Over the five years to 2011, revenue decreased at an average annual rate of 1.6% to an estimated $6.1 billion
Los Angeles, California (PRWEB) October 25, 2011
Over the five years to 2016, the Car Wash and Auto Detailing industry will begin to clean up after slumped revenue during the recession. Over the period, revenue is forecast to rise at an average annual rate of 2.5% to reach $6.8 billion by 2016, according to IBISWorld, the nation’s largest publisher of industry research. The industry will benefit from rising per capita disposable income, which will fuel increased spending on discretionary services such as car washing and auto detailing. Furthermore, local regulations prohibiting residential car washing are expected to become more common, which will generate a larger client base for industry operators. In addition, the number of vehicles in use in the United States is projected to rise steadily over the next five years, which will further increase the industry's customer base.
The Car Wash and Auto Detailing industry has been far from spotless. According to IBISWorld analyst, Caitlin Moldvay, over the five years to 2011, revenue decreased at an average annual rate of 1.6% to an estimated $6.1 billion. “Industry operators were adversely affected by rising unemployment, which caused per capita disposable income to contract during the recession; as such, consumers were less likely to purchase discretionary services like car washes and auto detailing services,” says Moldvay. “Furthermore, consumers changed their driving habits as gasoline prices spiked and began using public transportation and carpooling. Together, these trends caused industry revenue to contract 5.1% and 7.7% during 2008 and 2009, respectively. However, demand for car washing has begun to improve slightly with a modest rise in per capita disposable income. Between 2010 and 2011, industry revenue is expected to rise 1.4%."
Profit margins for the average company fell from 4.4% in 2006 to 4.0% in 2011, brought down by decreased sales during the recession and rising utility costs. With falling profit margins and revenue, the number of car washing companies declined at an average annual rate of 1.1% to an estimated 12,828 companies. Industry establishments have diversified services in recent years to adapt to the economic climate. More companies are including value-added services, like interior cleaning, waxing and rim shining, in their more basic packages to build up their customer base. In addition, companies are revamping their waiting rooms and offering Wi-Fi, TV and coffee lounges to generate repeat customers.
According to IBISWorld, demand for car washing and detailing services is expected to rebound slightly over the five years to 2016. Between 2011 and 2016, industry revenue is projected to increase at an average annual rate of 2.5% to $6.8 billion. The industry will be bolstered by rising per capita disposable income towards the end of the five-year period, a factor that will increase consumers' propensity to spend on discretionary services such as car washes. Furthermore, environmental awareness of water usage will increase demand for professional car washing as professional services typically use less than a third as much water as residential car washing.
For more information, download the full report from IBISWorld on the Car Wash and Auto Detailing industry
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