2008 has brought more than incremental changes to the Auto Detailing subsector. For example, the costs of car waxes and detailing products have increased by 15-20% in the last year and a half. Specialty products also cost more to ship due to increased fuel costs for carriers; Often, detailing companies must place special orders for some products.
Perhaps one of the biggest problems and challenges in some areas is that of water and drought. In some markets, this is causing difficulties in obtaining business licenses for auto detailing operations. There have been some auto detailing shops that have been forced to close until the Tier III droughts end and local water reservoirs fill up once more.
Used car detailing at the wholesale level has declined as more car dealers submit SUVs to auto auctions instead of trying to resell them on their lots. And we’re seeing an increase in smaller cars, which means lower total average price per ticket charges. This is reducing profits.
For some auto detailers, the recent crackdown on the work of illegal aliens has affected and made it more difficult to obtain good labor. Although now, unemployment is on the rise thankfully giving a little respite to the labor shortage, training is still a constant battle and without proper training, quality is reduced and that is unacceptable in this industry.
Consumers are cutting their budgets, and this is cutting profits for auto retailers in almost every region of the country. Fortunately, people are keeping their cars longer, which means more retail detailing, but since they’re buying fewer new cars, it’s also reducing volume, and when you average out, it’s still less commercial than before. In fact, 2009 is almost here and things will change as soon as the economic cycle changes.