Course Name: Project Management

Course Code: MGT-204

Instructor: Sir Mohsin
Submitted by: Shah Muazzam Ata (BB-26807)
Muhammad Roohan(BB-27858)

TOPIC: REPORT ON AUTOMOBILE SERVICE

INDUSTRY (CAR WASH)

Feasibility Report on Automobile Industry (Car Wash Business)

 Acknowledgement:
We would like to express our special thanks of gratitude to our teacher (Sir Mohsin) who
gave us the opportunity to do this wonderful project on the topic (Automobile Service
Industry), which also helped us in doing a lot of Research and we came to know about so
many new things.
Table of Contents:
1. Proceedure________________________________________________________4-6
2. Project Costing_____________________________________________________7-10
3. Timing____________________________________________________________11
4. Alternate__________________________________________________________12
5. Common Barriers_________________________________________________12-16
6. SWOT Analysis__________________________________________________16-17
7. 4Ps of Marketing_________________________________________________17-18
Car Washing Processing/Techniques:-
Procedure:
Wash, wax and detail in the following order:

1. Brush, vacuum, and clean the interior. Either prior to, after, or on the same day.
2. Clean wheels and tires. To avoid splash back from the wheels. Also, use tire brushes
and never use them for the body of the car!
3. Wash exterior
4. Apply tire dressing
5. Polish wheels
6. Clean & Treat exterior trim
7. Polish and then wax exterior paints

Clean the interior:

Because washing a vehicle thoroughly can be an all day job you can opt to clean the interior
the day before or the day after.

Clean the exterior:

Washing the Paintwork
Although, in order to avoid deep scratches, the vehicle must be rinsed thoroughly before a
sponge is applied. To do this, always begin at the top of the vehicle and rinse down. If the
weather is particularly hot that day, the process will most likely require repeating, even after
just a few minutes. Always make sure that the section of the vehicle that is being washed is
wet. If possible park the car in a shady area. Also, morning or afternoon are preferable times.
Pour a liberal amount of soap into the bucket (making sure it is free of debris first) and then
fill it up with water. Follow the manufacturers recommended instructions for which quantities
of soap and water to use. Dip the sponge into the water and wait for it to absorb as much
soapy water as it can. Squeeze the sponge repeatedly while swirling it around in the water.
Squeeze excess water out of the sponge and then apply it to the roof of the vehicle. Always
wipe the vehicle's surface in straight motions (to avoid making fine swirl marks), remember
to begin with the roof and work down the sides to the bottom of the vehicle. If the weather is
hot, then soap the vehicle in small sections (I.E. a panel at a time), and then rinse
immediately. If not, the heat can dry the soap onto the vehicle's paint.
Washing the Wheels
It is highly recommended to use a different set of equipment (sponge, bucket etc.) for the
wheels. This will reduce the risk of scratching other parts of the paint work, as the wheels are
usually the dirtiest part of a vehicle.
There are two common ways to clean the wheels of a vehicle.
The first way is to clean them with soap and a wheel brush. The choice of brush rests largely
on the design of the hubcaps or wheels.
First, ensure that the wheels have been rinsed with water. Next, scrub them with the wheel
brush being careful not scratch the hubcaps' paint. Note: hubcaps with grooves in them can
contain a lot of brake dust, as can alloy wheels. These problem areas can require extra time
and scrubbing.
The second method is to use spray on, rinse off chemicals. Directions for these should be
found on the bottle.
Rinsing and drying the vehicle
An important step is rinsing all of the soap off of the vehicle. Begin at the top and spray
downward to avoid splashing soap back up to the top of the vehicle. If your finish has a good
coat of wax, make your final rinse with water of a moderate volume and low pressure about
an inch above the surface rather than a high pressure spray. This will create a sheet of water
producing fewer small water beads and will improve your drying results.
Afterward, dry the vehicle with a clean, plush microfiber towel. Microfiber towels are
superior to chamois or terry towels and will prevent new scratches from appearing in the
paint. As much as possible, dry the vehicle thoroughly including the nooks and crannies (door
jambs, under the hood, trunk lid, etc.) to prevent water spots and premature corrosion. It is
not recommended to allow the vehicle to dry naturally as minerals in the water will be left
behind as the water itself evaporates.
Polishing
Many products are available on the market which claim to polish paint to restore luster. Some
are more effective than others, consult your owner manual or vehicle manufacturer for a
recommendation for your particular car. A popular polishing tool with many enthusiasts is the
clay bar. Most polishes should be applied sparingly, usually no more than once or twice per
year. Never use a polishing compound on a car with a clear coat. These compounds are far
too abrasive and will remove the clear coat.
To use a clay bar, the surface of the vehicle must always be lubricated. Never rub the bar on
dry paint, it will scratch. Additionally, if the clay bar is dropped on the ground, it must be
discarded. The contamination it picks up would subsequently be ground into the paint if it
continues to be used.
Waxing
Most car wash solutions claim to have wax in them, however the amount they contain is
usually not enough to offer significant protection to your vehicle. It is therefore
recommended that a "hard" wax be used. These can come in a variety of forms, including
pastes, liquids, and sprays. If water applied to your paint forms very large droplets or does
not bead at all, it should be waxed. A general rule of thumb is to apply wax when the beads
become larger than 2.5 centimeters.
Since there are a wide variety of products, follow the instructions for application on your
particular product. Apply wax to one section of the car at a time, and let haze. Once this
occurs, remove the wax by buffing with a folded microfiber towel. Changing to different
folds often will make removal of the excess wax easier. After removal, it may be necessary to
open the doors to remove wax residue at the edges of the panels.
Car Washing Project Scope:-

The Cleaning/Washing Industry is Growing Fast:

The car wash industry is changing fast in Pakistan. In order for your car wash business to
succeed now and in the future, you have to understand just how the industry is changing.
There’s a huge demand for organized car wash outlets as existing outlets has been able to
cater to not even 1% of total running cars in Pakistan which is further growing rapidly every
day.
More Demand for Vehicle Detailing:

Technology is allowing people to see the importance of a good car wash. As a result, In
Pakistan people prefers car washes are done right manner and that they last longer. This leads
to an increasing demand for higher end detailing services.

For businesses in the car wash industry, this will mean increased margins and ultimately
more profits.

Lower Gas Prices Are Resulting in More Driving:

After years of heavy increases in gas prices are plummeting to levels not seen since the
beginning of the century. In response, people are driving more often. This means two things:

1. Cars are getting dirtier, faster

2. People want to look good riding around more often

Both of these factors signal a higher demand for car washing.

More Competition:

The rapid growth of the car wash industry and the increased competitiveness of smaller car
washes are turning more than a few heads. Many new entrants into the industry are starting
new car washes. In order to stay ahead of this competition, you must prepare for success.

This will require you to consider the following:

 How to
o Optimize your pricing strategy for all of your services
o Implement better training programs that allow your car wash team to clean
more effectively
o Prepare your car wash for rapid growth
 What tools you need to ensure consistent efficiency year-round
Project Costing:-

A detailed financial model has been developed to analyse the commercial viability of the
proposed service station. Various costs and revenue related assumptions along with results of
the analysis are outlined in this section.

Project Economics:

All the figures in this financial model have been calculated for estimated sales of Rs. 4.13
million in the year one. The capacity utilization during year one is worked out at 55% with
10% increase in subsequent years up to the maximum capacity utilization of 95%. The
following table shows internal rate of return, payback period and net present value of the
proposed venture.

Description Details
Internal Rate of Return (IRR) 44%
Payback Period (yrs.) 3.17
Net Present Value (Rs.) 6,366,486

Project Financing:

Following table provides details of the equity required and variables related to bank loan.

Description Details
Total Equity (50%) Rs. 2,045,974
Bank Loan (50%) Rs. 2,045,974
Markup to the Borrower (%age / annum) 16%
Tenure of the Loan (Years) 5 Years

Project Cost

Following fixed and working capital requirements have been identified for operations of the
proposed business.

Description Amount Rs.

Capital Cost
Plant and Machinery 940,000
Furniture & Fixture 243,000
Office Equipment 41,500
Pre-operating Cost 40,114
Total Capital Cost 3,194,614
Working Capital
Raw Material Inventory 181,212
Equipment Spare Parts Inventory 13,888
Cash 102,235
Total Working Capital 897,334
Total Investment 4,091,948

Space Requirement:

The stations operating in the industry do not follow any set pattern. Following table shows
calculations for project space requirement. The space requirement for the proposed Service
Station is estimated considering wash and full service facilities including a waiting room,
machines room, wash room, washing area, parking, workers room, etc. Details of space
requirement and cost related to land & building is given below.

Description Estimated Area Unit Cost (Rs.) Total Cost (Rs.)

(Sq.ft.)
Washing Area (Shed) 800 200 160,000
Parking (Shed) 800 200 160,000
Waiting Room 300 1,200 360,000
Machines Room 800 1,000 800,000
Workers Room 300 1,000 300,000
Wash Room 150 1,000 150,000
Total Infrastructure 1,930,000

Machinery & Equipment Requirement:

Following table provides list of machinery & equipment required for the proposed service
station.

Description Quantity Unit Cost (Rs.) Total Cost (Rs.)

6 Tons Cap. Single 2 110,000 220,000
Post Semi Hydraulic
Vehicle Service Lift
with Control Valve,
Girder Chasis, Axle
Supports

Air compressor 4Hp, 2 80,000 160,000

3Ph, Tank Capacity
230 Liters, imported /
Pak assembled c/w
standard accessories
Lift Oil (150L) 2 25,000 50,000
Washing Hose 2 35,000 70,000
(Imported) 50ft
Air Hose (Imported) 2 1,000 2,000
50ft
Mechanical Grease 2 1,500 3,000
Gun / Oil Gun /
Service Gun
Jet wash pump with 2 22,500 45,000
2Hp/3Ph electric
motor
Quick Foam 2 35,000 70,000
Dispenser (Stainless
Steel)
Vacuum Cleaner 2 28,500 57,000
(Model BF585-3)
Pipes and other 1 30,000 30,000
equipment
Tools 1 50,000 50,000
Installation 1 3,000 3,000
Miscellaneous 1 100,000 100,000
Engine for 1 80000 80000
Machinery
Total 940,000

Furniture & Fixtures Requirement:

Details of the furniture and fixture required for the project are given below.
 Description Quantity Unit Cost (Rs.) Total Cost (Rs.)
Executive Table 1 20,000 20,000
Executive Chair 1 7,500 7,500
Sofas 1 20,000 20,000
Store Racks/Shelves 2 12,000 24,000
Chairs 5 3,000 15,000
Stools 3 1,500 4,500
Other Tables 1 10,000 10,000
LED 1 50,000 50,000
Fans & Lights 1 20,000 20,000
Fire Extinguishers 4 3,000 12,000
Air Conditioners (1.5 1 60,000 60,000
ton split)
Total Furniture & 243,000
Fixtures

Utilities and Other Costs:

An essential cost to be borne by the project is the cost of electricity and diesel. Indirect electricity
expenses are estimated to be around Rs. 93,366 for the first year, whereas, diesel expenses
are estimated to be Rs.270,000 for the first year.

Furthermore, promotional expense for first three years being essential for marketing of Car
Wash Service station is estimated as 2% of total revenue.

Revenue Generation:

Description No. of Items Service Charges / Sales Revenue (Rs.)

Serviced Unit (Rs.)
Wash Only 3,168 150 475,200
Full Service 7,392 300 2,217,600
Motor Bikes 21,120 60 1,267,200
Carpets etc 1,650 100 165,000
Total 4,125,000
Timing:-

MANAGING WAIT TIME FOR CUSTOMERS:

Line management reduces the frustration of waiting vehicle owners.

Every business — carwash or otherwise — knows that keeping customers waiting too long is
a recipe for poor service. Not only can excessive waits cause customers to become upset and
agitated, but they can also cost the business through lost revenue and poor customer reviews.

Fortunately for carwashes that regularly deal with waiting lines of cars and trucks, a little
organization and a better system for informing drivers as to their progress can bring calm and
quiet to an area of upheaval.

Not only does wait line management — also known as queue management — reduce the
aggravation levels of customers and offer the potential to increase profits, it also benefits
employees who receive the brunt of complaints from angry customers kept waiting. At the
same time, the latest systems improve operational efficiency through the accurate tracking
and evaluation of wait times and processes.

For these reasons the latest in “wait line management systems” are now being installed by
forward-thinking carwash owners who see the advantage of keeping customers happy by
keeping lines moving quickly.

Prevent frustration and lost income:

Often, long wait lines create discontent among customers. Not liking to be “kept in the dark,”
people want answers, and without them, they get angry. Adding to this frustration are
environmental issues such as hot temperatures, exhaust fumes and traffic noise. Further, there
are individual issues such as a medical condition, a gnawing hunger or problems that the
customer has carried over from work or home.

Eventually, some drivers will pull out of the queue and spend their money elsewhere. At a
minimum, unhappy customers will complain about the long wait to their family and friends

Comfort the customers:

Wait line management systems address these issues by coordinating wait times in order to
help shorten them. Just as important, they keep those in line appraised of just how long the
wait is. This immediately provides the customer with a great sense of reassurance.

The data to provide this knowledge is collected and broadcasted through several components
of hardware and software. Basic systems include a “take-a-number” ticket dispenser; hard-
wired buttons that service personnel use to advance numbers; and flashing indicator lamps
placed over service windows or vacuum bays to identify which spot is now open.

More advanced systems serve several spaces and incorporate wireless buttons. Some systems
offer a controller with SD card memory for capturing wait times, number of people waiting
and several other events. As part of the system, that information is stored and organized in
software that enables owners to handle all aspects of queue management in real-time and
make adjustments where needed.

Information provided by such systems can include the: service type (as identified by letter
codes); estimated wait time and number of clients still waiting; current ticket number for the
client being served; total clients served per hour or per day; and minutes taken to serve each
client. Such knowledge helps improve operations and the bottom line.

Alternate:-
For a startup carwash business the competition is steep and the market often
finds alternatives that best suit their needs. Therefore in trying to carve a name
in this niche, you can only do this if you can overcome the barriers to marketing
plans that occurs within any car wash business .

Every business comes with its challenges. And it’s no different with the car wash
and auto detailing business. Competition is steep and the market often finds
alternatives that best suit their needs. For a startup carwash business that’s
trying to carve a name in this niche, you cannot afford to be the alternative – you
have to be the carwash to reckon with. Of cours e, you can only do this if you can
overcome the barriers to marketing plans that occurs within any car wash
business .

The Common Barriers to Marketing Planning:

What are these barriers and how can you deal with them? Below is a list to help
you out.

1 . Location Barrier : Certain factors may arise that will pose barriers

to marketing planning within the location you have chosen for your business.
Regulations, legal implication and social factors may come up. Not to mention
that some municipalities may have tough regulations on what governs car wash
businesses. Rent and rates might fluctuate from what may have been initially
planned for. Socially, people within the located town are not big on having their
car washed at an auto wash as they may believe in doing it themselves.
2 . Cultural aspect : Our society is made up of diverse peoples with different

norms and beliefs. A simple thing as having a car washed will greatly vary
between these diverse groups. Each group of people may have different
preferences about how they want their car washed depending on the ‘social
norms’ they grew up with. Some may support green living and therefore prefer
an eco-friendly car wash that will not harm the environment and their cars while
others may favor the exact opposite for various reasons. You can address these
cultural barriers to marketing by conducting a detailed research. Use the results
to create a marketing plan that will be attractive to everyon e in your area.
3 . Perfect market targeting : This is often one of the biggest barriers to

marketing that a start-up car wash business will face. Will setting up a car
wash in a particular location be of any value to your target customers? Some
towns may not have many car owners who would want their cars washed. Why
have it set up there? Most business owners make this grave mistake. Ensure you
target the right market while making your business marketing plan. If a market
was not quite well distinguished, then it is very risky for any business owner.
Again, proper research must be made to prevent this from happening in the first
place.
4. Economic Factors : Resources will always be one of the leading barriers

to marketing planning unless carefully allocated. This will directly pose a

challenge to a car-wash business which requires a foolproof marketing plan.
Have a reasonable budget to avoid facing this challenge. This way, you will give
your marketing plan the best tools to deliver the best results.
5. Creativity and Originality : You need to be innovative and creative when

making your business marketing plan. Take time and get down to brainstorming
on the best approach to sell your product in a unique fashion. No Google, no
sample template, etc. Have discussions with potential clients and business
partners. Ideas are bound to be unmasked by holding productive discussions
amongst clients/market. This will give you a cutting edge when delivering what
it is that people expect from a car wash business. Yes, originality can be a
challenge but you can overcome this by thinking out of the box. Better yet, do
not think of any box at all.
6. Skilled labor : It is one thing to have a marketing plan for your car wash and

it is another to have skilled and pro fessionals work getting done in it. Have a
guideline for the upkeep of the business for success to be within reach. This is
one of the barriers to marketing that you have to face as a car -wash business
owner. Most highly-skilled detailers are either hired or are operating their own
shop. So what do you do? Before implementing the plan, research in HR and be
prepared to have a significant number of available, well trained and professional
staff ready to work with you effectively.
7. Few or no Competitors : Yes, believe it or not, having few or no

competitors at all is one of the barriers to marketing. Competitors are like

gauges that measure the effectiveness of your car wash marketing strategies.
Without them, you will not have anyone to compare with in terms of quality,
facilities, additional business amenities and customer service which might
eventually causes you to take your employers and customers for granted. Do not
let the lack of competition stop you from providing the best car wash and
detailing services in your area. Do your best with or without competition.

Substitute:-
The industry and competitive analysis business plan is crucial for a deeper
understanding of the sector you are investing in. Only with this full awareness
will you direct your core offerings and strengths towards effective strategies that
have a strong fighting chance to succeed over the other more established players.
Top performing athletes do as well as they do because of tons of analyses and
practice prior to execution. Your car wash investment too, prior to execution, has
to do its fair share of in-depth analyses of the economic and business landscapes
within which it wants to build, thrive and grow. By learning how to write a
competitive analysis that is an accurate reflection o f the actual scenarios on the
ground, the more on point your car wash business plan is as an effective
communication tool for the various purposes it is intended.

This industry and competitive analysis aspect of your car wash business plan
covers elements such as – the car wash industry in general; your targeted market;
the competition and your niche or specialty .
The Car Wash Industry:

The viability of your business is dependent on the marketability of its products

and services in the industry, at the point in which you plan to enter it. Your
industry competitive analysis would therefore touch upon the nature of the
industry as in its growth potential, income projections, economic influences,
innovations, marketing strategies and management and operatio nal trends, etc.
Wherever possible, provide supporting documentary data and statistics and cite
your sources.

An example of the introduction to your industry overview may be along these

lines:

The latest reported value of the car washing industry, reported by the
International Carwash Association (ICWA) to be $23 billion in 2011. It
generates over a billion in payroll per year and is one of the faster growing
industries. Despite the past decade of economic woes which has caused many
customers to cut back on their discretionary spending, signs of its slow recovery
are trickling in. As such, consumer spending is slated to rise and that bodes well
for the industry as a whole .
The Market:

Then, you want to narrow it down to your targeted local market. Present your
research and analyses in terms of the size of your market, its growth potential
and your customer profiles.

Mention how with the slight easing up of the economy, overall new and used car
sales have made a turn for the better. And where you are located , good cross-
sections of the local community are also interested in extending the life of their
transport assets, whether it is for personal reasons or to increase their re -sale
values. They are willing to pay more for better quality car wash and detailing –
which your business wants to offer – but which is not currently available in the
neighborhood.
Further expand on the demographics you are aiming at by disclosing the
percentage of the community that falls into your targeted median household
income, the type of cars they own, the average number of cars they own, their
ownership type e.g. on lease, full ownership etc, and their mindsets as far as
their vehicles and car cleaning is concerned.

The Competition and Your Niche:

A competitive analysis of the car wash market you wish to participate in, should
hone in on your competitors inclusive of t hose that offer similar or substitute
services and products. You want to prepare a spreadsheet that shows their market
share, market position, competitive structure (i.e. pricing, effectiveness,
productivity, technology, growth capacity etc) and other stre ngths or
weaknesses. This groundwork has to be backed up with accompanying statistics
to your audience to facilitate their clear understanding of that business sector in
your target location.

You will simultaneously have to showcase your competitive edge b y backing it

up with achievements, strengths and how your niche will help you succeed in
defending against your competitors’ strengths or to sway them in your favor.
You need to also acknowledge your weaknesses to your audience, and explain
how your company plans to overcome them.

SWOT:-

Strengths:

Hand wash safer than machine (personal touch)

No extensive training required
Low start up cost
Flexible working hours
Equipment is easily obtainable
Flexible business structure; no physical base point needed
Weaknesses:

No established client base

Support staff retention – casual workforce
No physical premises – customers unsure where you're based
People can do it themselves – not specialised service

Opportunities:
Large target market (domestic and commercial)
Flexible working hours
Greater time pressure in everyday life – no time to wash car
Flexible business models for expansion e.g. franchise
Potential to expand to wash more than just cars e.g. boats, trucks, plant equipment, windows,
pets

Threats:

Other mobile businesses

Perception of water wastage
Future potential changes in water restrictions
Economy - people won't pay for luxury services
Established automatic car washes
Business model can be easily replicated by competitors

4P’s:-
Marketing Mix Strategy – Using 4 P’s of Marketing:

Product
These are items/goods or services you wish to provide to the ready market. Full
honesty is required; you need to be true while asking yourself questions related
to the launch of your car wash. Does the service p rovide value for the customer?
Is the service on demand? You wouldn’t want to provide a service that no one
wants. Judging with the billion figures earlier mentioned, there is little doubt
that these services particularly are a seller. This very reason as a product raises
very important question for its marketing, your co mpetitors, and your quality
compared to theirs, what ways you use to get feedback from your target market
etc. The last question is probably the most important. It’s good to have your car
wash service up and running but what can be even better would be whe n there’s
an operational system that checks in with customers, and asks them their
thoughts and for comments. Thus the need to have all the suggestion boxes we
see in certainly most businesses.
Price
The targeted market will always be the biggest influence on price setting. Capital
and running costs will also have an impact on the price. This means that you will
have to set a price that will satisfy the customer and also allow room for
reasonable profit. We say reasonable to avoid the notion that setting hi gh profit
margins is equal to “instant riches” particularly within the auto vehicle cleaning
service industry.
Place
It is very crucial to put time and considerable thought into the area that best suits
setting up a car wash business…very important! Suitab le places would be in a
busy town or near a gas station on a busy highway. Consider access to water,
supplies, drainage facilities and labor before setting up your car wash.
Promotion
This simply entails broadcasting your available services, and what the c ar wash
has to offer. Is the service unique to the rest of your competitors? If yes, then
promote it! A good example is our detail experts. We market our green and
friendly ways of detailing cars. Because of the unique nature of the service we
offer, a lot of time and resources have to be invested to promote the business to
get the most out of the market. Do you have any complementary services that
come with certain packages? Such add -ons have great impact to customers within
the car wash industry. A good example would be a free engine wash after
detailing.