What’s Ahead for the Car Wash Industry in 2024?

The Car Wash Industry remains one of the most dynamic and changing business environments in the service sector as we head into 2024. Over the past several years, the industry has grown exponentially due to the customer demand for higher convenience, the rise of the subscription service business model, a variety of ownership models leading to increased growth and economies of scales, and technology advancements to increase overall customer demand. As we look into the proverbial crystal ball for the remainder of 2024, three themes should make their way towards the top of carwash owner’s, business leader’s, and industry expert’s big boards. We will highlight those below and share a preview of what may be more to come.

1. 1. The Car Wash Market Continues to Grow – Whether you are looking to jump into the car wash industry, a financial investor looking to expand an existing car wash portfolio, or a seasoned veteran team looking for great organic growth—signs are strong of continued market growth in 2024. Through various reports, the industry is forecasted to grow at a CAGR of between 3.2% [1] and 5.7% [2] through 2030. Almost half of that growth will occur here in North America. More specifically, market growth of approximately 2.9% could be expected here in 2024. The growth factors known to this industry over the past several years—on the road vehicles, eco-friendly solutions, professional/reliable services, convenience—will continue to reign true into 2024. As we look at the North America automotive market as a benchmark, that industry has a similar growth over a similar time period of approximately 5.4% [3] CAGR through 2029. What does this all mean? This means that regardless of how we operate within the carwash industry, we have a great opportunity to see top-line increases across our locations and our services. As owner-operators these past few years, cost pressures on soap, supplies, and labor have squeezed profits and created some different conversations than in the past. Washes that have invested the time to ‘right-size’ their cost structure stand to benefit for this continued growth through that optimization period.

   2. Enhancing the Customer Experience – With the industry becoming more competitive from various angles, car washes lasered focus on the customer experience is set up to win in the long term. If we enter this conversation with the common definition as how our wash customers leave our car washes after every wash—we can start to understand that every interaction will, and does, play into the customer experience. This goes well beyond the prices we charge and the services we offer—those alone don’t define a great customer experience. What defines a great customer experience is from start to finish how our wash customers perceive the value and the experience. From the membership perks, app-based interactions, cleanliness of the facility, the friendly and personal touch our staff teams have with our wash customers, the quality of our washes, the ability to get our wash customer in, serviced, and back to their day—those are the items we, as owner-operators of washes, must put into focus to enhance our customer experience.All of these ideas resonate with us all, but the question is: what intentionality are we as leaders investing into these areas? How much of our days/weeks are devoted to ensuring we are taking positive strides to an extraordinary customer experience? In compiling this article, three areas to spotlight have a chance to gain more traction in 2024:

      a. Car Wash Apps – Seems like there is app for everything these days—so the question stands, “…does your wash have an app?”. A recent survey conducted by the Car Wash Magazine indicated that wash customers were 83% in favor of an app. As an owner-operator, the ability to connect and direct customers to ‘take action’ can be powerful and help drive additional growth for your wash. From a mobile tracked rewards program, to pushed notifications on promotions, up to date ‘wait times’, managing their subscription at the Wash—all these features at the fingertips of your customer. There is a whole other side to this equation too related to customer data, digital marketing, and positioning your wash and your brand for additional growth. Though app developments can be costly, stepping into this conversation as seeing the future app as an investment and critical infrastructure to the business can change our mindset and the questions we ask.

      b. More Locations – Though this might not apply to all our readers, the data is the data and the same survey by Car Wash magazine indicated 73% of customers wish their favor car wash had more locations. A few things to unpack here. First, an overwhelmingly number of car wash customers are seeking more physical locations. Second, and a bit hidden here, is the brand loyalty that these customers want to maintain. The survey results are not asking for additional carwash options—but rather their current wash to expand to provide more option. Though expansion of carwash locations—through acquisition or site builds—is a strategic and long-term vision play, it is key to understand the market demand and opportunity to capitalize on a great brand and great market positioning in 2024.

      c. Fun-“ness” at the Wash – Hard to have a great customer experience without the word ‘fun’ entering the conversation. As we work to create a great wash process, price our services well, and operate at a high level, don’t forget about how our teams/our wash bring fun to the experience. Whether that is within our culture of how our team members interact with customers, whether we have the ability to provide on-site amenities, or creating a wash experience that excites the whole family. It is hard to put a price tag on fun, laughter, and joy.

   3. Continued Investment in the ‘Core’ – Growth, apps, AI, M&A, are all a part of this great industry. The washes that spend time and energy in these areas do so because of a ‘strong’ core. Thus, in 2024, this is a reaffirmation to car wash owner-operators to make those continued investments in the core business. A few areas that were highlighted by numerous industry experts.

a. Planned Maintenance – What we are talking about here is being proactive in keeping our most critical assets in service. We will always have that inherent risk of responsive or immediate repair/maintenance work; however, the best defense to mitigate or reduce that risk is a good old dose of preventative maintenance. As you begin to review Q1 budgets for the year, ask yourself whether our operational plan has set aside the appropriate resource (time, money, experts) to conduct this planned maintenance. By being proactive in budgeting for these matters, and being intentional about its execution, you can reduce the chances of your wash being ‘offline’ for your customers.

b. Sustainability Matters – The industry starts and stops with water. From a macro view, we have a great opportunity to be a change leader with smart and new conservation efforts to play a role in bettering our world for future generations while still providing for all our stakeholders. The wash customers we service are smart and are continuing to take note of the actions (and non-actions) we are taking around these efforts. The recent Car Wash Magazine survey spotlighted 53% of our customers having interest in a car wash taking a sustainable stance on their business operations, with 48% seeking washes that use ONLY environmentally friendly cleaning products.

c. Fortifying Your Accounting, Tax, & Finance Strategy – It is a rarity to find a thriving and profitable business that does not have a sound plan when it comes to their accounting, tax, and finance needs. Financial statements, numbers, and KPIs can be equivalent to the satellite/navigation maps on a ship. Charting a course before the ship leaves port (e.g., the ship’s path) and having timely feedback during your journey of the execution (e.g., data/satellite feedback) is vital to arriving on time and safe. The same can be said for our car washes. Partnering with a business advisor that understands our business and can strengthen our business position to maximize our accounting, tax, and finance position will allow the owner-operators to continue to drive growth and continue to drive towards their vision.

Though macroeconomic headwinds may appear a bit ‘murky’ at this point, the fact is the car wash industry, as a whole, will remain strong and will see continued growth in numerous areas in 2024. Whether your team is looking to expand operations, design an exit plan, or double-down on organic growth, with a thought-out strategy and the right business advisors, your car wash stands to benefit from what should be another good year from the car wash industry.

As you look to continue execution on your 2024 carwash strategy, consider how your current CPA and business advisor is bringing forward new ideas, delivering on their responsibilities, and enhancing the value of your car wash. Our team would welcome an opportunity to hear your story and what you are looking to accomplish here in 2024.