SIC 7542 Carwashes

SIC 7542

This category covers establishments primarily engaged in washing, waxing, and polishing motor vehicles (including automobiles, trucks, and buses), or in furnishing facilities for the self-service washing of such vehicles.

NAICS CODE(S)

811192

Car Washes

INDUSTRY SNAPSHOT

An estimated 97 percent of Americans take their automobiles to commercial carwashes. In 1998 the International Car Wash Association estimated that there were 9,570 full-service carwashes in North America, approximately 4,546 exterior-only carwashes, nearly 30,000 self-service carwashes, and about 30,000 rollover/high pressure washes, the majority of these being affiliated with gas stations or convenience stores. Together these carwashes generated more than $14 billion in annual revenue.

The carwash industry grew rapidly from 1977 to 1987, but its growth began to slow in the decade following 1987. In 1977 there were 5,785 carwash establishments nationwide classified in SIC 7542. It was a business oriented to small-scale proprietors: these establishments were owned by 5,290 firms, of which 5,091 operated only one carwash. Approximately 45 percent were incorporated, another 42 percent owned by individual proprietors, and just 3 percent by partnerships. The total receipts for carwash establishments nationwide came to $668.6 million in 1997. Forty-two out of 5,290 carwash firms and 243 out of 5,785 carwash establishments reported annual receipts of $1 million or more.

Just ten years later, there were 9,132 commercial carwash establishments nationwide, an increase of almost 60 percent. The proportion of incorporated establishments had risen to just over 50 percent (but still a low figure for the service industries as a whole, in which 60 percent of all establishments were incorporated). The number of sole proprietors had dropped to 37 percent (compared to 32 percent for all service industries), and partnerships had jumped to almost 13 percent, nearly double the overall service industry figure of 7.3 percent. The total national revenues for the carwash sector had reached $1.8 billion, with California and Texas together representing more than one-quarter of nationwide revenue. Nationally, the average revenues per establishment were just over $197,000 a year (only 34% of the average for the service industry as a whole.) But because carwashes tended to be less labor-intensive than many other service industries, average revenues per employee for carwash establishments ($23,534) were slightly more than 50 percent of the service industry average.

In 1992 the number of carwash establishments in the nation had risen to 11,589, an increase of 27 percent. This indicated a slight leveling off in the rate of increase compared to the 1977 to 1987 period. The proportion of incorporated establishments had increased to 56 percent while the service industry average remained at 60 percent; individual proprietorships had dropped another two points, to 35 percent (slightly more than the service industry average), and partnerships accounted for only 9 percent. California remained the leading state in the nation (1,408 establishments), followed by Texas and New York. National revenues had increased by 47 percent to $2.64 billion, or $228,158 per establishment. However, this was still only about 35 percent of the service industry average. Revenues per employee had increased by 21 percent, to $28,407; a mere 46 percent of the industry average.

The carwash industry is heavily affected by such issues as weather, climate, and time of day. A May 1996 survey conducted by Auto Laundry News reported that Saturday was overwhelmingly the best day for business, with an 82 percent vote. February, with 19 percent, was chosen the best month of the year, and November (0.5 percent) the worst. Not only did carwash owners have a favorite season (winter, with more than half the votes, as opposed to fall, with only 3 percent), they even had a favorite time of day. Just over 40 percent of respondents said the majority of their business was conducted between 1:00 and 3:00 p.m.

ORGANIZATION AND STRUCTURE

The carwash segment...