Never more so has the saying ‘cash is king’ been more relevant.
Ever since the coronavirus pandemic put the brakes on the industry, there have been many news stories about good businesses having to cease trading because of a lack of cashflow.
Cashflow will be more key over the next few months with the government’s furlough scheme ending and deferred VAT payments also due.
Washing and valeting has always been a loss leader – a huge but necessary evil when it comes to cashflow. Not anymore.
Traditionally, dealers have paid third-party companies to valet their sales and service vehicles, usually being invoiced on a per-person-per-day-basis. The cost of this based on three people generally comes to a minimum of £200 per day. That’s more than £60,000 per year, per dealer.
At Istobal, we offer a solution that reduces costs and increases cashflow. We install an automatic car wash at your dealership with £0 capital outlay and on a pay-per-wash basis. Assuming a volume of washing 40 cars per day, the cost is less than £1 per wash.
That includes chemicals, maintenance, electricity and water. The more cars a dealer washes per day, the cheaper the cost per wash becomes. A wash and dry cycle takes less than five minutes. The greater the volume, the lower the cost per wash.
The result? More cars washed giving a consistent finish to every car. Importantly at this time, there are fewer people on site and fewer touch points on a car.
You employ one person or use existing staff to move the cars around your site and vacuum the cars and black the tyres. It is a formula that works.
We also anticipate Brexit coming back into play at the end of the year and into 2021 with labour availability. A lot of labour in the hand car wash sector is bought in from overseas and this may have an impact on availability.
However, the benefits reach further than just cost reduction and increased cashflow. Manufacturer standards states a requirement to wash and vacuum an existing customer’s car when it comes into you for service work.
There is no expectation for this anymore. A machine provides further upselling opportunities. How many of your customers would pay £5 on top of their service bill to have their car waxed, polished and now disinfected too? We estimate 50-60 per cent. A loss leading operation is now a profit maker.
This extends to the sales department also. When a customer buys a car from you, offer to wash it for them for free for life. If they come in once a month, it costs you less than £12 per year but will retain their custom for years to come while keeping the rapport with the customer and increasing your CSI.
It can help sell cars too. When a potential customer walks through the door, take their existing keys from them and wash their current car. They won’t say no, it builds trust immediately and it keeps them in the showroom. Plus, if they are part-exchanging you can do a more accurate appraisal.
Finding new ways to make and save money is key as customers embrace the new normal. If you have other dealerships around you, join forces and share the cost with them or charge them for using the car wash. It reduces their costs and increases your own revenue.
With Covid-19 having an impact on the number of hand car washes reopening, the ultimate step if you have the space and site layout allows to open the car wash to the public. If so, you can charge anything from £4-£10 depending on the programme.
Our Smartwash technology allows all aspects of the machine to be managed from a control panel or dashboard on your laptop and mobile device.
Globally, Istobal have three manufacturing plants, eight subsidiaries and distributors in 75 countries. We are the largest 100 per cent privately owned vehicles wash manufacturer in the world. We have more than 1,000 installations in premium car manufacturers production lines, car dealerships, petrol forecourts and with the some of the largest truck and bus transport hubs in the UK alone.