The Wonderful World of Washing
Representatives from Australia, Canada and Greece speak about the state of the industry abroad, up north and down under
by Lacey Nadeau
Carwash Down Under
When Diane Ross started her carwash in March 2000, she thought it would be “an easy retirement business.” That was before Australia’s water crisis.
She owns Green ’n Clean, a carwash in suburban Melbourne, a residential area that provides the opportunity for her wash to become part of the community’s weekly habit.
After opening her wash, she started working in 2000 as treasurer for the Australian Car Wash Association (ACWA) to learn more about the industry. Soon after, a drought resulted in water restrictions that did not favor the carwash industry. The association’s Water Strategy subcommittee went to work quickly – not just to save washes from the water authorities’ restrictions, but to repair carwashing’s image in the eyes of the public.
Water restrictions pose a large challenge to the carwash industry in Australia, and set it apart from the industry in other countries. Australian carwashing is also a young industry, which means there are relatively few tunnel washes in the commonwealth. But there are similarities between Australian washing and American washing.
“Most of our equipment comes from the United States, and we follow the major trends and initiatives from there,” Ross says. “Twenty or more carwash owners go over to the International Carwash Association convention each year.”
The industry developed first in the late 1980s in Victoria, a small but densely populated southeastern state. The types of operations you find in the states of New South Wales, Queensland and Victoria differ. “Eightyfive percent of the industry is in these three eastern seaboard states, with just a few in South Australia, Western Australia and Darwin,” Ross says. “Roughly 38 percent is self-serve only; 32 percent is self-serve and automatic; 19 percent is brush-only [owned by oil companies]; and 11 percent is hand washes.”
Ross plans to expand and eventually own three washes. But for now, she has her hands full with Green ’n Clean and the Water Strategy Committee. For more on the industry’s struggles with water restrictions, see page 38.
O Canada
“We have everything except rollover carwashes,” says Mike Black. These rollover, inbay automatics are prevalent in Canada, but you won’t find them at an independent wash. You’ll find them at a gas station, owned by Canadian oil companies, who – unlike in the United States – dominate the country’s carwash market. Canada is home to more than 3,000 carwashes, and the major oil companies represent about 70 percent of the market, says Vito Cosentino, president of the Canadian Carwash Association (CCA) and president of Wash ‘N Go in Toronto.
“It’s very difficult for an independent to compete with that,” Black says. “I mean, we can’t do it faster, we can’t do it cheaper, we really can’t do it better.”
That might be true for in-bay automatics, but when it comes to all other forms of carwashes, Black has found a way to do tunnel washing “faster, better, cheaper.” Those three words are the motto of Valet Car Wash, which has found success by being able to adapt and innovate.
“What we’ve tried to do is really distinguish ourselves with our operations,” Black says. “We don’t really invent anything; we try to find what people are doing out there and make it better.” Black and his team have been known as a sort of carwash pioneer in Canada, having brought the first flex-serve wash to the country about five years ago. “We started to find that the full-service model just wasn’t working anymore,” he says. And in July 2006, they built the first true express exterior carwash in Canada.
Black, a former ICA president, was also the president of CCA for four years, and currently sits on the board. In his experience, the United States is a friendlier place for independents.
“We basically have five major banks and they’re not too interested in lending money for carwash development,” Black says. “The United States is geared a lot more to that type of entrepreneurship.”
Finding the proper-sized location in an urban area can prove a challenge as well, says Cosentino, who is also a design and building consultant to the carwash industry. “Even if you have found the perfect location, the cost of the land may be too prohibitive,” he acknowledges. “A corner, one-acre lot in Toronto, Calgary or Vancouver can easily cost over $1 million.”
One difference between the North American markets is the attitude of the consumer.
“Typically, the American consumer has a lot more pride in keeping a clean car,” he explains. “Carwashing up here is not a top-of-the-mind thing for the consumer. The car is treated more as transportation than an object that represents you.”
But Canadian wash owners see gross revenues and profit margins that are higher than in the United States, Cosentino adds. “There is not the intense price competition that many U.S. markets have.”
And the future looks good for Canada’s independents. Alternative finance mechanisms will start to develop, Black estimates. This means the country will see more independent washes, and then, naturally, some type of consolidation. The big regional chains common in the United States will become more common in Canada, he says. In fact, Black and his team are in the process of branding their business right now.
And what about the effect of high gas prices on consumer trends? It should actually contribute to pushing the market toward independents, according to Black.
“There is a reluctance happening on consumers – sort of a backlash against the oil companies,” he says. The independent wash, fortunately, is separated from that backlash.
Cosentino marvels at how dynamic this industry is in Canada. “There is a very big change happening where the old carwash operator is being severely challenged by new blood in the industry.”
Black, who built his first wash in 1991, is looking forward to the future. Until then, it’s a great industry with which to be along for the ride.
“One of the things that has always surprised me is carwash people in general,” Black shares. “They [hold expos] to share information and to help one another – you don’t see that in a lot of other industries. I can probably go to almost any major city in [the United States] and phone somebody up and tell them where I’m from and tell them that I’d like to see their carwashes. And I almost always get a welcome mat. They’re just really hardworking, humble people.”
Elbow Greece
“We could honestly say that this is an American-style carwash establishment,” says Georgia Mavroudis, who 10 years ago began thinking of opening a wash with her husband Paul when they saw how prevalent vehicles were becoming in their area. “We observed whoever wanted to wash their cars went to their local gas stations where they had the classic European rollover, gantry-type carwash, which was time consuming and was not offering the services that American-type carwash tunnels offer.”
Auto Hand Car Wash is the first carwash to use Lamms-cloth material, Georgia says. “Our repeat-customers love it, as they feel that their cars are being washed with the safest material in the market.”
She and her husband have installed carwashes in various parts of Greece, and are in the process of expanding further. Building carwashes in Greece is a very difficult process, Georgia explains. A lot of time is wasted with bureaucracy – waiting for various agencies to approve applications.
“One of the problems with building carwashes in the greater Athens area is that carwash tunnels need space,” Georgia says. And that space is hard to find.
Still, a scarcity of space doesn’t stop competition. “Through the years, there is an increasing expansion of American-type carwashes,” Georgia explains. “Competitive American carwash companies have also installed their carwash tunnels in Greece.”
Throughout Europe, you find a serious interest in American carwash tunnels, Georgia says, and Greece is no exception. This has only increased as time goes by. “Even though there is a more laid-back kind of lifestyle here, people are always in a hurry to wash their cars and go on their way.”
Australian Carwash Industry Tries To Keep Its Head Above Water
“This is very much a particularly bad year with the whole of Victoria, the whole of South Australia, the ACT [Australian Capital Territory], regional New South Wales and Southeast Queensland – all of which are either in severe restrictions or have an imminent threat of restrictions,” says Diane Ross, a representative of the Australian Car Wash Association (ACWA) Water Strategy Committee.
Although carwashes only account for 0.25 percent of all industrial water use in Australia, the carwash industry has seen some of the most threatening restrictions. Government restrictions were developed to range from Stage 1 to Stage 5, though they vary from state to state.
“They were not well-written for the carwash industry,” says Ross, who explains that the water authorities were focusing too much on the goal of recycling, rather than on water efficiency. She points to the fact that home carwashing uses an average of 26 gallons of water or more, while self-serve bays only use about 13 to 18 gallons. “The message was, ‘Self-regulate or be regulated.’”
The ACWA decided to self-regulate. It rated washes using a star system, with the most efficient washes receiving a five-star rating. ACWA allows a maximum of 26.4 gallons of potable water to be used for a commercial carwash of any kind. The rating system has led many washes to implement water-conservation measures, and Ross expects the water rating scheme to be a normal part of the initial licensing process for all carwashes in the future.
“The pressures from water restrictions have lifted the industry to another level of professionalism with a much stronger public profile and pride in our position of upholding long-term environmentally sustainable levels of water use,” she says.
Unfortunately, the industry has not seen as much leniency from local governments as organizers had hoped for. In March 2007, operators received a blow when regulators failed to lift Level 4 restrictions throughout much of Victoria. This means the carwashes have to find alternative supplies of water – mostly from underground artesian water.
“It is more expensive, but not difficult, for small, regional washes to find alternative water supplies,” Ross explains. “However, logistically, this is not an option in the major cities.”