INVEST
€ 47 555
raised
€ 100 000
goal
10.00%
rate
12 MONTHS
duration
Cash-flow
project type
Monthly
% distribution
Commercial pledge
collateral
Smart Rent SIA
borrower
1
days left
€ 80 000
MIN amount
Overall risk level
A
B
Financial health
A
Management
A
Company’s record
CALCULATOR
LOAN AMOUNT
RETURN
+
INTEREST
%
DURATION
M
Self-service car wash
Self-service car wash

Self-service car washes in Latvia appeared about 6 years ago and since then has become very popular between car drivers. They beat in competition manual and automatic car washes by providing the same or even better results, usually are lower cost, great location network (availability), and reduced waiting time. The Company will construct self-service car wash in Riga, the capital of Latvia and require co-funding to implement the plan





INVEST
€ 47 555
raised
€ 100 000
goal
10.00%
rate
12 MONTHS
duration
Cash-flow
project type
Instantly
% distribution
Commercial pledge
collateral
Smart Rent SIA
borrower
0
days left
€ 100
MIN amount
Overall risk level
A
B
Financial health
A
Management
A
Company’s record
learn more how we grade our projects


ANALYST SUMMARY

We evaluate this project with a grade A. The Company has a long operation history and management experience in automotive industry. Self-service car washes are becoming more popular, and number of cars is increasing. The roads around car wash are busy, thus the Company should not be difficulties to cover monthly interest and repay the principle.

GENERAL INFORMATION

Self-service car wash developer will build a new car wash in Riga, the capital of Latvia. Currently the developer has received a building permit and is searching for financial aid to start the construction. According to the project there will be developed self-service car wash with 4 places for car with total area of 140m2, total area of 400m2.

·         First self-service car wash stations in Latvia appeared in 2017 and since then the popularity has increased rapidly.

·         Self-service car washes are popular among those who live in apartments and do not have possibilities to wash car manually and do not want to spend money for automatic or manual car wash services. 

·         Puto is the Latvian self-service car wash franchise with largest car wash network in Latvia with 30 stations.

·         Ehrle has second largest service car wash network in Latvia and is a German franchise with more than 5 000 self-service car wash stations.

·         The average cost of car wash is 4 EUR and it takes approx. 5 minutes.

SWOT ANALYSIS
STRENGHTS

Located at side of busy junction
Convenient access and good exposure to the street,
Outdoor kitchen, campfire place, hot tub, children playground,
Available space to place vacuum-cleaner and coffee vending machine which generates extra sales
WEAKNESSES
Directions of road lines are separated (not available left turn), thus only access from 2 sides,
Located next to office building
OPPORTUNITIES
No self-service car wash within the closest neighbourhood
Located next to the business park, which could increase car-flow and customers to the car wash
THREATS
Upcoming winter. During winter the number of transactions decreases.
Legislation to recycle all of part of car wash wastewater
Government limit of maximum water consumption for 1 car wash.
- Increase of gas and electricity prices. Gas and electricity is used as a water heater, so that water lines during winter do not froze.


COMPANY’S FINANCIALS

The company is providing full-service car rental for businesses, and leasing other equipment. Since the beginning of its activities the company has expanded its car park to 40 vehicles. The company has concluded a long-term lease agreements for its fleet to cover operation expense. For the last 2 years the Company has been operating with positive EBIT.

For further development, the company will take participation in self-service car wash development. According to the plan of developers, the car wash will return its investment on the second year.


OUTLOOK OF LATVIA
The growth of economic and overall well-being has resulted in increased car use, which has increased the demand for car wash services.  
Almost every driver has heard or has seen self-service car washes and about 64% of vehicle owners prefer to use self-service car washes. Of remaining – 6% prefer manual car wash and 30% use automatic car washes. In developed markets a single car wash serves 4 – 5 thousand citizens.  

Customers choose self-service car washes due to their low cost of service and high availability (especially in Riga), short waiting time in a queue and reduced possibility of damaging paintwork if compared to automatic car washes (except contactless car wash). Citizens appreciate to wash their car without waiting in a long line, spending less or the same amount of money than in automatic car washes and resulting in a similar final effect, often even better as manual car wash is more precise than automatic.  

Usually in Latvia 4 car wash stations are available within one place, but the maximum number of stations is limited up to 12 stations due to limited water volume flow (water supply and sewage).  
Full cycle of car wash takes about 8 minutes for driver, depending on the car size and dirtiness. Meaning that 4 cars can be washed in 8 minutes.   Only washing takes about 5 minutes and cost up to 6 EUR. Regular users wash their car in 3 - 4 minutes and uses around 3.  

In Latvia the total number of cars have been gradually increasing since 2011, and in 2022 reached 760th units. Around 6 years ago first self-service car wash stations were built. Due to demand of such services more market players appeared 4 years ago and the number of new self service car washes grew rapidly.  

In Riga there is 1 car wash for more than 20 000 citizens, meaning that there is still an opportunity to develop and successfully operate self-service car wash.

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