Local commuters and residents wanting to keep their vehicles spotless have gained several new car wash options recently with multiple Woodie’s Wash Shack, ModWash and Tidal Wave Auto Spa locations opening, as well as even more planned to compete against established local operations such as Jules Car Wash. Many have been wondering why this area has seen such sudden and unexpected growth in the express car-wash industry.
“We believe nearly a thousand new stores per year are being built in the U.S.,” said Eric Wulf, CEO of the International Carwash Association. “Over the past 20 years, consumer preferences have shifted from ‘do it yourself’ to ‘do it for me.’ Sunshine states have historically been popular for car wash services.”
From an investor’s perspective, the express car wash business model is a marathon, not a sprint; with the high initial cost of land and construction eventually offset by leaving income moving forward going — hopefully — mainly towards profit. With minimal annual employee cost and expenses, including water, electricity, maintenance, insurance and taxes, it is about as close to passive income as can be found by investors in the massively lucrative automotive industry.
Tampa Bay is especially appealing to developers in the car wash business due to our relatively low number of already existing locations, as well as the high car-to-household ratio. With the influx of new residents moving into the area, most commuting longer distances, vehicles get dirtier faster. Add in construction dirt, pollen dust, salty air and the occasional lovebug invasion and the demand is here.
Valued at over $15B in 2022, projected growth for the industry is to remain between 4-5 percent through 2030 due to the focus of consumers toward vehicle maintenance. The most cited reasons for the explosion of the express car wash business model include the success of the subscription programs offered, coupled with low operating and labor costs associated with conveyor-belt systems.
Express car washes, also known as tunnel washes or conveyor washes, are almost fully automated, require very little labor and use conveyor or belt equipment to move vehicles through the car washing process. Most offer do-it-yourself vacuums, with some having optional detailing services. They are consistently the most profitable in the car wash sector in the U.S., where more than 72 percent of drivers use professional car wash services an average of 13 times per year.
“Thanks to the widespread digitization of money, it’s easier to get banks on board these days. Banks weren’t really favorable of the business model in the past because it was mostly a cash-run business, but with memberships paid digitally now responsible for 90 percent of the income and only 10 percent cash, lenders are more receptive when it comes to financing,” said Glen Stygar, partner/vice president of operations for Woodie’s Wash Shack.
When asked about the saturation of car washes in close proximity, Stygar sees it another way.
“We don’t look at competition, we have a market plan to build over 50 stores on the west coast of Florida,” Stygar said. Like Wulf, he believes the shift in consumer habits towards do-it-for-me parallels the growth of the express oil-change business.
“I believe our competition is your driveway. We’re pulling people out of the driveway, just like we used to change our own oil,” Stygar said. “We see that happening in the car wash industry. You stay in your car and buzz through the tunnel in three minutes. Why use up to 120 gallons of your water when you get it done here using 30 gallons of ours? It’s a far more efficient use of water, and it’s quicker. Multiple locations near where you work, where you live and where you play give everyone the option of cleaning their ride whenever they find the time. We are also expanding into neighborhood developments with well-established tenants, such as Starbucks and Wawa, welcoming us as neighbors” due in part to the modern architecture used to designing Woodie’s storefronts.”
