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Car Wash & Detailing Services Industry Review

The Car Wash and Detailing Services industry has gone through a period of growth over the past five years. Early in the period, water restrictions and consumer's environmental awareness regarding the effects of washing vehicles at home, drove consumers to industry operators. Strong new car sales have also supported the industry’s growth, as consumers with new cars are more likely to pay for expensive washing and detailing. Industry revenue is forecast to grow by a compound annual rate of 2.5% over the five years through 2014-15, to reach $526.8 million. Although the high volume of new car sales assisted industry growth over the past five years, a slowdown in sales in 2014-15 is projected to result in more subdued industry revenue growth of 1.2% for the year. The drought between 2002-03 and 2009-10 resulted in harsh water restrictions being introduced, which prevented consumers from washing their vehicles at home. While water restrictions have since been relaxed, consumers have become accustomed to outsourcing their car washing and have continued to do so, particularly in using automatic car washes and self-serve bays. The industry has benefited significantly from these trends, in addition to growing environmental awareness regarding the superior water efficiency and chemical treatment in industry operators’ car washes. The industry has also been helped by rising discretionary incomes and consumers becoming more time conscious, which has driven them to move away from washing vehicles at home.

Similar trends are expected over the next five years. Automatic car washes and conveyor tunnel washes are expected to become more popular, and the industry will become automated to an even greater extent. Increasing urbanisation is expected to take some of the polish off industry revenue growth as consumers drive their cars less frequently. However, there is a strong possibility that El Nino weather patterns will return. This will result in dry conditions and the potential implementation of more stringent water restrictions. Further, consumers are expected to become more concerned about the detrimental environmental effects of washing vehicles at home. Consequently, industry revenue is forecast to rise by a slightly slower compound annual rate of 2.1% over the next five years, to reach $584.1 million in 2019-20.

Adapted from IBIS World Industry Report on Car Wash and Detailing Services in Australia, April 2015

Date Published: 13 May 2016