Analysis of the car wash market in India

The relevance of research

The car wash market in this study is understood as a set of car wash enterprises that form the market supply, the number of car owners that form the market demand. Car wash - a device for washing cars, as well as an enterprise that cleans cars and provides related services

Purpose of the study

Analysis of the state of the car wash market, assessment of the market size, analysis of competitors, as well as identification of factors affecting the car wash market

Content

Part 1. Overview of the Indian car wash market
1.1. Definition and Characteristics of the Indian Car Wash Market
1.2. Dynamics of the volume of the Indian car wash market, 2014-2018
1.3. Market structure by type of service provided in India
1.4. Structure of the car wash market by Union Territories
1.5. Assessment of current trends and development prospects of the studied market
1.6. Assessment of factors affecting the market
1.7. Analysis of sectoral indicators of financial and economic activity
Part 2: Competitive Analysis in the Indian Car Wash Market
2.1. Major players in the market
2.2. Market shares of the largest competitors
2.3. Profiles of major players
Part 3. Car Wash Consumption Analysis
3.1. Estimated per capita consumption of car washes
3.2. Market Saturation and Estimated Market Potential in India
3.3. Description of consumer preferences
3.4. Price analysis
Part 4. Assessment of factors of investment attractiveness of the market
Part 5. Forecast for the development of the car wash market until 2023
Part 6. Conclusions on the prospects of creating enterprises in the study area and recommendations for current market operators

Research excerpt

Part 1. Overview of the Indian car wash market 
1.1. Definition and Characteristics of the Indian Car Wash Market
The car wash market in this study refers to the totality of car washes that form the supply of the market, the number of car owners that form the demand of the market, as well as the relationship that arises between sellers and consumers of car wash services and additional services within the geographical limits of India.
Car wash - a device for washing cars, as well as an enterprise that cleans cars and provides related services (cleaning the car interior, etc.). Often, car washes are located at gas stations or near auto shops and car service stations. There are self-service car washes, usually automatic, as well as car washes where car operations are carried out by service personnel.
Car washes can be manual, portal, tunnel, conveyor, etc. Recently, such subspecies of car washes as steam washing, dry washing, mobile car washing have appeared. According to the method of removing dirt, washes are divided into contact (when the mechanical removal of dirt from the surface of the car occurs using brushes, rags, sponges, etc., as well as using chemical detergents) and non-contact (in this case, the removal of dirt is carried out using strong surfactants and powerful high-pressure water jets). A comparative analysis of the types of sinks is presented in Table 1.
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The described advantages and disadvantages of car wash types form the current structure of the car wash market, which is presented in paragraph 1.3 of this study.  
Consider the characteristics and features of car washes in the Indian market:
...

1.2. Dynamics of the volume of the Indian car wash market, 2014-2018
According to GidMarket, based on data on the volume and dynamics of the car fleet in India in 2014-2018, the average cost of one car wash service, the average frequency of car washes per year, the volume of the car wash services market in India in 2018 amounted to … billion Rs . 
...
Diagram 1. Dynamics of the car wash market volume, 2014-2018, forecast for 2019, billion Rs.

GidMarket analysts expect…

1.3. Market structure by type of service provided in India
Typical car wash services include:
body wash;
rinsing;
body polishing (manual);
glass washing separately;
glass treatment with anti-rain preparation;
glass treatment with anti-fogging agent;
washing rugs (separately);
interior vacuum cleaner (separately);
wiping plastic (separately);
complex interior cleaning: interior vacuum cleaner, glass washing, plastic wiping, trunk cleaning;
interior dry cleaning;
trunk cleaning (separately);
engine wash;
disk cleaning;
removal of anticorrosive, bituminous stains.
In addition, the cost of washing depends on the class and size of the car (sedan, SUV, minibus, etc.).
...
Thus, services based on the use of new technologies include:
 NANO-sink. 
Salon ozonation. 
...
Deep cleaning of car paint. 
...
Artificially created services:
...
Diagram 3. The structure of the car wash services market by the applied technology

A new market trend is the development of the self-service car wash segment. Currently, in Europe, more than ... all car washes are self-service complexes. 

1.4. Structure of the car wash market by Union Territories
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Table 2. Share of the Capital Region in the Indian Car Wash Market, 2014-2018, 2019 Ave, %

1.5. Assessment of current trends and development prospects of the studied market 
Key car wash market trends include:
...
The trends described above allow us to conclude that the development of the car wash services market will largely depend on the further economic situation in the country as a whole: the rate of GDP, industrial production, the rate of real incomes of the population, the level of inflation, etc. 
...

1.6. Assessment of factors affecting the market
Consider the main factors affecting the market and, accordingly, demand.
Economic
Dynamics of India's GDP
As shown in Chart 5, for the period 2013-2014. observed...
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Table 3. Consumer price index for cold water supply, 2014-2018, %

 India Vehicle Fleet
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Dynamics of new car sales in India
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Dynamics of state lending to small and medium enterprises
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The main reason for the upward trend in the lending market for small and medium-sized businesses is the decrease in interest rates on loans for this category of enterprises. 
...
Demographic factors
...
Real disposable money income
Real disposable money income per capita is income minus mandatory payments, adjusted for inflation. This factor determines the level of effective demand of buyers, is one of the key reasons for the formation of the dynamics of both retail turnover and demand for services.
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Formation of a culture of using car washes
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Increasing urbanization
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Technological factors
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Environmental factors
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Political and legal factors
Due to the limited available building space, especially in large cities, and the complexity of further processing of legal documents and obtaining approvals for the construction of a car wash, the implementation of large-scale projects turns out to be more economically profitable. 
Article 12 of the Federal Law of May 04.05.2011, 99 N 15.04.2019-FZ ""On Licensing Certain Types of Activities"" (as amended on April , ) enshrines the list of activities for which licenses are required. Carrying out the washing of vehicles and special equipment is not included in this list, therefore, a license is not required to engage in the relevant activities. It also does not require mandatory certification of services.
However, there is a need to obtain other permits for engaging in this type of activity. To do this, it is necessary to draw up a project for a future sink. The specified project is subject to verification by the relevant authorities for compliance with the current sanitary-epidemiological, fire, environmental and other standards.
Tax preferences, concessional lending
In India, programs are being implemented to support entrepreneurship and develop domestic production. However, for ordinary entrepreneurs, their availability remains in question. 
Table 5. STEP analysis of factors affecting the car wash market

According to the results of the performed STEEP analysis, macro-environmental factors have an impact on the car wash services market …
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1.7. Analysis of sectoral indicators of financial and economic activity 
According to GidMarket, the gross profit in the car wash service sector in India in 2018 amounted to … billion Rs., 
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Based on the results of 2018, the profitability before tax in the car wash industry amounted to … 
...
Chart 13. Business activity (average receivables turnover period) in car washes, for 2014-2018, days days
For the analyzed period, indicators of financial stability (security of own working capital) in the industry of car wash services …
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Part 2: Competitive Analysis in the Indian Car Wash Market
2.1. Major players in the market 
The market for car wash services is extremely fragmented. Car wash services - a market represented by a large number of individual entrepreneurs, small businesses.
Due to the fact that the market coverage of one car wash is somehow limited by certain geographic boundaries, the largest market operators include federal networks of car washes. Since car wash services are often related services at gas stations, car services, tire services, the largest trade marks (brands) on the market are car washes that are part of federal networks of car service complexes. 
...

2.2. Market shares of the largest competitors 
According to GidMarket, based on data on companies' revenue in 2018, the number of car washes in the network and the average revenue per car wash in India, the leader in the car wash services market is the car wash network …
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2.3. Profiles of major players 
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Diagram 16. Dynamics of the total revenue of the largest car wash market operators (TOP-5) in India, 2014-2018

Part 3. Car Wash Consumption Analysis
3.1. Estimated per capita consumption of car washes 
Estimation of the volume of consumption of car wash services per unit of the total car fleet was made by GidMarket based on the ratio of the volume of the Indian market of car wash services to the number of the total car fleet.
...

3.2. Market Saturation and Estimated Market Potential in India 
The market potential of car washes is estimated by GidMarket experts in India to be no less than …
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Additional ways to develop the market for car washes and increase the average check is to develop and offer a range of services at a special price. 
...

3.3. Description of consumer preferences 
As before, consumers of car washes services can be divided into two large groups: for one group, the main thing is to maintain a moderate price with sufficient quality of washing performance, for the second, the most important is the high quality of the service, while at the same time attentive and careful attitude to the car, the presence of a comfortable waiting area, while In this case, the price factor fades into the background. The consumer is willing to pay more for a comprehensive high quality service.
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As shown in the diagram below, among the users of traditional car washes, the list of selection criteria is expanding - consumers pay attention not only to the quality of the service, but also to the waiting time, the availability of discounts for regular customers, promotions, and the breadth of the range of services.
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No matter how clean and tidy the room itself is, the sign is beautiful, and the uniform of the staff is perfectly clean, if the client encounters rudeness, the exceptionally low quality of the service provided, then all other factors lose their attractiveness. As a result of the foregoing, a systemic control of the interaction of personnel with customers is required - whether it be personal presence, recording video surveillance cameras or holding a ""mystery shopper"".
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Separately, visitors to self-service car washes emphasize the importance of the stability of the self-service car wash - so that from month to month there is serviceable equipment, consistently good water pressure, the quality of car chemicals, etc.

3.4. Price analysis 
The dynamics of prices for car washes services is due to the general level of consumer inflation, the growth of labor costs, exchange rates, the growth of tariffs for water supply, the increase in prices for auto chemical goods and auto cosmetics. 
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As noted earlier, the slower growth in the consumer price of car wash services is driven by increased levels of competition coupled with a reduction in the consumption of ancillary car wash services or the frequency of visits by consumers.
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Part 4. Assessment of factors of investment attractiveness of the market
The most significant negative factors. 
...
The most significant positive factors. 
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Part 5. Forecast for the development of the car wash market until 2023 
We will carry out a market forecast based on methods based on identifying trends over time, adjusted for expert opinion in the industry.
The following factors make it possible to predict the dynamics of the car wash market volume:
...
Forecast of car wash market size in India compiled by GidMarket for the period 2019-2023. takes into account the trend of car wash market size in India in 2014-2018. and predictive impact on the level of demand of key macro factors. 
...

Part 6. Conclusions on the prospects of creating enterprises in the study area and recommendations for current market operators
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GidMarket analysts expect that by the end of 2019, the volume of the car wash services market will amount to … billion Rs.
In the geographical structure of the car wash market in India, distinctive features are characterized by …
Key trends in the car wash market include the following. …
...

Diagrams

Diagram 1. Dynamics of the car wash market volume, 2014-2018, forecast for 2019, billion Rs.
Diagram 2. Structure of the car wash market by type of service, %
Diagram 3. The structure of the car wash services market by the technology used
Diagram 4. Structure of the car wash market by Union Territories, %
Diagram 5. Dynamics of India's GDP, 2013-2018, H1 2019, % to the previous year
Diagram 6. Monthly dynamics of the US dollar against the rupee, 2014-Oct. 2019, Rs. for 1 US dollar
Diagram 7. Dynamics of sales of new cars in India, 2013-2018, 9 months 2019, thousand pieces
Diagram 8. State SME Lending Trend in India, 2013-2018
Diagram 9. Population change in India, 2010-2019
Diagram 10. Dynamics of real money income of the population of India, 2013 - 2018, 1st half. 2019
Diagram 11. Profitability before tax (profit of the reporting period) in the field of car washes in comparison with all sectors of the Indian economy, 2014-2018, %
Diagram 12. Current liquidity (total coverage) in the car wash industry for 2014-2018, times
Diagram 13. Business activity (average receivables turnover period) in car washes, 2014-2018, days days
Diagram 14. Financial stability (security of own working capital) in the field of car washes, in comparison with all sectors of the Indian economy, 2014-2018, %
Diagram 15. Shares of the largest competitors in the car wash market in 2018
Diagram 16. Dynamics of the total revenue of the largest car wash market operators (TOP-5) in India, 2014-2018
Diagram 17. Volume of consumption of car wash services in India per vehicle unit, 2014-2018, 2019 (forecast), Rs./one vehicle per year
Diagram 18. Importance of consumer choice criteria – traditional car washes, scores
Diagram 19. Importance of consumer choice criteria – self-service car washes, points
Diagram 20. Car Wash Market Size Forecast, 2019-2023

Tables 

Table 1. Comparative analysis of types of car washes
Table 2. Capital Region Share of Indian Car Wash Market, 2014-2018, 2019 Ave, %
Table 3. Consumer price index for cold water supply, 2014-2018, %
Table 4. Automotive fleet of India, 2014-2019, million units
Table 5. STEEP analysis of factors affecting the car wash market
Table 6. Profit from the sale of car wash services in the Union Territories of India, 2014-2018, million Rs.
Table 7. Profitability of sales of the car wash industry in comparison with all sectors of the Indian economy, 2014-2018, %
Table 8. Absolute liquidity of the car wash industry compared to all sectors of the Indian economy, 2014-2018, times
Table 9. The main companies participating in the car wash market in 2018
Table 10. Basic information about the participant No. 1 of the car wash market
Table 11. Basic information about the participant No. 2 of the car wash market
Table 12. Basic information about the participant No. 3 of the car wash market
Table 13. Basic information about participant No. 4 of the car wash market
Table 14. Basic information about the participant No. 5 of the car wash market
Table 15. Basic information about the participant No. 6 of the car wash market
Table 16. Basic information about the participant No. 7 of the car wash market
Table 17. Consumer price indices for car washes in India in 2014-January-September 2019, %
Table 18. Average prices for car washes in the Union Territories
Table 19. Assessment of factors of investment attractiveness of the car wash market