The Car Wash Industry in 2005 had its shares of ups and downs. Previously water shortages were one of the biggest issues, yet the drought times have past for now. Not that there is any more water with the US growth, but better systems in water efficiency, reclaiming and recycling that took place in car wash systems has helped to over come that obstacle. Labor supply in 2005 was amongst the largest complaint and across the nation we have seen a crystal meth drug problem in workers between the ages of 18-32, which are generally the ages which car wash employees are drawn from. Quality labor supply will continue to be a large and problematic issue in 2006.

Especially considering the crack down on illegal immigration labor and the enforcement actions on such practices. In 2005 we saw a further bettering of robotic systems and low-cost turnkey operations emerge as well. One notable franchise chain filed bankruptcy as well. Over regulations in the franchising sector are largely to blame. Car wash consolidators did not expand heavily in 2005 and we witnessed the largest car wash chain in Europe get bought out and they looked toward the US for expansion due to the differences between the Euro and dollar. High fuel prices also cut into total volume and sales as well as increased competition and over regulation forcing up costs and therefore passed onto the public all taking their toll on the bottom line. Old man Hanna of Hanna Car Wash Systems a pioneer in the Industry has passed on, yet his vision still lives on; that is to say high volume car washes at low and affordable prices.

As we look at 2006 getting under way we see Wal-Mart look to fill some of its excess parking spaces into automated car wash tunnels, using pre-paid cards and Sam's Club cards. The prototypes are up an running in their test markets and they plan on rapidly expanding this concept. We will continue to see more robotic touch-less systems and use of flex service which are partially manned by day, yet one can kiosk pay after hours for an automatic only wash cycle. The car wash industry will finally see the slowing down of the use of Hydrofluoric Acid and its eventual stoppage, as no car wash chemical suppliers will dare to sell it for fear of lawsuits, OSHA and environmental risks.

We will continue to see mobile car wash businesses flourish in many markets, as they learn to collect their waste wash water, those who don't will be shut down by enforcers of NPDES EPA guidelines, as fixed site car washes call in the violations to prevent the competition. We are sure to see more car dealerships offer free in-house washing to keep customers close to their service departments and possibly to generate sales of new cars by giving away lifetime car wash benefits. 2006 will be a notable year for the car wash industry indeed. Think on this.