Cost Per Car Wash

[a4wagon]

Hi everyone,

I am new to this industry and trying to learn as much as possible from everywhere. I am very happy to be on this forum where I am able to read and ask some of very experience car wash owners.

Looking to open one and then multiple car washes in East Europe where the automatic car wash systems are not very popular. I am trying to learn as much as possible in USA and Canada and then try to apply the same things in there.

Before moving any further with my research I need to calculate the operation costs per car wash. I would kindly ask owners to provide their numbers.

Particularly interested in tunnels and totally touch free systems. Not decided yet but hopefully once I have more data will make more sense which system is more cost effective. Can you guys please post some numbers, I know everyone has different numbers but I would like to get an average, high and low.

Basic Wash and Better wash
1. Water cost in terms of liters per car wash.
2. Chemicals per car wash
3. Electricity per car wash
4. Equipment maintenance per car washes

At the end of the day I need to know how profitable this business is. I know there are a lot of factors of what equipment you use, weather, suppliers of chemicals, water cost , electricity bill, employees area you are in but I need to know some numbers so I can calculate this for East Europe and see if it all makes sense.


Looking forward for some useful information.

Really appreciated it.

 

[JustClean]

Hi a4wagon,
Eastern Europe is a totally different market then the US & Canada. What looks similar sometimes isn't. If I were you I would try to find a local dealer in your country and talk to other car wash owners over there. This is a good start. For example, a touchfree car wash in Germany wouldn't be the greatest idea. They are not popular (good luck to find one). Where I live touchless machines are popular and after 5 years of struggle with a brush machine I just put a touchless in to give the customers what they want.

 

[a4wagon]

I am trying to . Basically this is for Romania and they dont have many automatic car wash systems. All is hand wash with very few in the large cities and probably it will be very hard to talk direct to the owners but I`ll try to talk to their employers and watch the traffic. They have a lot of cars in large cities with expensive cars and price wise for exterior and interior it`s very similar ti US from 4..5$.

One thing I know there some people might have the bad conception that the brush systems will scratch their car and they might like touchless more than the friction system. Weather it`s pretty good to allow this business somewhat similar to NY or even hotter for most of the year with 3-5 months of winter.

I like the idea of having a touchless system in there as they seem to be much cheaper than any small brand name tunnels. From my research I see new tunnels going from at least 150k+ for the whole thing where touchless are between 50-100k but much slower number per cars you can wash. I heard that they need a better/special detergent more expensive than the brush one and will essentially cost more per car. I also like the idea that customers cant really complain that your brushes are damaging their cars since they dont even touch them. I thinks a good new touchless system will eventually clean the car as great as the brush one so I might look at having those machines, but in the end I do care which one will cost me less to operate, maintenance and detergent, water etc.

 

[JustClean]

You have to find a distributor in Romania who can assist you if things go wrong. Washtec (world's largest car wash manufacturer) have a dealer in Bucharest.

>"customers cant really complain that your brushes are damaging their cars since they dont even touch them."<
Touchless machines need to use stronger chemicals to get the cars clean. This can potentially affect the paintwork.

>"a good new touchless system will eventually clean the car as great as the brush one"<
hmm...sometimes...maybe... The wash quality is mainly depended on the chemicals you can get over there and use.

>"some people might have the bad conception that the brush systems will scratch their car and they might like touchless more than the friction system."<
That's why you have to talk to different operators over there. There might be also other reasons why there are mostly hand car washes.

 

[robert roman]

In forming a venture, set aside things like equipment and operating cost which have nothing to do with business fundamentals and design business model to test the viability of the idea – a sanity test.

Business model consists of value proposition, market segment, value chain, revenue model, position in market and competitive advantage.

Value proposition is offer or solution to customer’s problems – motorists need to clean, shine and protect vehicles. You mentioned solving problems with automated tunnel and touch-less process.

Market segment is size/sustainability of market. Here, potential sales equal population in area multiplied by income ratio in area multiplied by per capita consumption of the good. If government collects tax on carwash, data should be available to make calculation. If not, estimate by making assumptions on number of possible buyers, average price and average quantity purchased per buyer.

Market is crucial because size and sustainability gives lenders an indication of your ability to service debt.

Value chain involves position in market and how you will capture part of value that you create in chain. You stated, “….don’t have many automatic car wash….. All is hand wash....very few in the large cities…..”

Full-service is not viable in Germany because labor rates are prohibitive. Hence, exterior-only tunnels (friction) dominate market. Touch-less is not popular because Germans are value-driven - they want a very clean vehicle for money.

So, you need to determine why all hand wash, few in city. Is it because labor is abundant and wage rates are incredibly low? Do Romanians prefer hand wash? Are there few reliable sources of equipment and service? Is it because building a wash in city is very expensive?

Hopefully, you will see there are many issues to resolve before moving forward to how revenue is generated, cost structure as well as other components of business model.

 

[a4wagon]

Thanks a lot guys for your inputs, all great ideas. I guess especially for the first time owner, support will be essential from some local distribuitor\supplier. I will look at washtech which is a great manufacture something similar to SOnnys' equipment.

I was trying to answer some questions about why they are not so many automatic car wash systems back there. First of the owners who have those manual car wash places usually they have another small shop for oil change and tire repair shop. I guess due to not being so popular they never looked at getting a machine like that and on top of that the investment it`s esentially preatty large at least 200-300k USD. There are many car wash places even in small cities like 100k -150k people and they are all busy with line ups and it`s very incovenient for customers to wait there 1 hour or something to get their car washed. Labour costs for interior cleaning is not very expensive. Land could be expensive depening on the area. City taxes and permis can be an issue on getting them for the first time but I think those can be worked out.

The most thing that kinda really scares me is the machine itself and support. If I can't find a local guy that will know those systems I really have to go work at some car wash for a bit to learn the system here in Canada and then probably take Sonny's college to help me understand the machine.

I don't want to get all things up and running and once the machine goes down or it doesnt wash properly or other glitches will ocur, I want to be able to fix it preatty fast. So yeah I think it might be wise to look at some German Equipment I am sure they must have a lot of good stuff as well.

Thanks again everyone. I`ll go there in the summer to do some more reasearch based on city permits and taxes as well as on trying to talk to owners from both sides the automatic and manual car washses and see what they say.

 

[smokun]

Consider This Option

You would be wise to find and investigate a manufacturer that you'd like to represent in the sales and supply of carwash equipment. Once done, use your initial location as a showplace that you own and control for future sales in the region. You'll probably be buying at a deep discount and the manufacturer will train you or your staff in maintenance & repair... and you will enjoy the best of both worlds. It also provides a built-in support system of immediate help.

It would be a win for you, a big win for the manufacturer and other collateral suppliers, and a win for your region. It positions you to know what's going on in development and possibly aligns yourself for future business association with others; potential partners or networks.

Whether you have the financial capability or need a like-minded investor, its a smart alternative to place yourself in a strategic position. Consider the sensible options & alternatives... and seize the opportunity!


— Steve

 

[a4wagon]

Very good idea. I am actually interested in representing a manufacture there and in the long run 3-5 years buy another .. 3-5 machines in difefernt cities. I have connections with a lot of business people in there that might be easily convinced to open 1 or 2 car wash systems in the capital city over 2 milion people in there with mostly very expensive german cars BMW, Benz and other. The capital city it`s mostly used for all businesse and money for a car wash is not an issue for most customers.

I think the most important thing for them other than getting a clean and dryied car is to be fast. Thats the thing in there missing that only automatic car washes can bring that.

Thanks a lot guys, this market is a bit complikated for someone with not so much knowlege into it but I am hopping in a year or 2 I can break in and be succefully in this. Sooner or later one day in Romania, coutry of 22 milion of people those systems will eventually apper and take off. and I want to be one really breaking the market if the city and other rules allows it to make it profitable.

 

[robert roman]

Whatever you decide to do, try learning what it takes to have great success in this business.

For example, if you would research articles containing comments from U.S. legacy owners such as Chuck Howard (Auto Bell Car Wash chain), the Dahm family (Mike’s Carwash chain), Victor Odermat (Brown Bear Car Wash chain) and others, they would tell you 80 percent of this business is how you treat customers, 20 percent is the machine and splash.

The more you hold the “machine” in high regard, the less chance you will have in succeeding in this business.

 

[a4wagon]

Great comments Roman and Steve. What profits in terms of % do owners usually get from the car washes after all the bills and operational costs. Like 50% of the price of car wash .. or less 20..30% ?

 

[robert roman]

Industry benchmarks for U.S. are available from International Carwash Association (www.carwash.org), Auto Laundry News magazine (www.carwashmag.com) and Professional Carwashing & Detailing magazine (www.carwash.com).

Some starting points for Europe would be to visit www.datamonitor.com, www.autobase.com (Chinese made equipment), Istobal International and WashTec – a corporation that now owns Mark VII. WashTec, publicly traded, is required to publish annual report. This report contains a fairly good overview of U.S. and International carwash markets.

 

[a4wagon]

guys you are amazing. Good info I`ll check some stats and I was looking for Autobase company. I am not sure how much I should trust thier quality it might be half price for a brand name like SOnny or others but if it stats giving problems in the end of the day in this business you need to wash cars non stop with as less problems as possible. If new tunnel option might be too expensive for a first one to start and kinda test I would probably go with some touchless options for the same money as the Chineze tunnel from laser 360 or washworld.

I could also buy some used tunnels from US that are running and go with those a a year or 2 just to see how makert likes it in there..

There are many options I can go with and ways. I am very happy to have a community like this where I can learn few things here and there which will essentially help me with this.

In the end I`ll have to talk to at least 5 or 8 Manufactures to see thier options, support , deals if becoming a local distibuitor then and then go with the best supplier that really wants me to succed and them to sell thier equipment in Ro.