In spite of the current economic slowdown, backhoe loader market is going to bounce back soon and Bobcat is venturing into this potential market in India. Hyunsoo (HS) Kim, Director-Commercial, Doosan Bobcat India, shares more on the market scenario and the company's plans.
The economy is on a slow growth path this year. What will be the impact of this on construction and the backhoe loader markets?
The whole construction industry and backhoe loader market is expected to be down by 30-35 per cent compared to last year's sales numbers as per the inputs and forecast from various sources in the industry. Construction sector is slow because of unsold inventory of housing units. Also new housing projects are resulting in a situation of supply being more in comparison to demand. Government delay in paying contractors for projects is also affecting the segment.
This is likely to have short term impact on construction equipment including backhoe loader market as well. Economy is likely to rebound with various government initiatives and improvement in rural development and infrastructure.
We would still like to go ahead with our launch of the backhoe loader and seed our machines in the market and hope to have better acceptance and gain market share when the market rebounds.
We understand that Doosan Bobcat is about to launch backhoe loader in India. What are the major objectives while launching backhoe in an already cluttered market?
Also tell us about your expectations. We want to expand our product offering in the compact construction equipment market in India. With India moving towards becoming a developed economy, development of rural area, increase in urbanisation and labour cost will be inevitable. All these are bound to drive demand for compact equipment. As the requirement grows, backhoe loader becomes the key product with an annual industry size of 40,000 units. Globally, Bobcat is an unbeatable top player in compact equipment market and our vision is to become the top in India as well. This is possible only when Bobcat enters the backhoe loader market. This will give us the solid and steady demand needed for any new manufacturing facility which will help us in ramping up with other backhoe loader models and other compact equipment products in future.
There was a similar belief in the Middle East that the backhoe loader market was already cluttered and there was no space for a new entrant. But Bobcat has been able to break into the top tier very quickly within two years of launch. Although India is a different market, we believe that as long as the product is reliable and productive, the customers are willing to support. We are confident that we will replicate our success in backhoe loader in India as well with the help of a well-designed product backed by good commercial strategy. We would like to be a key player in backhoe loader market.
Have you introduced any new features or designs that will enhance the utility of the backhoe loader?
Fuel efficiency, performance, durability, operator comfort and low operating cost were the key focus areas in consideration while designing and developing our B900 backhoe loader. Some of the highlight features in this backhoe loader are best-in-class digging depth, higher dumping height, maximum torque and excellent ground clearance. In addition to fuel efficient engine, hydraulic system has been designed to ensure low power consumption from engine by redirecting excess hydraulic flow to tank when application doesn't require more flow, resulting in low fuel consumption. Another unique feature is hydraulic distribution box. This minimises hose movements in backhoe hydraulics and increases hose durability by avoiding hose rubbing and reducing the hose length. Large cooling system with high efficiency fans have been provided for increased cooling efficiency for uninterrupted operation.
Cushioning cylinder has been provided for boom and swing. This ensures smoother operation while reducing the noise and vibration which also increases the durability of major components.
For backhoe loader customers, operational economy plays major role rather than costly features. How do you look at the after-sales services as a key in this direction?
Yes, total cost of ownership plays a big role in the buying process. It is a combination of regular maintenance, right priced parts, fuel efficiency, and quality components which results in longer life of the machine and the durability factor.
It also includes the components such as financing offering with the best interest rates. In all the whole cumulative offering becomes the total cost of ownership. The after-sales services such as parts availability and maintenance become crucial to the customer. Downtime of the machine affects the customer's overall productivity and with our dealer network, we support the customer with quick resolution of their query.
With projects are growing bigger in scale and execution period getting shorter, contractors may use more of excavators and wheel loaders in the place of backhoe loaders for better productivity and faster execution. Will this impact backhoe loaders?
Backhoe loader is one of the most versatile machines. In construction sites, preference is for multi-purpose machines due to requirement of different job applications. Backhoe loader also comes with higher engine power options, four-wheel drive, and productivity mode of operations which improves the pace of work. It can be driven on road and within sites faster, thus making the transportability of the machine better. We still feel that backhoe loader will have significant edge over excavators and wheel loaders, and remain the most popular and largest selling construction equipment in India.
Since backhoe loaders are dominant in Indian market, strengthening domestic market is important for the segment. What are the steps needed in this direction?
Backhoe loader still predominantly remains popular in urban areas. Given the fact that backhoe loader is versatile and can be driven, we feel that there is a huge potential in rural regions. A lot of developments are happening in terms of power connectivity, internet connectivity, roads, piped water supply and infrastructure. In order to tap this, we need targeted marketing initiatives to educate customers about our product and attachments that can cater to different applications.
How do you look at the future market for backhoe loaders?
Backhoe loaders are the most versatile equipment and the machine can be driven on road and doesn't need separate transportation. This aspect makes it the most popular construction equipment which explains the annual sales volume.
In future, with government initiatives and major projects of piped water supply to every household, ongoing rural road development and housing for everyone, we feel that demand for backhoe loader is going to remain strong.