By Jim Utter
Director of Journalism
Everything is bigger in Texas, including the car wash market it appears.
According to a new study by FOCUS Investment Banking, the Texas car wash market is the largest in the United States, that covers a population of 31 million people and more than 23 million registered light-duty vehicles.
Combined with a warm climate, multiple major cities and less restrictive development, it’s no wonder it features a large car wash inventory.
But with great numbers also comes the possibility of problems.
Overall, FOCUS Investment Banking gives the Texas car wash market a Saturation Score (a metric created by FOCUS by internal analysis) of 94, indicating a very high degree of saturation.
That shouldn’t come as a big surprise given the appealing market attributes and the extensive recent new site development.
It may, however, give investors pause going forward, or at least become much choosier when it comes to potential new locations, especially with the major metro markets of Dallas-Fort Worth, Houston and San Antonio being some of the most saturated yet active in the country.
Across the state, there are currently more than 80 car wash chains owning between two and 15 locations (including both operating and new developments in progress), totaling more than 425 locations.
“Given the presence of most top 10 national car wash chains and a very active development pipeline, we estimate Texas is soon approaching its total market capacity,” the study said.
“Further development beyond our estimated market capacity will likely cannibalize the volume at other operating car wash sites to a greater degree and/or cause the closure of certain underperforming sites, primarily older legacy car washes that don’t provide the same service level of modern express car washes.”
While nine of the top 10 national car wash chains operate in Texas, the state has only experienced moderate consolidation over the past five years. Currently, the top 10 chains in Texas (by unit count) have a collective market share of 44.1%.
The FOCUS study sees the consolidation landscape changing in the future.
“We expect (mergers and acquisitions) consolidation activity in Texas to increase dramatically going forward between 2025-2027,’ the study said.
“We also strongly believe Texas is a logical market for another large (private equity)-backed platform to be established and execute a regional M&A roll-up strategy given the abundant acquisition targets mentioned above.”
While the market may be nearing its saturation point, its positive market attributes keep it viable.
Texas maintains a robust economy, with diverse industries; it has no personal income tax; there is expansive land availability; and it continues to see steady population growth.
