What’s the future for the car washing sector? Like so many industries, car wash and detailing has suffered a downturn from Covid-19. The good news is there are plenty of positive trends that will help drive this business into the future.
According to an IBISWorld report, Car Wash and Detailing June 2021, there is only one major player with a market share above 5 per cent. Magic Hand Car Wash is the single biggest hand car wash provider in Australia, with 45 outlets, and it is the industry’s largest player in revenue terms. The business model includes a cafe.
Other significant players include BP Australia, Coles Express Car Wash, and Mpower Franchising, which is the parent company of mobile detailer Car Care.
Franchises typically operate in the hand-detailing and mobile sector.
What’s the market?
- Onsite automated car washing, premium manual hand detailing, mobile services
- No dominant brand
- A mature market
Market snapshot
The good news
- Greater awareness of environmental impact of washing cars at home
- Rising discretionary incomes and stronger economic conditions
- Consumers outsourcing tasks
The downsides
- Increased urbanisation, more people are using public transport
Why manual wash or mobile services are a good business option
- Manual and mobile car washing are increasing amongst higher income consumers. High-value customers with expensive cars and household incomes at the top level have remained strong.
- Premium mobile services are increasing their market share.
- Climate concerns will help drive business.
Forecast 2022-27
- Annualised 3.2% rise in revenue to $577.7 million
- Increased number of motor vehicles will grow the market
Challenges in car wash market
- Wages are a bigger part of expenses but manual hand washers tend to work part time, so costs are constrained
- Other major costs are cleaning products/accessories and franchisors often control these costs through wholesale deals
What will bring in business?
- Convenience
- Price
- Loyalty discounts
- On sites, revamped premium areas, proximity to motor vehicle repairs
Who are the competitors?
- DIY home washing and detailing
- Local competitors
Source: Car wash and detailing June 2021 report from IBISWorld.