Where did everyone and the interest go?

[copperglobe]

Been in the business now 30 years with SS and in-bay automatics. Spent several hours the other day driving around our market (maybe 100 miles x 25 miles area) to have a look at the car washes. All those owners that I once knew and spent time together are either dead, retired or have just given up. Pulling into those, at one time, beautiful car washes was really depressing. It's like they've just given up. Equipment vandalized, not working, dirty, run-down, looks like no employee/owner has been there for days if not weeks. One wash that was built at a cost of 1.3 million in 1991 is now a joke with vacs not working, half the bays closed, the automatic closed. Many washes are now used car lots, converted stip malls or just empty shells; closed for business. It's depressing realizing what a vibrant and exciting market it used to be and the great people that were involved- now all gone.

 

[soapy]

I think the SS market got overbuilt in the 1990s and 2000s. They were great for a while and everyone got in. Now the express wash has taken over and they are being over built by people who believe equipment companies. Many expresses are now going broke due to over saturation. In my market we have double the number of expresses that can be supported by the population. It will take a few years but many of them will start to turn over due to lack of profits. The niche for the SS market is shrinking but I do think it will stabilize for the better ones still in business. Another problem with the SS market is that people are just plain lazier than they used to be. Look at all the fast food places that have a hard time getting anyone willing to work, even teenagers. Teenagers used to be a primary customer of the SS business but car pride has fallen off on the younger generation. I was watching the Grand tour last week and in Great Britain driving license applications are only 25% of what they were just 10 years ago.

 

[rph9168]

I agree with Soapy. I think the SS market is already beginning to stabilize in some areas. It maintains its presence in rural areas and to a lesser extent in suburbs. Gradually as some of the "dumps" are leveled in urban areas it will maintain a much smaller presence than it once had. I think EE's are much more of a threat to automatics and to a lesser extent full/flex serves. In Atlanta many of the EE's are priced the same or even lower than automatics and offer free vacs. The industry as a whole is evolving from its past position in the marketplace. While more people are using car washes, it has become something of a commodity rather than a specialty where people accept that they either can't or don't want to wash their vehicle themselves so they price shop where they feel they get the best bang for their buck.

 

[Randy]

We’ve noticed to same thing over the last few years. Car washes that were once a show palace, well maintained, clean are now run down or closed eyesores. We’ve seen a lot of operators come and go over the years, most get into the business thinking that it’s an easy way to make there fortune only to learn that the riches aren’t there and that it takes a lot of hands on work to be successful. Up here in the PNW it’s almost impossible to build a S/S carwash, the land costs and the development fees are so high that it makes building a car wash unfeasible. As the car washes become run down the crime element shows up, break ins, drug deals, dumping or just hanging out, this activity drives away to customers who want to wash their car because they are afraid to get out of their car, so business and revenues decline. Then you get these people who buy into a car wash thinking that they are going to turn the place around and they spend 10’s of thousands of dollars rehabbing the car wash, make it into a beautiful facility, only to have it trashed, so they slowly lose interest in it and it becomes just another run down eyesore in the city, most cities don’t want car washes for this reason. I’d love to sell my car wash but the land value is so high that it is no longer feasible to have a car wash on the property.

 

[copperglobe]

It's definitely happening in our area. It's like owners are just tired and don't have the longevity, stick-to-it that existed for us "old timers" in years gone by. This business definitely takes hours and hours each week on site to keep things running smoothly. It's quite obvious that the venders have moved into the EE, tunnels and super expensive equipment packages and away from the SS and IBA types. In one of our towns there was one long tunnel for many years. That owner made good money and was always busy; he ran/runs a good wash. Now, in that same town, there is another new tunnel that just opened and two more under construction. So now all four tunnels will be competing for cars that just aren't there; not enough population base. They'll all slowly wear down. In this same town there are only two SS washes and neither one are really busy which tells me that customers are going to the tunnels and spending big dollars each time to wash where they used to spend quarters at the SS washes. Maybe Randy you're right; folks just aren't washing like they used to year ago. They drive dirty cars longer between washing. I guess it just got me down when I was driving around and saw the state of those once nice locations and washes.

 

[rph9168]

It is not only the car wash business that has retreated from inner cities and rough neighborhoods. The decay of cities has created nightmares in big cities like Detroit and Chicago. I also agree that many have gotten into the industry with the "build it and they will come" syndrome and found out that was not true. Part of the blame also goes to some manufacturers and distributors that fed this "beast" with dreams of high profits and in some cases fallacious pro formas and success stories. They sold their equipment and ran and in some cases sold washes in close vicinity with the excuse that someone had to sell another wash.

I would disagree that the customer base and frequency has significantly declined. There are simply more options for customers to choose from due somewhat to the overbuilding previously mentioned. Ultimately the challenge of being successful lies in making good decisions with placement of the wash, reasonable building and maintenance, good management and well conceived marketing. If all that sounds familiar it applies to most successful business ventures. The real victims are those operators that built and operated a good wash but saw either their neighborhoods decay or competitive washes built too close to their wash. Unfortunately it makes it difficult for them to survive and remain profitable. The real decision then is to sell if possible or stand and fight to exist in a changing environment. That is really only a decision the operator can make for themselves based on their personal and professional needs. I don't envy that decision but it is one that has to be made based on the reality of their situation and not false hopes or bad information.

 

[Ric]

Been in the business now 30 years with SS and in-bay automatics. Spent several hours the other day driving around our market (maybe 100 miles x 25 miles area) to have a look at the car washes. All those owners that I once knew and spent time together are either dead, retired or have just given up. Pulling into those, at one time, beautiful car washes was really depressing. It's like they've just given up. Equipment vandalized, not working, dirty, run-down, looks like no employee/owner has been there for days if not weeks. One wash that was built at a cost of 1.3 million in 1991 is now a joke with vacs not working, half the bays closed, the automatic closed. Many washes are now used car lots, converted stip malls or just empty shells; closed for business. It's depressing realizing what a vibrant and exciting market it used to be and the great people that were involved- now all gone.

Where are you located?

 

[mac]

I've been noticing the same thing. The current washes seem to be falling into two types. Those that are still in top shape and doing quite well, and then the rest. There's a lot of junk ones for sale down here.

 

[robert roman]

In my opinion, self-service began its decline with economic recession in early 2000’s. Several years later there was spiking gas prices then came collapse of financial markets then real estate bubble burst. Next, was major economic recession.

Adverse impacts from all of this hurt those most who could afford it least, and a great many of those lower income folks were potential self-serve customers.

There has also been demographic shift. Boomers getting older not wanting DIY and Millennials prefer rideshare over car ownership.

Moreover, a significant portion of the total available market has been gobbled up by conveyor segment, principally exterior express.

What’s depressing is lack of entrepreneurial spirit of owners.

Instead of trying to stay current with industry or innovate like Waxman, they ignore the business, suck it dry and dump it.

I should know because I’ve worked with such owners to help them get into the business.

Obviously, there is big difference between carwash operator like yourself and landlord.

Otherwise, I suspect someone would be driving by your place thinking the same thing.

 

[Greg Pack]

I've been in the SS business since 1993. I witnessed the overbuilding which seemed to peak around here in the early 2000s. Around 2003 or so the first express was built in the area and I saw the success it was having. Over the next few years the expresses began to pop up everywhere as investors from outside the industry began to focus on that model. By around 2006 I could see the SSs really taking a hit and floundering or shutting down. Years ago I told several people I felt like it was 1970 and I was in the drive in movie theater business.

As to the point of youth being different, I agree. They are much more enamored by their phone than their car. I can't tell you how many times I've seen a parent bring their child in the wash and make them wash their car. The child is usually completely disinterested and behave like it is a real chore like cutting the grass. Most just don't care about their car's appearance. Sure, there are a few young car guys still out there, but I think it is a much smaller percentage than it was before the tech boom.

I think the SS industry as a whole will continue further decline and closings in some areas until the market has stabilized. My guess is at about half the SSs have closed down or been razed and converted to express. Of the half that remain, most are grossing a fraction of what they were at the peak. When something just cash flows year after year and doesn't provide any real income, it's easy to lose interest. I have survived and actually done pretty good, but I attribute that to massive attrition in my market. Some people are driving 20-30 minutes to get to my wash because all the others near them have closed down. And there are still customers that will drive a ways to me for a touch free wash. I now have the highest grossing SS/IBA wash in my metro area, but thats like I'm bragging about being the tallest midget. I still run a good wash IMHO, but that enthusiasm and drive I once had died about ten years ago. I still stop by here a couple of times a week, but I don't camp out on here like I used to. My hat tip to you guys like Soapy that have stayed engaged.

 

[soapy]

I was called to visit a site yesterday about 40 miles from me. This was a 4 ss 2 bay auto that was built in 2009 with EXTRUDtech form walls.. It was built with no expense spared. 2 Laser G5 touchless with Proto vest dryers. 4 bays of Ginsan premium equipment. 2 PDQ pay stations and 2 standard coin changers.2 Lochnivar boilers totaling 1.5 million Btus. Large site on a good road with good access. It went into bankruptcy about 2 years ago with 1.2 million dollars still left on the loan. It was purchased by a investor to be tore down as it never made any money. All the equipment is going to be scraped. If anyone wants to purchase any of this equipment let me know and I will put you in touch with the current owner. I am not taking any commission so I am not soliciting any business here. Just hoping to pass on a good deal to anyone who may be interested. You will need to act fast since he plans on tearing it down soon. I would say very low wash count on the G5s. I will also list this in the classified section.