Ownership, customer access and types vary greatly
In Japan, when automobile owners get a scratch on their car or a ding in their bumper, a trip to the body shop is sure to follow. That same level of pride of ownership carries over to the car wash industry. If it’s dirty, a trip to the car wash is a given.
“The car is an asset,” said Ichiro Mizuuchi, General Manager (President`s Office) of car wash equipment manufacturer MK Seiko, which marked its 70th anniversary in 2018. “Japanese keep their cars very well. They spend a lot of time and money washing cars.”
That is especially true in Tokyo and other big cities. Mizuuchi estimates drivers wash their cars every few days. Outside the city, where “there is so much dust,” cars might get washed every few weeks.
Japan’s car wash industry is in some ways much like the United States, but in key areas, it is a world apart in terms of the type of washes, who owns them and how customers access them. Mizuuchi recently sat down with CAR WASH Magazine to talk about the industry there.
START WITH SERVICE (STATIONS)
The car wash industry is closely connected with service stations – and a vital aspect of business. “We have 32,000 service stations in business all over Japan,” Mizuuchi said. “They must have at least one car washing machine, otherwise, customers don’t come.”
He estimates about three-fourths of car washes in the country are operated by service stations and are a vital addition to the stations’ bottom line. “Selling gasoline is not much of a profit,” he said. “They have to do something else.” Some service stations sell tires and other auto repair services and “of course they have to have the convenience store.”
But car washes offer the best profit and drive traffic, especially given the frequency in which Japanese seek cleaner cars. As cars have become more efficient – and the need for fuel has dropped – the car wash drives traffic.
“ But car washes offer the best profit and drive traffic, especially given the frequency in which Japanese seek cleaner cars”
Standalone car washes are much rarer – at least at this point. Mizuuchi anticipates that may change, given the dramatic consolidation of the service station industry. Japan had 64,000 service stations in the early 1980s. It’s about half that now.
LEADING MANUFACTURERS
Originally named after its founder Maruyama, the company began manufacturing household items like bread makers and rice makers in 1948 before expanding into radiators and freezers. The company still manufactures a diverse array of household goods, like rice dispensers and polishers. But it has since expanded into other industries. When the company became public in 1980, it changed the name to MK Seiko.
In 1983, MK Seiko entered the car wash market. According to Mizuuchi, the company has roughly 42% of the market, depending on the day. Now, MK Seiko is one of the top three car wash manufacturers in Japan. The rest is controlled primarily by two main competitors, Daifuku and Beauty. Ten years ago, the manufacturing sector in Japan went through major transformation with consolidations and closures, leaving only the three major car wash manufacturers standing.
All of MK Seiko’s manufacturing – from car washes to rice polishers – is done from a factory in Nagano, with 800 employees. About one-third of those employees are devoted to manufacturing car washes, Mizuuchi said. MK Seiko offers three types of car washes and produces about 1,500 machines each year.
MK Seiko produces drive-through, rollover and large equipment versions with several models and options in each category. But with three-fourths installed in service stations, rollovers are by far the most popular, Mizuuchi said. The rollovers take up much less space than a tunnel – something highly valued in cramped Japanese service station lots. With the rollover type, the driver pulls into the car wash; the wash moves over the car and the driver backs out of the space after the wash is complete.
“Almost no one uses the tunnel. We still make the tunnels, but the last few years, no one buys that. Our tunnels are becoming less and less of the business while we focus on rollover,” he said.
Still, MK Seiko keeps the tunnel in its lineup. “If we go outside Japan, we need a tunnel. We need a medium tunnel, a long tunnel. We have the technology to do that.”
“ Almost no one uses the tunnel. We still make the tunnels, but the last few years, no one buys that. Our tunnels are becoming less and less of the business while we focus on rollover”
Car dealers make up the second largest potential customer, with about 22% of its sales aimed at that service. The rest are what Japanese know as “coin wash,” self-serve washes that are open 24 hours.
There also is a sizeable market for washes that can service charter buses. “Any bus that serves tourists has to be washed every day before it goes on tour,” Mizuuchi said. “We used to make 60 of these machines a year. Now we’re up to 150 and I think we’ll do more.”
Mizuuchi joined the company about four years ago and six months later visited the United States and The Car Wash Show.
“In Japan, there’s no association and the government doesn’t track the size,” he said. “There are no statistics.”
AN EYE ON EXPANSION
MK Seiko has benefited from economic trends and its own innovation to gain market share. In the late ’90s, when gas stations were deregulated, the company and others began focusing on the drive-through model. MK Seiko developed its car shape recognition system in 1991. The system moves all facets of the car wash to respond to the specific vehicle. By 1988, the sensor technology used 225 lines to recognize the car. In 2005, the washes installed cameras to recognize aftermarket accessories.
These days, there are 535 sensor lines and an ultrasonic scan that help optimize the position of the brushes and blower nozzles. The scan also can detect off-center and slanted parking positions. The Façade model, MK Seiko’s flagship model, can deliver a high-quality wash in under a minute.
That ability allows the number of cars washed per day to increase, improving profits and customer satisfaction – as well as reducing congestion as customers wait for the wash.
With its very first car wash, MK Seiko offered a wax option. These days, that is much more high-tech. It added a water repellant coat in 1998. In 2014, the company introduced the Tiara Coat Premium, a glass-like resin that delivers a hard, smooth coat.
It works hand-in-hand with the car wash. “You must have a good car wash,” Mizuuchi said. “If any contamination is stuck underneath, it doesn’t work.”
It is an expensive add-on, costing $18-$22, he said. “But once you do it, it’s two months before you do it again. If there is no rain, you go and pay only for the car wash.”
PREPARED FOR CHANGE
Mizuuchi would like to continue taking MK Seiko internationally, reaching into the United States. He realizes that some of the technology available might be seen as overkill. According to Mizuuchi, the more sensors can mean more manufacturing cost, and may be seen as not necessary.
He brought three engineers to The Car Wash Show to help prepare his team for change. They scoffed at the idea initially, he said. Japanese engineering and production have outpaced other nations in the past. “We used to manufacture the most cars. Now, the U.S. produces more than we do, and China, even more,” he said. He wanted the engineers to realize that there was much to learn, from both sides.
Car washes have the same potential for continued innovation abroad. “We just started in Asia, specifically Indonesia, Thailand, Malaysia, Singapore, a little in China and Korea. Now, I somehow want to open up the USA and Canada, but it takes time. There are so many manufacturers here.”
Truly entering the market, he believes, will take education on both sides. “We can learn so much from the car wash business in the United States,” he said.
That is crucial to survival as Japan’s car wash industry changes, pointing to the reduction in service stations as vehicles have become more economical. “Five or 10 years out, who knows what the Japan service station market will be? We have to be ready for change.”
