Attachment 2 - Economic Needs Assessment

   +       Real household discretionary income – Demand for car washes and detailing depends on
           discretionary income. When consumers have more discretionary income, they are more likely
           to pay to have their vehicle professionally washed. Real household discretionary income is
           expected to increase by 1.12% in 2022-23, strengthening the industry's performance;
   +       Availability of water – Water availability inversely correlates with demand for car washing
           and detailing services. When water availability declines, consumers tend to use less water
           and become less likely to wash their own cars, compelling them to use the industry's services.
           Although water restrictions have been minimal over the past five years, some restrictions
           were reinstated in regional Queensland and New South Wales in 2018-19 and 2019-20,
           effectively banning residents from washing their cars at home. Water availability is expected
           to rise by 1.44% in 2022-23;
   +       Average weekly hours worked – When consumers work more hours, they have less time
           available for other activities. Consequently, an increase in the average weekly hours worked
           means that consumers are more likely to pay for their car to be washed than do it
           themselves. The average weekly hours worked is expected to increase by 0.64% in 2022-23;
           and
   +       Average age of vehicle – Consumers are more likely to have new vehicles professionally
           washed and detailed to keep their high-value purchases in good condition. When the
           average age of the vehicle fleet declines, newer cars make up a larger proportion of
           vehicles on the road. As a result, a younger vehicle fleet makes consumers more likely to use
           the industry's services. The average age of the vehicle fleet is expected to rise by 0.96% in
           2022-23.


5.3 Industry Outlook
Between 2022-23 and 2028-29, revenue within the car wash and detailing services industry in
Australia is anticipated to increase at an AAGR of 1.3%. Meanwhile, growth in the number of
establishments and employment within the car wash and detailing services industry in Australia is
anticipated to increase at a much lower AAGR at 0.7% and 0.6%, respectively, throughout this
timeframe.
Additionally, increasing automation in the industry’s car washing processes will likely lead to greater
service volumes and profit margins. Nonetheless, the COVID-19 pandemic is forecast to limit growth
in industry establishment and enterprise numbers over the next five years, as existing facilities and
operators largely satisfy market demand nationally. Moreover, consumers are anticipated to
increasingly use self-service bays, in-bay automatic washes and conveyor tunnel washes over the
next five years. Thus, this trend is projected to constrain growth in industry employment numbers
between 2020 and 2025.
Table 5-2 outlines the projected performance trends within the Car Wash and Detailing Services
industry in Australia between 2022-23 and 2028-29.

Table 5-2      Car Wash & Detailing Services in Australia – Performance Outlook, Australia, 2022-23 to 2028-29

 Year                           Revenue ($m)         Establishments (No.)     Employment (No.)

 2022-23                                578                       2,259                 3,533

 2023-24                                591                       2,293                 3,472

 2024-25                                602                       2,312                 3,550

 2025-26                                610                       2,336                 3,650

 2026-27                                612                       2,329                 3,593




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