According to the National Automobile Dealers Association (NADA), there are 16,680 franchised car dealers in the United States. In 2015, these dealers sold a record 17.3 million vehicles and sales topped $938 billion.
According to Kelly Blue Book, the average new car transaction price in 2016 was $33,651. The typical dealer sells, on average, 1,037 new vehicles annually and services 17,986 vehicles per year. According to Manheim North America, franchised dealers sold a record 2.5 million pre-owned units in 2015 or an average of 150 units per store.
If we add this up, the typical franchise dealer might have the need to wash and dry about 19,000 cars per year or an average of 60 per day. If the average wash price were $7.00, car washing at franchised dealers would have a market value of $2.22 billion or about 11 percent of the estimated total available market.
DEALERS AIM TO PLEASE
Franchised car dealerships are now quite different than those I worked at and worked with during the early 1970s. Today, dealers strive to satisfy service customers knowing that a positive experience correlates with future business.
Manufacturers monitor this through feedback surveys sent directly to customers, and dealers aim to score high on these surveys to receive recognition from the manufacturers. The service department of a modern American dealership is the epitome of state-of-the-art equipment and highly trained technicians.
Today, most dealers go above and beyond to satisfy customers and make their experience as pleasant as possible. This includes things like expanded service hours, shuttle service, vehicle pickup and delivery, texting to owners when cars are ready, on-site loaner cars, fast service lanes for oil changes, and a free car wash with service.
Most franchised dealers also have comfortable customer lounges with WiFi, computers, daily newspapers, separate play areas for children, and free coffee and donuts. In fact, when our car needs servicing, I usually volunteer to take it because our dealership offers many of the comforts of being at home or the office.
Most car wash operations at dealerships involve hand washing with a pressure washer or one or two in-bay automatic rollovers as shown on page 24.
However, some dealers have more substantial car wash operations. Consider Beechmont Automotive Group, a large auto dealership (Porsche, Maserati, Audi, Volvo, Toyota, Honda) serving the Greater Cincinnati, Dayton Ohio, and Northern Kentucky areas.
In addition to in-house operations, Beechmont owns and operates three retail car washes (full-service and express), one with an ice cream business located within the lobby.
OPEN TO THE PUBLIC
Pundits opine that what many dealers don’t realize is that they can turn their car wash from a cost center into a profit center by making it open to the public. However, this isn’t as easy as it may sound.
First of all, as shown above, the car wash is usually tucked into the back corner of the dealer’s property and generally used to clean vehicles in for service or collision repair work or to periodically clean the on-lot vehicle fleet.
Second, most dealers have selected technology that features a small wash bay into which the vehicles are driven (see the graphic, on page 25). Bays might be outfitted with a stationary drive-through wash or in-bay automatic rollover with cloth brushes. Many of these systems rely on technology dating back to the 1970s.
In some cases, dealers that tire of incurring maintenance costs with keeping these old machines up and running will gut their bays and rely on hand washing and drying vehicles.
However, this is a big step backwards because experience shows hand washing is not an efficient or cost effective method to clean vehicles and it is extremely water intensive. For example, a NADA report on Energy Star guidelines for auto dealers states that a water reclamation system can reduce fresh water use by up to 60 percent.
Dealers that install a wash also stand to gain from investing in LED lights, instantaneous water heaters, NEMA motors, and variable speed drive controls that save energy.
Modern car wash control systems use web-based browsers that can be accessed via computer, tablet, or smartphone without the need for any special computer software. This gives dealers real-time access to key functions of the wash system as well as allowing the remote configuration of wash packages, machine functions, sales monitoring, and wash activity.
Research shows that wash materials such as closed-cell foam brushes actually shine the vehicle paint as it cleans it. Moreover, advanced spray-on chemistry is available that not only produces noticeable shine but also repels water on glass and paint for up to 30 days.
Since the technology exists, we could argue it is the nonphysical constraints that would prevent a dealer from installing a car wash system. For instance, Harr Motor Group (Toyota, Chrysler, Jeep, Dodge, Ram) in Worchester, MA, provides purchasers of a new or pre-owned vehicle with 18 free car washes per year for the lifetime of that vehicle. Whereas my previous new car dealer made no such offer but rather offered a one-hour hand wash for $25.
Of course, there are situations where the lack of sewer capacity, available space, or other constraints would prevent a car wash from being technically viable.
However, even in these cases, there would be nothing to prevent a dealer from operating a mobile unit to provide customers with waterless hand car washing and detailing services.