Apoet once wrote: No one knows what happens to you when you die, and that is a fact of life. Similarly, one of my college professors opined: All small businesses do not succeed and the ones that do don’t last forever.
Every business, product, or service inevitably reaches maturity, beyond which state it faces either renewal or decline. Its future course depends largely on decisions made by the business owner. This means extending the life of the business or product through innovation and reinvestment, riding the decline, or exiting the business.
For example, let’s examine how U.S. car wash demand has changed. Data published by the International Carwash Association (ICA) suggests home washing has declined from 44 percent in 2000 to about 28 percent in 2014. However, preference for commercial car washing, expressed as an index, suggests this rate of change is slowing down. Of course, this makes sense from a practical point of view because it would not be rational to expect home washing to ever reach zero.
Next, let’s examine how the supply side has changed. According to information presented at a recent Southwest Car Wash Association (SCWA) meeting, car wash equipment spending has recovered to levels prior to the last recession.
In terms of growth, the conveyor segment is outpacing the other segments and eight out of every 10 conveyors built today are exterior express. Moreover, there are about 20,000 fewer commercial car washes today as compared to 2000 levels.
So, given expectations for consumer spending, car sales, and environmental awareness, the five-year outlook for the car wash industry is positive. However, fueling the supply side is no longer the stuff of mom and pop investors. For instance, the current investor base is now described as largely established family-owned territories (i.e., operator types) and car wash investors that are strictly all about business (i.e., MBA types).
Notably, pundits mention these investor types look for opportunity in any market and are willing to build an express wash next to an existing full-service that can’t be converted. Consequently, a new role for OEMs is described as referee.
However, history has shown this is a role that OEMs may find very difficult if not impossible to fill. For example, consultant or peer advisors might suggest “reconsider,” whereas sales representatives (closers) are not trained to say “no.”
Next, let’s examine future competition. Here, pundits see a horizon that may include a resurgence of car washing at gas sites, more auto dealer car washes, big-box washes, and perhaps a national franchise.
However, will everyone play along? For example, ICA finds the top reasons consumers don’t buy a car wash more often is expense, need, and time. On the other hand, we could also argue there are simply more lazy people (i.e., couch potatoes), the younger generation has different ownership and car-care habits, and people are simply keeping their cars longer (older cars wash less frequently).
What about the folks that manufacture cars? For example, the SCWA presentation described a number of issues such as brake sensors, transmission neutral engagement, and vehicle finishes for which OEMs recommend against commercial car washing.
Moreover, firms like PPG that make paint continue to push the boundaries of automotive coating technology. According to PPG’s website, 2K clear coat, CERAMICLEAR®, is the first clear coat to use abrasion resistant technology to achieve previously unattained levels of scratch, mar, and etch resistance.
This patented technology creates a hard, ceramic-like surface that provides superior resistance to damage caused by day-to-day use and environmental hazards such as acid rain and tree sap.
The aftermarket is also getting into the game. For example, Rain-X recently released new windshield wiper blades that has the company’s patented rain repellent technology embedded in them.
There are also new coatings like UltraEverDry made by Ultratech International Inc. EverDry is technology used on Nissan’s experimental Leaf vehicle with self-cleaning paint. EverDry establishes a polymer coating that significantly increases durability through a complex protective matrix.
What it also does is create a “super-hydrophobic” surface that causes water and grime to literally fly off the surface. Some of the benefits of such coatings would be to keep cars clean longer as well as easier to clean when washed.
Bob Roman is president of RJR Enterprises – Consulting Services (www.carwashplan.com). You can reach Bob via e-mail at email@example.com.