Construction Mirror Industry Features Details

Govt’s Renewed Thrust In The Infra Segment To Boost The Demand For Backhoes

September 06, 2018

Market Evolution

For >40 years, Backhoe Loader has been around as common CE in urban engineering & small construction projects. Over the years this construction equipment (CE) market in India has gone through evolution. Presently the sales of backhoe loaders in India are expected to increase from the 21,192 units sold in 2015 to 28,000 machines by 2020, a +32% increase, according to Off-Highway Research. India is clearly one of the largest backhoe loader markets in the world, with this type of machine accounting for the majority of all CE sales in unit terms. Moreover, the Investment in infra by the GoI seems to be driving backhoe loader sales a notch higher. There are also several other initiations underway to reform procedures & policies around infra investment which should stimulate the sector further. Additionally new funding initiative is taking place across the country. These factors are expected to underpin growth across the Indian CE sector in years to come, but there are other reasons for the backhoe loader market in particular to enjoy continued buoyancy.

Market scenario & Future trends

The backhoe market in the country has been growing at a rate of close to 37% CAGR over last few years & this pace is likely to continue in the coming years too. As a matter of fact, India is the second largest market for backhoes in the world. This segment is perhaps the only one in the CE sector in India that has reached the stage of maturity & scale where exports could be considered. The market for backhoes is spreading eastwards, largely due to the way in which India is making progress in the infra & construction segment. JCB India & Mahindra CE are the market leaders in the segment with a share of over 70% followed by other players like Caterpillar India, ACE, Escorts, Terex Equipment & few more. Backhoe loaders are expected to account for over 68.23% of total sales of CE by 2018. This is because there are clear benefits of using backhoe loaders over manual labour & traditional methods like improved quality, timeliness, better project financials & safety. Further, factors such as increased demand for mechanization will also work in the favor of growth of backhoe loaders in India. In the coming times, with more players entering the market segment & increased competition among them, the price competition is slated to increase. Also, since backhoes are used for all construction applications, the backhoe rental market will see a boom in the future. Many big players have entered the backhoe rental market & thus, backhoe loaders on rent will be a more common norm in the days to come.

India has a teeming population of backhoe loader OEMs, of both Indian & global brands. All are set to capitalize on infra projects being fast tracked by the Govt. Only the backhoe loaders loaded with USPs cut out for niche markets can win max. Market share. Along with the boom in construction & infrastructural projects come the necessities for CE. Among them the most versatile, one must say, is the backhoe loader. These workhorses in varying capacities will meet demand of big ticket buyers as well as the large number of individual customers. The backhoe loader expedites project execution which would otherwise require thousands of man hours. This beautifully complex piece of machinery heralded the arrival of mechanization in construction, & was followed by all sorts of other machinery which were accepted & used widely in India. JCB pioneered the backhoe loaders concept almost four decades ago in India & has sold over 2,25,000 backhoes in India. It continues to be one of the most widely used CE in India. The backhoe loader is popularly known as the Swiss army knife of CE. In order to enable it to complete various tasks, backhoe loaders come with an extensive range of attachments that can be fitted to it for performing difficult tasks like lifting, grabbing objects, dozing, drilling, demolition & leveling the ground. Due to its affordability & multi- application versatility, the backhoe loader is the popular choice for most jobs & accounts for approximately 65% of the earth moving & CE segment. At present, most of the technology leaders like JCB, Mahindra, Escorts CE, Terex, Case, Caterpillar, TATA Hitachi, ACE, LeeBoy, BEML, Bull, etc, are present in India either as joint venture CoS or have set up their own manufacturing facilities or marketing CoS. All backhoe loaders sold in India are manufactured in the country. In addition to domestic sales, Indian based backhoe loader manufacturers exported some 2,171 units last year according to the consultancy, Off-Highway Research.

The growing popularity of the backhoe loaders in the global market has also necessitated new inventions in the production of the same by its manufactures. It is for this reason that the established players in the field are increasingly working towards reducing customer’s pain points by enhancing the backhoe productive performance, uptime, & the ease of operation & maintenance so that customers can singularly focus on business outcomes. GoI is taking initiative such as Sagarmala Program & many other such initiatives that are creating a demand on its own for this product market. If you see backhoe machines statistics you will find out that for coming 2 years or so it is going to be an upward rise of 25000 machine market all put together. Plus it might be exceeding that. In this respect, we are targeting for 10-15%. Out of these 25000, 23000 would be on soft strata in which only 10 people are competing in which there is a distinctive advantage which is lacking in general category. Backhoe loaders account for close to 50% of all CE sales in unit terms. At the current estimate, there are nearly 200,000 backhoe loaders deployed across the country in various projects. Most of them in operation are manufactured in the country by the OEMs. Apart from domestic sales manufacturers have also been eyeing exports with to 2,171 units contributed last year. According to persistence market research, India is expected to continue to be the world’s most lucrative & largest market for backhoe loaders, growing at 6.9%- higher than the 5.9% global CAGR- through 2026. On the back of strong demand from the US construction sector, North America will maintain its position as the world’s second largest market, followed by Latin America. Global heavy CE industry is projected to grow at a CAGR of 6.80% from 2015 to 2020 of which the heavy earth moving equipment is the fastest growing segment across the globe & India is no exception here. In fact, the heavy earth moving equipment segment in the country accounts for close to 70% of India’s CE market. On the basis of operations performed by the various machines in the segment, the earth moving equipment industry can be bifurcated into excavators, loaders, backhoe loaders or backhoes, construction tractors & others like grader, scraper etc. Among all, Backhoe Loaders account for >65% of heavy earth moving equipment segment (followed by excavators) & 40% of total demand of CE in India.

System Development

With times there has been development in Productivity & performance. Backhoe loaders can now enable more Load, Dig & Doze productivity. Security, Servo Controls, & serviceability have now become an important criterion. Operators now want to be assured of the safety, security & operation update with the advanced system. The buyers are looking to manage their machines on Service, Operations & Security of their machines through real-time alerts. In this regard, JCB India has introduced a new ecoXcellence range, specially designed to deliver excellence in all aspects. The new machine is 10% more fuel efficient with 30% less maintenance cost. The ecoXcellence range is fitted with the new generation JCB ecoMAX engine, & provides high productivity & enhanced performance in any application. Following the line of innovations manufacturers, CASE India has introduced latest technologies with engine capacity & higher torque along with a banana boom which dictates the machine’s max. digging height, max. dump height, & fuel efficiency. The Co. offers S8000 engine, deliver powerful performance & fast response time coupled with a 5% which translate into huge customer savings. LeeBoy offers standard features like a 4WD side-shift, extended dipper, multipurpose bucket & an air-conditioned cabin. However, Escorts has features of a durable & chassis, boom, dipper, & loader arm structure specially designed for Indian application with ‘high tensile strength’ steel. Further, it has ergonomically designed spacious operator cabin & ‘equipment management system’ which works as effective diagnostic & tracking tool. Caterpillar is also innovating its backhoe products with the introduction of features like high rotation backhoe bucket linkage design, spacious cabin with an ergonomic interior for max. operator comfort, carved boom for easy reach over obstacles, variable flow hydraulic system adjusting to demand along with excellent fuel economy. Terex is also breaking new ground with its range of versatile, innovative & efficient backhoe loaders. Its unique UC Hydraulic Mechanism is designed to set new standards in Fuel Economy while delivering uninterrupted digging & loading. Backhoe Loader of ACE is installed with new technologies like KIRLOSKAR engine 4R1040T (BS III) 4 cylinder, turbocharged, water cooled diesel engine & developing high torque with low fuel consumption. Their machine is installed with hydrostatic steering for reliability & better control. Roll-over protective structures is fully enclosed wide view cabin with easy entry & exit from the cabin for the operator. Tata Hitachi is also introducing new features in its products like its peer manufacturers as it offers one of the most fuel efficient machines in its class. They provide power-shift transmission in their backhoe loaders which improve productivity & ease of operation. However, fuel efficiency is achieved by a combination of many factors such as the inherent design of the engine, the application in which the machine is being used in & the operator skill. The broad range of fuel consumption in the Backhoe Loader is between 3.5 to 6 litres per hour, depending on the model & application mix.

Demand drivers

The booms in housing, construction & infra- including transport(road, rail, sea, airports), power, mining, pipelines, irrigation & water supply, etc. as well as rural development driven by Gram Panchayats & small municipalities, coupled with the Swachh Bharat Abhiyan & Pradhan Mantri Gram Sadak Yojana projects has been raising the demand for backhoe loaders. CE industry in India is expected to reach $5 bn by FY’20 from $3 bn in FY’16 in value terms & with infra investment set to go up, the sale of CEs is expected to grow at an estimated CAGR of 6.18%, in volume terms to 96,700 units by FY’18 from 50,000 in FY’07. Backhoe loaders are expected to account for over 39.28% of the total CE sales by 2018. Off-Highway Research estimates an active population of over 195,000 backhoe loaders in India. But despite the growth forecast in the sector, sales of backhoe loaders are not expected to exceed the high water mark of 33,595 machines sold in 2011. Apart from the construction & infra development in urban India which was the major demand driver for the backhoe loader market, the 2016-2017 budget allocation for rural development that amounted to Rs. 86,000 Cr., out of which Rs. 19,000 Cr. was allocated to the road sector under the PMGSY project had contributed to the demand. The PMGSY has proved to be a key driver that boosted backhoe loader sales for the bygone decade. Now, again, rural development is going to be the major driver for backhoe loaders, considering the 2017-2018 budget allocation of a whopping Rs. 1,05,447.88 Cr..

Global trends

As for the global earth moving equipment, growing industrialization in several parts of the world presents better opportunities for the earth moving equipment market. According to Persistence Market Report: Global earth moving equipment market will witness a robust growth growing at CAGR of 6.7% during 2017-2025. Earth moving equipment market in APAC is estimated to represent more than 50% of market value share in the global earth moving equipment. China & India are among the developing countries with intensive construction activities that fuel the growth of earth moving equipment market. In terms of volume, backhoe loader sales will grow at a 7.3% CAGR, owing to its smaller size, which makes it simple to use in different types of construction projects. Increase of PPP projects in commercial & residential constructions will drive the earth moving equipment market, says the report. Reports on the Indian market expects the demand for backhoe loaders to increase at a healthier pace than what has been seen since early 2007 onwards & it anticipates the demand to touch new high of 3400-3500 per month. Inquiries with both buyers & suppliers of CE are pointing towards a significant recovery from FY’17-18 onwards, & the industry expects to further build on this momentum when getting into FY’18-19.

Major challenges

Driver training is a major challenge in this segment. Driving a backhoe loader & putting it to optimum use is a specialized skill in itself due to operational capabilities of the machine. Most importantly this machine has a very small turning radius due to the very nature of its tasks. They have to operate in limited confined spaces & hence need high maneuverability with a small turn radius. The other important characteristic of these machines is that it operates at both ends. Hence the driver has to be equally familiar in both the forward & reverse gears. Most OEMs of backhoe loaders offer specialized driver training for their clients. Market leader JCB has 14 operator training centers across India, which have produced about 24,000 certified drivers till now. ACE has a dedicated training center at Faridabad. LeeBoy’s Expertise Development Growth & Excellence (EDGE) is another case in point for driver training. Terex also has its own Terex Training School. Stringent emission norms confirming to BS IV is another major challenge for backhoe OEMs. Rules & regulations on emission levels for mining & CE is also restricting the demand for earth moving equipment. Different countries have different laws for the emission, for example, Europe & North America have more stringent laws on emission as compared to other countries. Equipment finance is another major challenge in India. A majority of the Indian rural market does not have a strong financial background, & have to resort to equipment finance CoS to fund their purchases.

Major OEM offerings

JCB is the global leader offering widest range (7 variants) of niche oriented backhoe loaders, namely- 2DX, 3DX, 3DX Xtra, 3DX Super, 4DX, 2DXL, & 3DXL to suit different user segments for different applications. The new 3DX ecoXcellence range is the latest addition to JCBs range of next generation backhoe loaders. It delivers an increased fuel efficiency of 10% with a 30% decrease in maintenance cost. This equipment is fitted with the new generation JCB ecoMAX engine that provides high productivity & enhanced performance in any application. Owing to its high digging force & fast excavation cycle time, the machine works 25% more per litre, churning out the best performance in all strata with fuel savings worth Rs. 800,000 thousand in 3 years. It is designed according to Indian excavation & loading requirements so it can load conventional & high bodied rigid dump trucks. Other competitive attributes are newly designed spacious cabin with 20% more leg space for operators & easy access to the engine & cabin for carrying out periodic maintenance. JCB machines can now be remotely monitored real time, via its advanced ‘Livelink’ telematics system. JCB India plans to foray into Nepal, Arunachal Pradesh in North East India, Leh & Kargil in J&K. This expansion will add up to a total 700 outlets by end 2017. JCB currently has over 650 outlets & 63 dealers across India. With over 2,25,000 customers, JCB is a leading manufacturer of backhoe loaders in India. These machines are not only sold in India, but are also exported around the world. Inherent design, reliability, product quality, & a world class product support, has ensured that we remain close to our customers. JCB machines are known for best-in-class productivity, efficiency, & technologically advanced features. Our aim is to offer products which help in improving our customers’ business & hence, JCB has always been on the forefront of design & technological innovations. Latest being the introduction of telematics in the Indian ECE industry.

We introduced Livelink, an advanced telematics technology which enables our customers in better fleet management. It maximizes the productivity of machines by providing real time alerts on service, operation, & security benefits to machines owners. Over 40,000 Livelink enabled machines are successfully working in India. Introducing this technology on this scale in the Indian market is another step towards our endeavor to always provide the best in class, technologically advanced products, to our customers.” Jasmeet Singh, Head - Corporate Communications & External Relations, JCB India Ltd.

Escorts CE (ECE) is India’s homegrown global player who launched their backhoe in the mid 1980s. With an eye on harsh operating conditions, it launched its new 4x4 backhoe loader, Jungli, in October 2016. True to its name, Jungli has a commando type livery & has been designed for rough terrains, excavation of morrum soil, rock breaking, working in slushy underfoot conditions, river bed sand excavation, overburden excavation in stone mines, etc. Its structure & the bucket has been redesigned for tough applications with high dumping & ground reach & digging depth. Their breakout forces are much higher than most competitors, ensuring high productivity in rough terrains with minimum failures. The Jungli’s 4-wheel drive makes it suitable for all types of harsh terrains. Its engine is turbocharged with an inline fuel pump. The eye-catching combat color of a battle tank gives it a rugged look, making the product an attractive & competitive value proposition. An owner can monitor his machine through its Equipment Monitoring System (EMS) to ensure that the desired deliverables are in line with the expectations/promise made by the manufacturer. The initial response to Jungli has been extremely encouraging & ECE is optimistic about Jungli carving a niche segment for itself. Having crossed the magical figure of 30,000 Units per annum, there will be some growth for a couple of years where after market will plateau for a while as the machine park will reach a point of saturation. Notwithstanding the point of saturation, a sustained market demand of 25,000 plus is decent enough. It won’t be an overstatement to say that price remains the single most influencing factor driving the sales of backhoe loaders. Machine performance by way of operating cost & reliability does play its part when there is not much to choose on the price front.

ACE is another Indian major who’s AX 130, Digmaster backhoe loader is an extremely reliable loading & excavating, fuel-efficient machine with two & four wheel drive options. ACE’s strategy is to offer it as a package along with its range of road CE. As an Indian OEM it is attuned to the local market & its loaders are geared to various application requirements of local contractors. It has a strong service network of 100 dealers across the country, which are fully equipped to provide genuine spare parts & services by Co.-trained engineers in Faridabad. Almost all the international players in backhoe have their manufacturing facilities in India & are using aggregates manufactured in India only. We in our backhoes use internationally compatible & best suitable & acceptable aggregates like engines from Kirloskar, transmission from Carraro, hydraulics from David Browne, Walvoil etc., & with the kind of all India network of our well-equipped Dealerships & ACE’s own Regional Offices (more than 100 locations) & the most modern manufacturing facilities & CSIR certified R&D facilities, we are more than confident about our product Quality & ability to serve in the shortest possible time.

Structural Strength

Case CE latest offering CASE EX Series loader backhoes are powered by S8000 engine & deliver powerful performance & fast response time coupled with a 5% higher productivity & fuel savings of up to 13%. They are re-engineered from the ground up to deliver industry-leading backhoe breakout force, greater loader lift capacity/reach & best-in-class cab visibility. The new EX Series Backhoe Loaders have robust robotically welded two-piece structural frame design that results in great stability, performance & serviceability. Large box-section structures in high-stress areas such as the boom nose, foot & cylinder, enhances the machine’s durability. The new heavy-duty front axle with double effect steering cylinder ensues all wheels remain in contact with the ground even on the roughest terrain, ensuring exceptional stability & reliability. The S-styled backhoe boom delivers excellent breakout forces. It has a superior working range & reaches deeper than any other backhoe loader. CASE also provides a choice of two configurations: a standard dipper to reach 4.2 meters & an extendable dipper to reach 6 meters. The power shuttle transmission provides four forward & reverse speeds. The hydraulically shifted clutches allow the operator to change direction & travel speed on the go, while the control valves deliver smooth speed & direction shifts, resulting in smooth & accurate operation. The new tilting engine hood provides excellent access for maintenance. The machine layout has been designed to ensure that all daily service points are easily accessible at ground level, for quick & efficient servicing.

Focused TCO

Caterpillar CAT® 424B backhoe loader has been designed to deliver superior reliability & durability with lower maintenance costs & best in class fuel consumption, thus enabling its customers to optimize their owning & operating costs. Its USPs include load sensing closed centre hydraulics for superior performance at optimal fuel consumption. The pump works as per the job demand & keeps the wastage to minimal level & the engine load at optimal level ensuring lower fuel consumption. In this system, the wear & tear of components is very low which improves the service life of components. The transmission of the backhoe loader is equipped with Cat Power-Shuttle transmission. The gear ratios are engineered to deliver higher rim pull in the first & the second gear. This ensures better loading & dozing performance. Highly fuel efficient engines, reliable & durable drive train, structures, pins, hoses, spacious cabin & ease of maintenance, backed by adequate product support, allow the customers to have higher uptime & productivity through the CAT backhoe loader. Cat backhoe loader is engineered with some of the best in class features like load sensing & close centered hydraulics, which has got much better hydraulic efficiency, thereby ensuring minimal wastage & better fuel efficiency at optimal performance. In addition to that the components are designed keeping in mind the machine duty cycle so as to deliver better product life that exceeds customer’s expectations.” Amit Bansal, Director Sales & Marketing - Building Construction Products India Region, Caterpillar India Pvt Ltd.

Product Positioning

Tata Hitachi is among market leaders in the backhoe segment & has introduced improvements in its two existing models for stronger product positioning. Its TH76 & TH86 models are being extensively upgraded with a focus on improving reliability & optimizing the operating cost. Tata Hitachi machines are supported by genuine spare parts at competitive prices to keep its maintenance & operating costs low. Their central warehouse in Nagpur with 1,30,300 sqft, stocks more than 30,000 items. Strategically located in the central part of the country, this facility ensures that it feeds the dealers warehouses situated throughout the country in the shortest possible time. The Co.’s new warehouse facility at Dharwad has been opened to better serve market demands in South India.

Fully Loaded

LeeBoy India CE plans to increase its loader population by adding value to its 699 loader model by offering specialized attachments which will be indigenously manufactured at its state-of-the-art new plant in Bengaluru. LeeBoy’s manufacturing facilities are in Lincolnton, North Carolina US, Bangalore, India & Canoas, Brazil. The 699 backhoe loader is powered by a turbo-charged after cooled, 99 hp, fuel efficient Cummins engine which has been field-proven on 14t excavators on very heavy duty cycles & tough operating conditions. Hi-performance power-shift transmission from ZF, Germany ensures that when the machine is on a grade, the wheels do not lose power during a gear shift which will occur in all synchro-shuttle models. It has a 4-section, side-by-side aluminum heat exchanger, joystick controls, fully enclosed cabin with very high visibility, return-to-dig, high quality flashing beacons, work-lights & back-up alarm are just some of the added features working on European components like AKG, Safim, Cobo, Hella, Walvoil, Casappa, that delivers higher productivity, ergonomic comfort.

Rural Strategy

Terex is aiming at the rural market where customers are involved directly in infra development. It has 57 dealers spread across the country, all located strategically. Terex backhoe loaders include TLB 740S powered by a 76 HP Engine, TLB 844S powered by a 90 HP Engine, TLB 818 centre mounted machine & TLB 818 S, are powered by Perkins engines. The side shift model delivers high break out force, ideal for functioning in the toughest strata. Terex machines also score on faster digging & loading. The four wheel drive machines deliver superior lifecycle costs owing to their high strength steel structures. They will soon be available with GPS systems for remote monitoring of larger equipment fleet.

More for Less

BULL India rolled out its first backhoe loader ‘BULLSMART’ in September 2011 from its Greenfield state-of-the-art facility at Sulur in Coimbatore. Neither big nor small, it is a smart machine with 28% lesser initial capital investment & 31% lower running cost vis-à-vis popular backhoe loader brands. Due to its faster cycle time & shorter hydraulic circuit, it is capable of similar output with lesser cost resulting in better economics & higher return on investment. It houses the Kirloskar 4R810, 60 HP turbocharged; 4 cylinder engine, & incorporates the Carraro transmission. It holds a 0.23 cubic meter backhoe bucket, 0.90 cubic meter loader bucket with payload capacity of 1,300 kg. The major benefits of the Bull Smart are, shorter cycle time on account of innovative hydraulic circuit, for better productivity. High on savings, low on running costs, it can save approximately 30% directly just on fuel cost. It is also the right solution to counter the rising cost of fuel as it is multi-utility with 39 types of optional application-specific buckets. It is optimized for Indian requirements with bottom-of-pyramid approach for highest affordability & max. usage in additional segments, leading to more earnings. It is the only backhoe which can easily load full body/high body dump trucks by its booster bucket with a dump height of 13 ft on its loader. Booster bucket eliminates the need of making a ramp which is a must for other backhoe loaders while loading onto hoppers of batching plants etc. Bull provides fast service through an extensive all-India service support network; well-trained service teams; & better parts availability. The Co. manufactures a range of other backhoe loaders; Bull HD 76 4WD which has Carraro transmission with integral torque convertor with 2 WD & 4WD drive options available, Bull HD 76 2WD which has Carraro transmission with integral torque convertor. It has a power steering with 2 WD & 4WD drive options available, Bull HD96 4WD has the Kirloskar 96 hp engine with gross power of 71.6 Kw & Carraro transmission, Bull HD 100 has a Euro III diesel Perkins engine & ZF power shift transmission with integral torque convertor, Bull Smart Loader 60HP Backhoe loader has a Kirloskar 44.8KW (60 HP) engine. It has a Carraro synchro shuttle transmission with integral torque convertor; Bull HD 76 Loader has Carraro transmission with integral torque convertor. It has a power steering with 2 WD & 4WD drive options available. Bull is aiming to become a major OEM in ECE equipment not only in the Asia but also Latin America & Africa.

Aftermarket Focus

Mahindra CE is the latest entrant in the backhoe loader market. Its EarthMaster backhoe loader represents the auto giant’s foray into manufacturing heavy-duty CE. It is the result of 36 months of development, & offers best-in-class power, superior fuel-efficiency, & meets USA Tier III emission norms, the most demanding in the world. Made for the world-class performance, it has been field-tested for over 20,000 hours in the harshest terrains, & comes with an intelligent communication system that relays information on its operation, coolant temperature, & diesel level directly to your mobile phone. Mahindra EarthMaster Brand is available in 3 variants: EarthMaster VX, EarthMaster SX & EarthMaster 4WD. For monitoring & maintenance its telematic system REMOTECARE, has built-in intelligent sensors capable of sensing & detecting critical faults in time & by giving an advance warning to the owner to help maintain the health of the machine. Since it is preventative in nature, it helps to prevent major breakdown. The system also sends out an SMS to the Service call centre of Mahindra CE which in turn informs the nearby dealer about the same. Optimum utilisation of the machines is also being warranted by faster parts availability & support through its dealers & also from the dealers of other businesses in Mahindra. The Co.’s new ongoing service improvement project will further help its customers to leverage its services. Mahindra manufactures SX & VX backhoe loaders under the EarthMaster category of earthmoving equipment. The Mahindra Co.’s CE business is supported by a wide network of 60 dealers catering to more than 400 districts across the country.

Future prospects

Due to the very nature of this multitasking machine, backhoe loaders will always dominate in terms of market share among all CEs. They will register max. demand among all CEs. But most importantly, India will set the standard for backhoe loaders in emerging markets, considering that many OEMs are ‘Making in India, selling globally’. Due to very nature of this multitasking machine, backhoe loaders will always dominate in terms of market share among all construction equip’s. They will register max. demand among all construction equip’s. But most imp.ly, India will set the standard for backhoe loaders in emerging markets, considering that many OEMs are making in India, selling globally. With a huge existing population of machines in the market & project demands still to pick up, demand outlook remains grim in the short term, at least. Backhoe loader market is shrinking. Customers are opting for either wheel loaders or excavators instead of multipurpose machine. Moreover, a huge population of backhoe loaders is available in the market. Challenge would be to differentiate product from competitor. However, in the next few years, the size of the Indian CE industry, by volume, will begin to approach that of Europe. India along with China & Brazil is poised to be one amongst 3 large & growing CE markets globally. This has led to various new players entering the industry. The country is going through a turnaround phase of its infra. dev., & backhoe loader is a machine which is known for its versatility always takes the centre stage. Unique to India, backhoe loaders will continue to be the star product for the earthmoving & construction equip. industry. In fact, this equip. has educated the world of its multifaceted capabilities in support of infra. construction in probably the most innovative applications to achieve the desired construction speeds at economical costs. Now it will play a similar role in the rural dev. of India. Rural roads & rural infra. prospects are very imp. in driving the revival of backhoe loader industry.

There seems to be a new urgency for action in the equipment zone as witnessed by the slew of govt initiatives to reform procedures & policies around infra investment, which in turn has spurred the fast tracking of projects. There is a new emphasis on fast tracking ambitious infra development programs like Smart Cities, Swachh Bharat Abhiyaan, Clean Ganga, National Highway projects & rural road & irrigation schemes that will spur backhoe loader sales. The ongoing air of optimism also derives strength from a recent report by the London-based Off Highway Research. The consultant has assessed that the sales of backhoe loaders in India could jump from 21,192 units sold in 2015 to 28,000 machines by 2020, a growth rate of about 32%. Notwithstanding those predictions, no one expects the leap in sales to cross the high-water mark of the 33,595 machines sold in 2011, & the prevailing mood of ‘let’s wait & watch’ leads India’s CE sector to toe a cautious line. Backhoe loaders account for close to 50% of all CE sales in unit terms. At the current estimate there are nearly 200,000 backhoe loaders deployed across the country in various projects. Most of them in operation are manufactured in the country by the OEMs. Apart from domestic sales, manufacturers have also been eyeing exports with up to 2,171 units contributed last year. & with more required to join the equipment line-up, this should mean increased business for established players like JCB, Caterpillar, CASE India, Terex, Komatsu, LeeBoy, John Deere, not to mention the new challenger in the backhoe space; Mahindra, with its EarthMaster series. The backhoe is not just the most ubiquitous CE in India due to its multiple applications & uses but one which is progressively evolving with every trade show.

With a huge existing population of machines in the market & project demands still to pick up, demand outlook remains grim in the short term, at least. Backhoe loader market is shrinking. Customers are opting for either wheel loaders or excavators instead of multipurpose machine. Moreover, a huge population of backhoe loaders is available in the market. Challenge would be to differentiate product from competitor. In the next few years, the size of the Indian CE industry, by volume, will begin to approach that of Europe. India along with China & Brazil, is poised to be one amongst three large & growing CE markets globally. This has led to various new players entering the industry. It is expected that the CE industry to become hyper competitive with constant pressure on existing players & new incumbents to continuously improve their value proposition & cut costs. The high margins that have traditionally been earned by market leaders will come down. The country is going through a turnaround phase of its infra dev, & backhoe loader is a machine which is known for its versatility always takes the center stage.

After a 3-year lull, backhoe loaders are expected to see a pickup in business volumes. Across the Great Indian Dust Bowl, the market for the good old tractor-digger, aka the backhoe, has fast begun to gather pace. After a 2-year lull in the construction & infra sector which saw a slowdown in both scale & speed of project implementation, & a decline in CE hire & purchase, Indian backhoe loader sales is slated to pick up momentum along with the green shoots of economic recovery. This found reflection overseas through a milestone achievement in Feb this year when global digger giant JC Bamford Excavators Ltd, to mark its 70th anniversary rolled out its limited batch of special Platinum Edition 3CX backhoe loaders from production lines at its world headquarters at Rochester, UK. Understandably JCB, which introduced its backhoe loaders in India 37 years ago its factory in Delhi NCR is now a global hub for production is expected to play a leadership role. The intent for a long innings ahead for the backhoe loader was set at Excon in Bengaluru last year when the Co. showcased its new “ecoXcellence” range. A market leader, JCB India offers a range of backhoe loaders with 5 variants designed for multiple applications. These range from the Compact 2DX, the bestselling 3DX with the variants; 3DX Xtra & the 3DX Super; & finally, the larger 4DX. All these machines come with a variety of attachments to suit the varied needs of customers. The govt’s renewed thrust in the infra segment has led to a considerable increase in the demand for backhoes which are the most widely used equipment in the country. JCB has been a major contributor to the Make in India cause through its products which carry with them cutting edge technology & versatility.

The Indian construction machinery market is still on an uptrend: after an exceptional gain of 34% in 2016, the German Engineering Federation (VDMA) determined a still very considerable growth of twelve% for 2017. And also the start of 2018 was extremely positive, as the first months witnessed a strong sales performance. IBEF provides an indicative value here. Established by the Indian Ministry of Commerce & Industry to promote the international brand & location marketing activities, the trust estimates that in the Indian fiscal year of 2018, almost 97,000 construction machines were sold throughout the country. Biggest ever highway development plan approved In general, things are looking good for the second most populous nation after China worldwide. Looking at the World Economic League Table 2018 published by the Centre for Economics & Business Research, India will overtake the UK & France in terms of the GDP to move 2 places up & become the world’s 5th largest economy in 2018. The development in the construction machinery market is mainly driven by the states massive infra expansion. According to Off-Highway Research this expansion is a top priority for the GoI that monitors all projects at highest level to overcome potential obstacles as quickly as possible. At the very top of the agenda is road construction. In Oct’17, the Indian politicians hence approved the biggest ever highway development plan to develop & expand almost 84,000 kms of roads at an investment of USD 107 bn by 2022. According to the experts quite a few foreign CoS managed to conquer significant market shares, competing with the domestic & dominating bulldozer manufacturer BEML. Also the real estate market primarily housing sends out positive signals: IBEF assumes that it will grow from an estimated USD 126 bn in 2015 to USD 180 bn in 2020. In the Indian construction machinery market, crawler excavators & backhoe loaders remain a mainstay. According to IBEF these two types are expected to account for 68% of the units sold in 2018. With an increase of almost 6% over 2015, crawler excavators are estimated to yield the highest growth rate. Backhoe loaders find their application in a wide range of end-use industries, including construction & mining remain the largest end-use sector, accounting for nearly 53% revenue share of the market in 2016. Moreover, construction activity in Tier II cities & declaration Smart City program are anticipated to provide an impetus to overall CE sales in India, which in turn, is expected to have a crucial impact on prospects of the global market. According to expert survey reports, the demand for backhoe loaders from the agriculture & forestry segment is expected to remain steady, growing at 5.8% CAGR through 2026. Keeping all these innovations & growing demand for backhoe loader in the global market in mind, one can safely conclude that the backhoe loaders are here for an up surging rise.

 

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