Car Washing Business: How to Start a Car Wash Business in India

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As long as the car industry thrives in India, the car washing industry will follow. Cars are an integral mode of transportation in the modern world. India is the fifth-largest passenger car market in the world. With over 20 lakh new cars sold every year, the need for professional car washes has risen. Therefore, a car washing business is a lucrative startup opportunity. Follow this guide to learn how you can begin setting up your car wash business today.

The Car Wash Industry in India

The global car wash industry has seen steady growth over the years. In western countries, automated car washing businesses have become the norm. The global industry is following a CAGR of 3.1% between 2021 to 2028. The gross market value of this industry is expected to reach over USD 44 billion by 2028.

In India, however, automatic car washes are few. But the car washing industry has been thriving on manual washers. Companies like 3M that are leading the car detailing business expect to grow by 30 percent. Thus, the car washing industry is not far behind. Used or new, all cars get dirty and need to be washed. India has a stronger used car market. As the production of cars increases, so does the demand for professional car care.

Therefore, the car washing industry in India is still taking shape. It has a lot of ground to cover but innovative startups, such as CarZippi, have begun emerging out of tier-one cities like Bangalore and Mumbai. Nevertheless, the demand for car washing businesses is much higher than the existing competition.

What is the Future of Car Wash in India?

For a long time, cars have been washed by domestic helpers and an unskilled workforce. India is primarily a hot country with a lot of dust and pollution in metropolitan cities. This leaves most vehicles vulnerable to dirt on a daily basis. By adopting quick car wash models, you can tap into a hugely unorganized market.

India is set to become the third-largest passenger car market in the world in the coming years. Newer, faster, and more efficient methods of car washing are required. Currently, the car detailing industry is dominant when it comes to car care services. By bringing in quick and easy washes, car washing will become inexpensive and highly profitable. This will ultimately help organize and streamline the car wash industry.

How Competitive is the Car Wash Industry?

The car wash industry in India is highly localized. This means that there are not a lot of big domestic car washing companies. 3M Car Care, Ola Car wash, and Speed Car Wash are a few leading companies that provide overall car cleaning and care. However, most cities have local car spas that provide car washes. Therefore, there is immense scope for innovation and plenty of business opportunities.

Types of Car Wash Services

Innovation in the car washing industry has led to the development of multiple types of car wash services. Manual car washing is the standard service.

Apart from that, there are several types of services such as:

  • Tunnel System Car Wash: This is one of the most efficient car washing systems which works on conveyor belts. A tunnel is fitted with car washing machines and the customer parks their car on a conveyor belt. The car is then moved through the tunnel and gets cleaned within minutes.
  • Flex-Serve Tunnel: Customers who want the flexibility of choosing added care after a tunnel wash can opt for a flex-serve tunnel. This service allows customers to select aftercare and exterior detailing after a regular tunnel wash.
  • In-Bay Automatic Car Wash: This service is one of the quickest methods of car washing. It does not require an attendant. The customer can select what type of wash they want and the automatic machine will envelop the car and wash the selected area.
  • Self-Service Car Wash: This is the most affordable car service of all. Here, owners can wash their cars themselves. The company provides an owner with high-pressure water jets, dirt-cleaning chemicals, and other professional tools at a small fee. The owner can then wash their car as per their liking.

How to Create a Business Plan for a Car Washing Business

There are several steps that need to be addressed before starting out. You need an attractive car washing business model to stand out. That can be done through a business plan. A business plan will also help you raise funds since many of the automated car washing machines can cost a hefty sum. Start by using this standard business plan template and making modifications to it accordingly. Below are some steps to watch out for.

Market Analysis

This is the first step towards starting your car washing business. The car washing market in India is highly localized. There are a few car washing brands that have expanded in multiple cities. But the majority of car washing businesses tend to local customers. Thus, by studying your local market, you will get an idea about the saturation. Try answering some fundamental questions such as – How many car washing businesses are present in a particular area? What services do they offer? What is their pricing model?

Another important facet of market analysis is understanding your customer. Also known as customer segmentation, this allows you to create services that your customers want. How much is a customer willing to pay for a car wash? You will need to source data about your target customers and create services that match their interests and wallets.

Competitor Analysis

An important sub-part of market analysis is analysing your competitors. An in-depth look at your competitors can teach you more about the industry than anything else. Begin by identifying who your competitors are. Not all car care stores offer specialized car washing, hence they may not count as competitors.

Next, visit the website of these competitors or their shops and take a look at how they operate. What offers do they provide? What kind of marketing have they done? Do they provide add-ons and freebies to attract customers? Where are they located? By answering such questions, you will have enough data to create a SWOT analysis of your competitors. You can then capitalize on their weaknesses and learn from their strengths.

What Type of Car Washing Service Will You Offer?

As mentioned above, there are four primary types of car washing services. You may make changes to them and integrate them with manual washing too. However, the type of service depends on your customer. If you’re targeting the luxury car market, then a deep car wash service such as a flex-serve tunnel along with manual detailing would fit. Thus, take into account the spending capacity of your potential customers and the type of cars they own.

If most of your customers want a quick clean, a cost-effective automatic car wash would also work. Lastly, there is the option of manual car washing with advanced equipment. If you do not wish to invest in automatic car washers, you will need powerful manual washers, a large parking space, and a team of trained employees.

Get Licenses and Permits

All businesses require some form of a permit from the local authorities. To start a car washing business you will need the following licenses and permits:

  • GST Registration: You will need a GST number to fulfil tax liabilities. Get a GST number through a chartered accountant.
  • Shop and Establishment License: All shops and businesses need to get this license by applying to the local municipal corporation.
  • Water License: Washing cars consumes a lot more water than the prescribed limit for a business. Thus, you may need special permits from the municipal corporation for high water usage.
  • Fire License: When using automated machines, washing tunnels, and multiple vehicles, there are chances of fire hazards. Thus, have an inspector clear your building for fire safety and obtain a fire license.
  • Approval from Pollution Control Board: Car washing uses a lot of chemicals and detergents. This generates toxic effluents that you need to treat or dispose of safely. Plan this out and get approval from the pollution control board.

These are the primary license requirements for a car washing business. Additionally, make sure you trademark your logo if you intend to create a unique brand. As you grow your business, you may require more permits.

Pick a Great Location

A location can make or break a business. It is crucial to carefully plan and pick a location that can attract your target demographic. Most of your customers will come from around the location. Therefore, picking a location saturated with car owners is a must. One other thing you must take into account is the terrain. Is the street around your establishment too cramped or is it on a slope? While a minor factor, it will affect the flow of traffic outside your business which can also affect incoming customers. It is great if there is a service road outside your business. You will need at least a 2000 sq. ft. space for starting out.

What Equipment is Needed?

The equipment will determine the quality of your services. If you’re opting for a manual car wash, you need to invest in high-quality equipment and hire trained staff to use them. However, that may vary based on the type of service. Here is some equipment that is needed for a car washing business:

  • Automatic car washers (if opting for an automated service)
  • High-pressure manual washers
  • Vacuum cleaners
  • Large water tanks
  • Car wax, car polish, soaps, and other cleaning agents
  • Billing software
  • Display rack (optional if you want to display add-on accessories)

Cost of Setting up a Car Wash in India

There are four types of costs associated with setting up a car wash business in India:

  • Infrastructural cost: This cost covers car washing machinery, land, and other equipment. Automated car washing machines can cost between INR 20 – 30 lakhs. The land, depending on the location, can cost upwards of INR 1 lakh in rent per month. Additionally, there are construction costs (~ INR 5 lakhs) that you may incur depending on the type of business.
  • Employee Cost: Unless you’re opting for an in-bay automatic system, you will need a team of trained employees to run your business. Hiring a small team of professional employees can cost you between INR 1 – 1.5 lakhs per month.
  • Marketing Cost: Since your business is new, you will need to extensively promote it. Thus, a considerable portion of your investment needs to be spent on marketing. You will need a website, physical adverts, social media ads, and various other marketing campaigns. Expect to spend at least INR 5 lakhs to promote your business if you intend to get a head start.
  • Legal Cost: Lastly, you need to pay legal fees for obtaining all the licenses and permits. However, this is not a significant cost. Getting all the permits will cost you anywhere from INR 15,000 – 20,000.

The profit margin in your business depends on many factors such as your location, services offered, business model, target customers, and employees.

Training Resources

You can get trained in car detailing or hire employees who have been professionally trained. Two of the best car wash training institutes in India are:

  1. Carglow Detailers | Chennai | 7-Day course (Visit website)
  2. Auto Fresh Detailing Training | Surat, Gujarat | 5-Day course (Contact)

Conclusion

Car washing is an emerging industry with high demand in the country. You can also strategize your business geographically. For example, in dry cities like Delhi, Jaipur, and Chennai, the need for car washers is higher. Through meticulous planning and modern equipment, you can create a highly profitable business. Use this guide and start planning your car w

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