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Investin' in the Car Wash

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The industry keeping vehicles clean is sparkling, too.

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In a troubling economic climate, when businesses would gladly consider running a charity car wash if they thought it might help their bottom line, the car-washing industry itself is showing surprising vigor. It's certainly not the most glamorous industry, but it's one of the few that's managed to maintain enough business to support both large-scale chains and smaller family-owned operations. And with summer car-wash season on the way, one big corporate leader is investing heavily.

A number of factors are helping the industry - most importantly, people are choosing to buy rather than lease their cars. Moreover, new environmental regulations are also aiding the industry. In southwestern Florida, for example, local officials have started imposing strict water restrictions on everything from lawn sprinklers to fundraising car washes to stave off summer droughts; officials in Georgia have imposed similar restrictions.

The industry's growth during the recession is even more surprising in light of the tough times it suffered in years past. But the industry has rebounded. The New York State Car Wash Association -- the organization responsible for regional representation and lobbying (yes, there's even a car-wash lobby) -- is beaming.

In a recent letter posted online, Mark Kubarek, president of the NYSCWA, stated "We finally got some wash weather and most operators saw volumes that they have not seen in 5 years. I think it has created a new confidence that all our hard work and effort can have positive rewards."

And then there's the sudden involvement of one very big player. As an extension of their popular Mr. Clean brand, Proctor and Gamble (PG) acquired the franchise assets of Carnett's Car Wash - an Atlanta-based franchise with 14 locations.

It was the company's most aggressive move yet in the car-wash game: In 2007, they opened 2 Mr. Clean Car Wash outlets in Cincinnati near P&G's corporate headquarters. Last year, the Cincinnati Mr. Clean car washes saw revenue rise 10%. Estimating that the car wash industry generates roughly $35 billion a year in sales,

Proctor and Gamble has since licensed the Mr. Clean car washes in 41 different states, and promised to move full speed ahead with the venture. In an interview with the Associated Press, company spokesman Jeff LeRoy said P&G's plan for the national car wash franchise was to "make it as big as we can."

While consumer confidence in other large-scale institutions may have waned, everyone still needs a clean car.

No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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