With a turnaround performance in 2016, the market for backhoe loaders is set for a sustainable growth in the coming years. Equipment India explores the current market sentiments and future growth prospects in interaction with the industry.
Given its versatility and mobility, backhoe loader finds great use at almost every construction site, both urban and rural India. This multi-purpose machine continues to perform a variety of tasks at sites and is used for digging, dosing, levelling and lifting activities. Backhoe loader perhaps has the widest scope of applications in various infrastructure development activities. Sales in this category declined during the past few years due to the overall decline in the industry. However, 2016-17 has been a turnaround period with the overall construction equipment (CE) market has bounced back. According to the latest Off-Highway Research update, CE sales in India grew by around 40 per cent last year, with double-digit increases to follow in 2017 and 2018. This should see sales volumes beat the previous record of 72,197 units, which was achieved in 2011. The announcements in the Budget 2017 is expected to boost the sales of backhoe loaders once the projects are in execution mode.
With the infrastructure projects gathered momentum in the past couple of years, overall sentiments in the construction equipment is positive and backhoe loader has no exception. According to Jasmeet Singh, Head Corporate Communications and External Relations, JCB India, the backhoe loader has played an important role in the development of India's infrastructure. 'JCB pioneered the concept of backhoe loaders almost four decades ago in India and till date, has sold over 2,25,000 backhoes in India. It continues to be one of the most widely used construction equipment in India.'
Abhijit Gupta, Brand Leader-cum-Managing Director, Case New Holland Construction Equipment India feels, 'Considering the CE industry witnessing a growth, there is an upswing in the demand of backhoe loaders in India. Given the infrastructure sector development and construction activities including new roads, ports, canals, flyovers, railway tracks, buildings etc, there will be increasing demand for construction equipment.'
As per a recent research report, India will continue to be the largest and profitable market across the world, for backhoe loaders, growing at 6.9 per cent, higher than the 5.9 per cent global CAGR - through 2026.
Gupta explains further, 'The flux in demand for backhoe loaders is correlated to the construction and infrastructure development, further impacting the construction equipment market within the country. Contributing to the growth is also various investment-friendly initiatives, investment-friendly policies and financing schemes introduced by the Central Government in India.'
After a negative growth for three years, backhoe loader volumes started a steady climb up, is what Rajinder Raina, General Manager - Marketing, Escorts Construction Equipment, observes. He adds, 'Approximately 22,000 units were sold during the fiscal 2014-15 which rose to 23,000 during 2015-16. The just concluded financial year 2016-17 witnessed a sale of approximately 31,000 units. This is a whopping 34 per cent growth which beat the most optimistic of the projections. Current year will not register such a robust growth but the volumes will cross 33,000 units, which will be one of the best ever. The empirical data spells out the turnaround in growth in so many words.ö Amit Sharma, General Manager, Action Construction Equipment, also sees a complete turnaround of demand growth as he comments, ôGrowth returned to the industry after an elongated pause. The year 2016 saw growth return to the construction equipment industry after many years, with the industry growing at over 40 per cent compared to 2015. Demand for backhoe loaders also grew by 40 per cent, backhoe loaders account for 65 per cent of the earthmoving equipment and road construction segment.'
Says Amit Bansal, Sales & Marketing Director - Building Construction Products, Caterpillar India, 'The backhoe loader industry declined year on year from 2012 till 2015. In 2016 fortunately there was a turn around and industry witnessed a growth of about 40 per cent over the previous year and the industry reached an estimated level of around 30,000 units. This growth is expected to continue in coming years, though it will be not feasible to grow at the same pace.'
The progressive construction and infrastructure development activities in the right direction has brought in a new vigour in the equipment segment. According to Singh, the overall earthmoving and construction equipment industry grew at 43 per cent in 2016 as compared to 2015 after a period of sustained contraction, which lasted for about four years. From 36,798 units sold in 2015, the market increased to 52,462 units and this significant growth includes seven leading product categories, backhoe loader being one of them (source: ICEMA).
'Government's thrust on the infrastructure sector is one of the prime indicators for growth. Significant budget allocation towards the infrastructure sector is another positive sign. Also, the projects that have been announced in different sectors such as roads and highways, railways, ports, irrigation etc, should give momentum to the infrastructure activity, which will lead to an increase in the demand of all earthmoving and construction equipment, including backhoe loaders,' Singh explains.
Sharma hails the budget initiatives by the government, 'With the budget out early and Rs 3.96 lakh crore is being allocated for infrastructure (road, railway and port construction), agriculture and real estate with emphasis on affordable housing projects continue to be listed, as a result we are expecting high demand for backhoe because of its multiple application.'
Gupta explains, 'The infrastructure industry being at the forefront of the budget, sentiments are becoming more positive, as time passes, the long term outlook for the Indian market is promising with huge potential.'
According to a recent research report by Persistence Market Research (PMR), the global backhoe loader market is set to reach $ 4 billion by 2026. Keeping in mind the wide range applications of this equipment across industries including construction and mining, utility, and agriculture and forestry, there is definitely an upward growth. Additionally, construction and mining industries continue to be amongst the key contributors to the growth, accounting up to 53 per cent revenue generation for backhoe loaders in 2016. With various initiatives like Smart Cities, Make in India etc and the infrastructure development across tier II and tier III cities, it is expected to increase the volume of sales of backhoe loaders in India.
Highlighting these positive trends, Gupta states, 'We strive to provide best-in-class quality products in terms of reliability, durability, fuel efficiency and operator comfort basis the needs of the Indian market. This has further helped us provide value for money to the customers and garner good traction in various key markets in India.'
Raina is focusing more on sustainability as he comments, 'More than the growth, the industry is looking for sustenance of the demand/volumes. Monsoon promises (forecast) to be good which is very important for the demand. The biggest contributors in infrastructure development are roads, highways, railways and Metros. As the Smart Cities take off, there will be traction in demand. Budget allocation of approximately Rs 64,000 crore for roads and highways means life blood for projects.ö According to Bansal, the 2017-18 Union Budget saw continued focus on the infrastructure sector which is evident in the total outlay of Rs 3,96,135 crore that has increased by 10 per cent over the FY17 revised estimate. 'Based on the above allocations, better days could be expected ahead for the road construction, railways, housing and other infra sectors. India has been constructing highways at a rate of 27-28 km per day, with the aim of increasing the construction rate to 41 km per day within this year and further higher rates in the coming times. Some of the other factors that would help in the growth of backhoe loader market are speedy clearance of the projects, Clean India drive, skill development initiatives, upcoming GST roll out etc,' he observes.
Backhoe loaders are considered as the backbone of rental market in India due to their popularity in whole gamut of construction activities. However, India traditionally has a lower presence in rental market compared globally. Says Sharma, 'India's earthmoving and construction equipment financing industry was valued at Rs 23,000 crore. The existing rental access in India is at around 7-8 per cent remains low as compared to the global standards of 50-80 per cent. Leasing/rental of construction equipment is still a very fragmented industry in India, but is expected to show strong growth, possibly higher than 30 per cent annually over the mid-term.'
According to Raina, backhoe loaders have predominantly been a rental market which is one of the reasons for proportionately very high volumes of backhoe loaders. 'The current proportion of more than 65~70 per cent share of rental market may go up by a few percentage points in future,' he adds.
Products and technology trends
Backhoe loaders are the widely used multi-purpose construction equipment. According to the user fraternity demands from time to time, equipment manufacturers have come out with updated and upgraded features and innovations to the products.
JCB currently offers the widest range of backhoe loaders in India with five different variants - 2DX, 3DX, 3DX Xtra, 3DX Super, and 4DX. This range is developed to suit different user segments for different applications.
Singh elaborates, 'Our JCB 2DX backhoe loader is the smallest in our portfolio and has been specifically designed to suit the rural applications. While, the large 4DX is the most productive backhoe loader in India and is best suited for mass excavation or digging in hard strata.'
He adds, 'Our new range of backhoe loaders known as the 'ecoXcellence' is 10 per cent more fuel efficient and 30 per cent more economical, thereby ensuring lower operating costs. Apart from the popular JCB 3DX, the three variants of backhoe loader - the JCB 3DX Xtra, the JCB 3DX Super and the JCB 4DX are also part of this new ecoXcellence range.'
One of the noteworthy features in this new range of backhoe loaders is the JCB Livelink, the advanced telematics technology that helps its customers to remotely manage their fleets.
Singh elaborates on the advantages, 'This state-of-the-art technology enables users to get SMS alerts on their mobile phones or smart devices regarding service alerts, operations and security of their machines. The information is available in real time regarding the health of the machine including engines and gives vital information to the customer in terms of number of hours the machine has been operational, service intervals, fuel levels, malfunctions if any, etc.'
On the product range from Caterpillar, Bansal elaborates, 'We have engineered our backhoe loader with some exclusive features which directly improve customer economics. The competitive features comprise load sensing closed centre hydraulics. We are the sole manufacturer to offer load sensing closed centre hydraulics in backhoes in India. This delivers superior performance at optimal fuel consumption. The pump works as per the job demand and keeps the wastage to minimal level and the engine load at optimal level ensuring lower fuel consumption. In this system, the wear and 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 and the second gear. This ensures better loading and dozing performance. Highly fuel-efficient engines, reliable and durable drive train, structures, pins, hoses, spacious cabin and ease of maintenance, backed by adequate product support, allow the customer to have higher uptime and productivity through our backhoe loader.'
Caterpillar is also looking at newer application areas as Bansal explains, 'We are in the process of some newer application areas, where our backhoe loader can deliver best-in-class performance with minimal fuel consumption, overall meeting the customer needs with enhanced profitability.'
Escorts recently introduced the JUNGLI range of backhoe loaders in the market. Raina elaborates, 'Escorts backhoe loader JUNGLI has found great acceptance in Indian and some of the overseas markets where it has been launched. It is a 72 HP, 4x4 wheel drive designed for tough/hard strata with special purpose steel used for the excavator bucket and linkages. This has taken backhoe loader to terrains and applications, which were avoided hitherto. Escorts Digmax II is available in multiple variants with option for a whole range of attachments.'
'CASE EX Series loader backhoes are powered by S8000 engine and deliver powerful performance and fast response time coupled with a 5 per cent higher productivity and fuel savings of up to 10 per cent. They are re-engineered from the ground up to deliver industry-leading backhoe breakout force, greater loader lift capacity/reach and best-in-class cab visibility,' states Gupta.
ACE offers backhoe loaders in 4WD with Kirloskar engine developing high torque with low fuel consumption and Carraro drive, hydrostatic steering for reliability and better control. ROPS (roll-over protective structure), fully enclosed wide view cabin with easy entry and exit from the cabin for operator are features of these backhoe loaders.
Gearing up for future demand With the CE market is growing globally and picking up pace faster in India in particular, major players are working on plans to meet the growing demands in future. Says Sharma, ôWe have a comprehensive plan to target selected geographies of the world, which have a synergy with us.
Action Construction Equipment is already present in some of the SAARC nation. We have a plan to expand our reach in the African and Middle Eastern countries.' Gupta elaborates, 'CASE India sells and supports a full line of construction equipment around the world with equipment and aftermarket support, industry-leading warranties and flexible financing. The company is known for the top class quality products with environment friendly equipments and technologies. CASE engineers are continuously upgrading the equipment and technology to suit needs of Indian customers.'
He further adds,'The company has an extensive network of 65 dealers with over 250 touch points spanning the length and breadth of the country. CASE India has introduced globally followed 'World Class Manufacturingö processes at the Pithampur plant. The company has started exports to developed as well as developing countries that reflect the quality of the products. CASE continues to invest in the manufacturing operations in India ensuring customers in India get access to the high technology products comparable to the best in the world.'
Backhoe loader is one of the most popular equipment at the Indian construction sites as it finds its use in various applications. Singh is pretty confident about the bright future of backhoe loaders as he says, 'Owing to the allocation committed towards rural development in the recent Union Budget, backhoe loaders will find great utility in rural projects, especially in the construction of roads under the Pradhan Mantri Gram Sadak Yojana (PMGSY) and also, in the development of other physical infrastructure such as schools, medical centres etc.'
He adds, 'Rural development projects coupled with government's Swachh Bharat Abhiyaan will drive the demand for this versatile product. Though, with projects getting bigger in size, the demand for specialised machinery like tracked excavators, wheeled loaders etc is likely to increase, but the backhoe loader will continue to find its use in general purpose construction.'
Sharma is also positive on the market outlook. 'Currently backhoe loader is a leading contributing product in terms of numbers in earthmoving equipment segment. Five years down the line we are sure the market size should further increase at 10-15 per cent per year,' he states.
According to Raina, backhoe loader will remain the front runner on volumes front. He adds, ôA steep growth does not look likely but about 10 per cent growth looks highly possible. The demand will hit a plateau after it crosses 35,000 units per annum.' With the versatility in applications, backhoe loaders are here to continue as the most widely used construction and earthmoving equipment. With more activities expected in rural development and urban infrastructure, backhoe loaders will play a mjor role.
Key advancements in the new JCB 3DX ecoXcellence range
- JCB India
Features of CASE EX Series backhoe loaders
The new EX Series backhoe loaders has robust robotically welded two-piece structural frame design that results in great stability, performance and serviceability. Large box-section structures in high-stress areas such as the boom nose, foot and cylinder enhance 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 and reliability. The S-styled backhoe boom delivers excellent breakout forces. It has a superior working range and reaches deeper than any other backhoe loader. The company also provides choice of two configurations: a standard dipper dig depth 4.5 m and an extendable dig depth 5.9 m.
The power shuttle transmission provides four forward and reverse speeds. The hydraulically shifted clutches allow the operator to change direction and travel speed on the go, while the control valves deliver smooth speed and direction shifts, resulting in smooth and accurate operation. The new tilting engine hood provides excellent access for maintenance. The machine layout has been designed to ensure all daily service points are easily accessible at ground level, for quick and efficient servicing.
FPT S8000 engine: The company understands that power and performance are critical to the success of a machine. The new generation engine, developed by Fiat Powertrain Technologies Industrial (FPT Industrial), provides outstanding performances such as faster response time and up to 10 per cent better fuel economy. The S8000 is a 3.9-litre 4-cylinders engine, with a mechanical injection system. It is ARAI certified as BS-III, thanks to its EGR internal technology.
Best-in-class productivity: The new backhoes' styled boom will boost your productivity. The boom delivers excellent breakout forces. It has superior working range to reach deeper dig depth than competitors. The heavy-duty front axle further boosts productivity especially when working in rough terrains. The heavy-duty structures will enhance the reliability and the durability of your machine.
Operator comfort and productivity: This spacious cab has redesigned ergonomics to offer better operator comfort. The large size glazed windows provide outstanding all-round visibility, it improves air ventilation to the operator and it makes easy communication to the back of the machine. All the controls have been specially positioned to offer easy access and faster control. The cabin has a large buddy seat along with storage compartments, mobile charger, document holder, bottle holder and radio.
- CASE India
- Sudheer Vathiyath