Overview of the Automotive Franchise Industry in 2017
More and more cars plow through millions of miles along the world’s roadways. People expect the automotive franchise industry to reach a global value of more than US$ 720 billion in the year 2020.
United States calculated that the after-sales market in 2017 was more than US$270 billion. With an average age of 11.5 years, the fleet of older cars that demand after-market service continues to rise. Moreover, about 88 million new motor vehicles were sold in 2016 globally.
All of these figures point to one thing. This is that the automotive franchise industry will continue to be ripe with opportunities for growth and profit in the near future.
Automotive Franchise Industry: Trends and Statistics
Associations estimated that the global car rental/leasing market will reach a value of anywhere between US$ 99-125 billion. Moreover, with growth from 2017 through 2022 with a CAGR anywhere from 5-13%. They attribute this rapid growth to an increased volume in international travels, as well as local tourism. In recent years the car rental market is not only the traditional “rent-a-car” but has also seen the expanding market for entities such as “party buses” increasingly sought out for weddings, proms, birthdays and other momentous occasions.
Automotive Parts Sales and Service
The growing fleet of aging motor vehicles means that those vehicles will need more maintenance, repair, and replacement of parts. In the United States, the after-market repair and maintenance costs were pegged at US$64 billion. However, the curiosity is that only about 25% of those repair and maintenance services were performed by automotive dealers; the remaining 75% were done by independent auto repair shops. Owners of older cars fully expected their vehicles to need more maintenance and repair, and even expect to pay upwards of US$1,000 for their annual maintenance costs.
On the other hand, owners of newer cars were more concerned with the appearance of their car. Moreover, they are more likely to buy “appearance products”, like wax, glass cleaners, and tire enhancers.
With the rising trend in the rental of “party vehicles”, the market for automotive parts and services is now confined to traditional automobile parts. Additionally, there are several other components that drive the “party vehicles”, such as multimedia entertainment systems, lights, and even mobile bar technologies.
Car Wash and Car Detailing
The car wash industry has seen a very rapid growth for the last several years and is expected to continue growing up to 2021. In 2016, the industry saw its revenue shoot up to US$ 10.2 billion. Experts have estimated net profits at US$ 1.9 billion. As of 2017, they have also estimated that commercial car wash establishments have washed more than 8 million cars daily.
The increase in disposable income, as well as the increase is speed and pace of daily life, most car owners see their cars not just as means to get around. They see it as indispensable to their everyday function and even income generation. Commercial car wash generally takes less time than washing cars at home. This is because full-service and flex-serve car washes are starting to offer customers a lounge where they can keep on working while the worker spruces up the car. This makes it no surprise that 81% of Europeans and 66% of Americans prefer commercial car washes to do the dirty work rather than personally wash their cars9.
Most car wash establishments in the United States are owned by small businesses. Most of them are with a few shops in close proximity. Or owners who run just one or two shops that seek to serve the immediate community.
However, with the increasing influence of online marketing, as well as the increased volume of travel (whether due to business or leisure), car wash establishments may be seeing a rise in “transient” customers. But they do not necessarily own the cars they drive. Instead they are actually renting these cars for longer period of time. It is then becoming increasingly important for car wash owners to create (or improve) the online presence of their brand.
Ask the Xperts
The trends in the automotive franchise industry are clearly on the rise. Because of this choosing which market to venture into can seem rather daunting, especially for enthusiastic first-time entrepreneurs. However, partnering with experienced hands and minds can make the experience not just a breeze, but an enjoyable one.
DetailXPerts has over a decade of innovative experience. This is in the arena of the traditional commercial car wash. Moreover, its patent-pending steam-cleaning technology is also a new invention.
You’re looking for a car wash franchise that is profitable, eco-friendly and has solid customer support? You want a franchisee support services from initial research and planning? And these to be available to you all the way to continuing innovation and improvement, check out our franchise opportunities today!