also helping generate opportunities in the industry. According to a blog post by Medium, there were 16,000 car wash outlets in the U.S. in 2018. These include individually owned outlets and nationwide car detailing chains. WashTec/Mark VII alone washes over two million vehicles each day. Therefore, professionals' high adoption of car wash services will propel market growth during the forecast period.

Increasing Consumer Spending on Comfort and Relaxation

The car wash industry heavily relies upon discretionary spending and consumers' driving habits. A rise in consumers' disposable incomes is likely to help the industry rebound over the forecast period. There has been a significant decline in the percentage of consumers who wash their vehicles at home due to the speed and convenience offered by car washing businesses; the trend is rapidly shifting from 'Do-It-Yourself' to 'Do-It-For-Me.'

Consumer spending tendency has been increasing over the years, with a growing number of consumers demanding comfort and luxury. This will influence car washing services and create a profitable scenario for supplementary markets. As consumers continue seeking various comforts, companies have been experimenting with automation and advanced technologies to provide innovative services, fueling market growth.

Market Restraint

High Costs Associated with Car Wash Services

High costs associated with professional car wash services result in a setback for the industry as more consumers are motivated towards Do-It-Yourself (DIY) car washes. Car detailing prices vary depending upon the number of services, which are largely based on the business's detail, professionalism, and reputation. According to Auto Detail School, detailers charge between USD 150 and USD 200 through independent detail or car wash establishments.

Basic car detailing services include wash, wax, interior vacuuming, interior polish, window wash, mirror and trim cleaning, and tire cleaning. Car detailing services for an average-sized vehicle range from USD 50 to USD 125 and USD 75 to USD 150 for an SUV or a van. An upgraded package would cost approximately USD 150 for regular-sized vehicles and USD 175 for larger trucks and vans. This has been adversely restraining the overall revenue of the market.

Market Opportunities

Rising Demand for Eco-Friendly Car Wash Services

Eco-friendly car wash services have been gaining traction in the industry; thus, manufacturers are moving towards the production of eco-friendly and effectively regulated car wash essentials. Traditional car washes use 15 to 80 gallons of water per vehicle without water conservation equipment. However, the environment-friendly version uses only 8 to 70 gallons per vehicle when equipped with water reclamation or filtration technology.

Professional car washes have used water reclamation technology for 30 years. Still, it has only recently acquired significant traction as producers and policymakers have focused on quality assurance and resource conservation. Professional car washes also incorporate various technologies that make the customer experience easy and quick. For professional car washes, businesses like WashCard have started creating payment portals that let consumers make mobile payments and create automated billing and cleaning schedules. Therefore, the consumer shift towards eco-friendly services is expected to create opportunities for market growth.

Regional Analysis

Based on region, the global car wash service market is bifurcated into North America, Europe, Asia-Pacific, Central and South America, and the Middle East and Africa. 

North America's car wash service industry share is anticipated to exhibit a CAGR of 3.51% during the forecast period. The North American market's growth is driven by the changing business dynamics in the region, along with a large number of strategic alliances between the players in the market. In October 2020, the International Car Wash Group (ICWG) acquired Village Express Car Wash. With this acquisition, ICWG increased the number of locations under the Goo Goo Car Wash and Car Wash USA Express brands in the US to 18. ICWG is positioned for additional growth in the country through acquisitions and new site development scheduled for completion in mid-2021.

The entry of new players in the market has also been boosting the market. For instance, in May 2019, Car Wash USA Express established its car wash center in Mountain Home, Arkansas. Since its official opening, a large number of car owners have visited the center to enjoy its new car washing experience. The company filled a void that most people didn't even realize they had and set a bar for a great car wash. The proposition of cashless payment, along with the rapid adoption of the trend, has also been propelling this growth.

Europe is estimated to exhibit a CAGR of 3.3% over the forecast period. The growth of the European region can be attributed to key players taking several initiatives to boost market growth. In June 2020, MultiWash, a Polish startup, expanded its car wash network across the Czech Republic. This network expansion in the country connects over 150 car wash sites. MultiWash (2017) also plans to launch a Series A round for further expansion into Slovakia, Austria, and Germany markets. From the user's point of view, MultiWash saves both time and money, as the subscription plans are, on average, 30% cheaper than pay-per-use payments.

Additionally, the region is home to some of the leading cashless economies in the world. According to The Merchant Machine study conducted in May 2020, the Netherlands ranked at the top of the list of most cash-free countries in Europe. The country exhibits a notable prevalence of contactless payment transactions, constituting more than fifty percent of all transactions. It also boasts the highest ownership rate of debit cards, with an impressive ninety-nine percent of individuals possessing one. Such trends across Europe drive the demand for cashless payment modes for the car wash service market.

In Asia-Pacific, the growing service availability is driving the industry's growth. In January 2021, GMR Hyderabad International Airport, India, introduced a Water-Less Eco Washing facility to sanitize cars to make passenger travel safer. The car washing service includes exterior cleaning, vacuuming, tire cleaning and polishing, air freshener, dashboard dressing, and deep cleaning using special 3M products. One of the Water-Less Eco Washing kiosks is at the entrance of the car parking zone - C, and another is dedicated to taxis near the airport lodge at the taxi staging area. Along with this, business dynamics can also be seen changing rapidly.

Additionally, the formation of alliances results in the emergence of novel consequences. For instance, in June 2019, CleanseCar Washing and Repair Services Pvt. Ltd, a mobile application-based car wash service provider, acquired Carnanny Solutions Pvt. Ltd in a stock deal. Carnanny's entire team will join CleanseCar as part of the transaction. The transaction helped CleanseCar acquire access to the 32 societies to which Carnanny was providing services in Mumbai.

The Middle East and African market has been undergoing rapid technological advancements. For instance, in December 2020, South African tech startup My Washbay digitized its car wash service to shake up the car wash industry with technological advancements and tools and enhance customer experience. With an app currently in development, My Washbay is web-based and offers unique services for car wash owners and customers. The service is available in Johannesburg, but My Washbay plans to expand its offering nationally and globally.

Segmental Analysis

The global car wash service market is segmented by mode of payment and type.

Based on the mode of payment, the global car wash service market is bifurcated into cash payment and cashless payment.

The cashless payment segment dominates the global market and is projected to exhibit a CAGR of 4.4% over the forecast period. Installing an integrated payment solution, or point-of-sale (POS) system across pay stations, enables car wash business proprietors to increase their efficiency to increase sales and obtain comprehensive customer data. Millennial customers expect to be able to use whatever method is the most convenient for them, including tokens, loyalty cards, debit cards, EMV-enabled credit card payments, or via mobile payment options. Moreover, to execute secure payment, many operators in the market are more inclined toward using cashless payment modes.

Using an integrated payment system simplifies the way a business is managed by making it able to track supplies more easily, obtain useful customer data, and accept multiple payment methods. An integrated system simplifies the entire car wash experience for operators and customers. In addition, Loyalty Club and monthly membership plans have long been a favorite payment offering for carwash operators. Charging a monthly fee for all-you-can-wash access to a location or chain of carwashes has proven popular with owners and customers. Consumers are purchasing these subscriptions via online platforms or from the company website.

The majority of the self-service car wash station have coin meters to use the service. As per a research study conducted by Professional Carwashing & Detailing (PC&D), cash/coin payment (75%) and last coin alert (69%) are the most prevalent payment methods, while a credit/debit card system is used by 48% of self-serve carwash sites and 25% accept token payments. Moreover, per the International Carwash Association, Inc., most In-Bay Automatic (IBA) car wash centers near gas stations use coin-operated payment modes. In 2019, 30 percent of Americans paid in cash at car washes, according to the Pew Research Center. However, owing to the growing popularity of digital payment modes and ease of convenience for consumers and operators, the demand for cash payment is estimated to be lower over the forecast period.

Based on type, the global car wash service market is segmented into tunnels, roll-over/in-bay, and self-service. 

The roll-over/in-bay segment owns the highest market share and is predicted to exhibit a CAGR of 4.01% over the forecast period. In-bay automatic systems provide touch-free washing methods that use high-pressure water to clean the vehicle and provide friction, soft-cloth brushes to clean and spread the detergent and polish on the vehicle, and rinse-off to finish the process. These in-bay/roll-over automatic car wash services have various benefits, like simpler customer interaction and impulse-driven purchases, and are ideal for smaller spaces. The initial equipment/building usually costs around USD 200,000, less than tunnel car wash systems. These machines primarily offer an exterior wash with throughput typically averaging between 10 and 15 cars per hour.

In addition, the construction of automatic wash facilities on auto dealership properties has been fuelled by auto dealerships' growing involvement in the car wash service sector. Auto dealers add automated car washes to raise Customer Satisfaction Index (CSI) numbers, with in-bay washes being the most popular option among customers. As a result, in-bay/roll-over automatic car wash services experience a growth spurt.

The primary service offered by a self-serve car wash system is a manual exterior wash. The self-serve car wash sites are often outfitted with one or more automatics (roll-overs) and additional self-serve offerings, such as vacuums, shampooing, and vending. These self-serve washes are commonly unattended and are mostly found on secondary roads in high-density residential areas. In addition, customers who want to detail their cars are overwhelmingly drawn to self-service car wash facilities. In 2018, 36,000 locations in the U.S. offered car owners the chance to wash the outside of their vehicles and options for vacuuming the inside, according to a blog by JBS Industries. Self-service car wash service operators incorporating various services to provide increased value to their customers is boosting the penetration of this segment.

Recent Developments

• May 2023- Repsol announced the establishment of Spain's largest car wash network under the brand name Klin. The energy company intends to have 300 sites by the end of the year, with mobile payment and digitalization at their foundation.
• July 2023- Clean Express Auto Wash, a member of the Express Wash Concepts family of brands, announced the groundbreaking for their eighth car wash in Toledo. On Friday, July 7, 2023, the groundbreaking ceremony occurred for the new Clean Express Auto Wash facility in Maumee, Ohio.