With the construction activity picking up and mining operations reviving in India, new opportunities are knocking at the doors of the wheel loader market. Providing modern technologies at competitive prices and reliable after-market services will be the key to success for wheel loader OEMs.
The wheel loader is one machine that finds applications in mining, construction, ports and industry. With the demand from various segments growing, wheel loaders are being introduced with advanced technologies that allow equipment operators and owners to work with greater productivity, efficiency and safety.
The wheel loader market in India is growing exponentially, with the sales crossing 3,000 units in 2019, according to research reports. According to an Off-highway Research forecast for 2017-22, the wheel loader market will to grow 26 per cent to 3,500 units in 2022 from 2,781 units in 2017.
How is the wheel loader market doing currently? Surat Mehta, Business Head - India, SDLG says, "The wheel loader market is doing reasonably well in 2019, unlike other construction equipment where the market is witnessing a drop of around 15 per cent compared to 2018. The market has been stable and is maintaining almost similar market size to 2018. Sales are expected to be better in the last quarter of 2019 and the financial year should close with a marginal growth over 2018 sales."
According to Nischal Mehrotra, Director - Sales & Marketing, LiuGong India, the market for wheel loaders is witnessing fresh traction due to buoyancy in road construction and quarrying. "Fresh off-take of coal due to a surge in thermal power production is adding to the demand. In the present market scenario, wheel loader sales are pegged at around 3,000 units by the end of 2019. The 3-tonne category continues to dominate the market with 80 per cent share, while the 5-ton has a 15 per cent market share."
Vivek Hajela, General Manager and Head - CEB, Larsen & Toubro, says, "We find that the demand for 3-3.5-tonne payload wheel loaders grew at a healthy rate of 28 per cent, which constitutes 78 per cent of the wheel loader demand. The 5 tonne-class wheel loader finds application with large mining and material handling contractors, especially in coal mines. We expect this trend to continue, with the 3-3.5 tonne-class of wheel loader growing at healthy pace in the near future, while 5 tonne will find its space alongside and grow in certain segments and applications. We also offer Komatsu model WA380-6 in this segment which is imported from Japan as a completely built unit."
VG Sakthikumar, Managing Director, Schwing Stetter India, says, "The wheel loader market has been progressing at 22.70 per cent CAGR for the last three years until 2018. It is expected to continue growing. In the future, we expect backhoe loader customers to migrate to wheel loaders for better productivity. We sincerely hope this changing trend happens soon in India. The key trends are 1.8 tonne, 3 tonne and 5 tonne and of late, we are finding a shift towards 4 cu m and 4.5 cu m buckets to complete projects faster."
Demand drivers and application segments
Mehta says, "Different segments require specialised products, like for mining and ports where the dominant requirement is for large capacity wheel loaders, and we cater to that market through our Volvo range of wheel loaders. And for ports, we also serve the demand with our 3-5 tonne range of SDLG wheel loaders - we have four offerings in the SDLG range - while for material handling in railway sidings and in mining applications, we supply our 3-5 tonne SDLG loaders. Construction, warehousing and industrial requirements need a 3 tonne wheel loader, which we provide with our L933 and L936 wheel loaders."
According to Mehrotra, being entirely loading equipment, wheel loaders are structured to undertake various loading applications, be it for the construction industry for loading aggregates, mining for moving overburden or aggregates, or for the port stevedoring industry to remove and load iron ore or other bulk cargo.
"There has been excellent demand from mining, ports, construction, warehousing and industrial segments in the past 2-3 years. The growth in infrastructure development has led to faster growth in general construction and material handling at quarries. It constitutes almost 50 per cent of the sales volume, followed by coal handling at pitheads, railway sidings and at ports. The segment constitutes about 22 per cent of the demand, while approximately 10-12 per cent is from mining. The demand for wheel loaders in raw material handling and in warehousing operations is increasing, and at present, about 10 per cent of machines go into these segments. We expect infrastructure development to continue to dominate the demand in the near future and expect growth rates of 10-15 per cent over the next three years."
Sakthikumar elaborates on the applications of XCMG wheel loaders in various segments. "In mining segment, they generally operate under the toughest working conditions, both in terms of operation and environment. Wheel loaders from XCMG in this segment mostly come in more than 5 tonne. Applications require additional air filtration set-up, automatic lubrication, a GPS device, etc. In ports, XCMG wheel loaders are mostly used to handle coal. So the loading bucket will be replaced to handle coal. Since the loaders work in a fine-dust environment, double air filtration set-up is recommended. Loaders of 5-tonne capacity are used in this area.
Construction sites mostly refer to RMC sites. XCMG wheel loaders in this segment are generally the standard configuration. Additional air filtration and centralised automatic lubrication are optional accessories. Since blue metals and sand are handled in these sites, general-purpose buckets with wearable inserts are preferred.
XCMG loaders in warehousing and industrial segments are used as stackers. Attachments such as the tyre handlers, forks, grapplers, etc are used in place of the standard general purpose buckets.
What customers look for Hajela comments on customer behaviour, "Indian customers are very discerning when it comes to choosing a wheel loader. They give a lot of importance to reliability and durability as well as after-sales service. In addition, the operating cost of the machines in terms of fuel consumption and maintenance are critical from the customer point of view. Rental customers who deploy hired machines look for economical operations, lower fuel consumption and higher availability of the machine. However, captive users and contractors give weightage to productivity, speed of operation, operator comfort and safety, fuel consumption and a machine which can reliably work for 20 hours a day. Most of their jobs have stiff penalty clauses for non-performance. Hence, this category of customers is generally quality-conscious and is willing to pay a premium for state-of-the-art equipment.
According to Mehta, customers are primarily looking for a reliable OEM partner, besides lower fuel consumption, ease of maintenance and reliability of the products. Capital spend of the initial purchase of course remains an important part in purchase cycle.
Sakthikumar adds, "The foremost consideration is the brand and the OEM aggregates that are used in the machine. These should be reliable and have a proven track record in the market. Next is the emission standard of the engine. Operators also look for comforts such as AC cabin, automatic transmission, sensitive hydraulics, safety features such as the ROPS and FOPS cabin, first-aid kit, and emergency function cut-off. Also considered are fuel efficiency and low maintenance, with smaller sump capacities and longer change intervals of lubricants. Of late, loaders are used by rental companies. Also, use of IoT, telematics and GPS is an emerging trend."
What makes a wheel loader productive and what are the factors that impact its efficiency? A wheel loader's bucket is the most important part of the machine, as it has a major effect on productivity, machine uptime, and performance in aggregates operations. Selecting the bucket will depend on the type of material and operation that the wheel loader is to perform. As per the application needs, one has to select the bucket type, teeth and cutting edges. The selection of a wheel loader with the right bucket type will optimise productivity, machine uptime and operational performance.
Mehta elaborates on more features, "Improving the engine and hydraulic efficiency of wheel loaders with the use of electronics and introduction of diagnostics tools and telematics are other areas of innovation. Wheel loader designs are becoming more operator-friendly as operator comfort has a direct relation to efficiency."
Mehrotra elaborates on the features and standards in LiuGong range of wheel loaders: "LiuGong has its own joint ventures (JVs) for important components like engine and transmission with Cummins and ZF respectively. This results in a perfect match for our machines, resulting in less fuel consumption. Also, being the world's largest wheel loader manufacturer, we have cost advantage too. Lastly, all our machines come with CRDi electronic engines, GPS, rearview camera, and tubeless tyres as a standard fitment."
Hajela explains the new features in L&T machine range: "We have fitted our machines with the recently-launched DigiEye, in line with our corporate guidance of enabling digitalisation. DigiEye will provide operational inputs like the utilisation of the machine on a 24-hour scale, the location of deployment, alerts for timely maintenance and prevention of breakdown. This feature will guarantee higher machine uptime and improved operator performance. Most of the manufacturers are working on these features to bring about improvement in the performance of their machines."
Preparing for new emission standards
Construction equipment manufacturers are working to meet the new emission regulations that will be effective from October 2020. This will be challenging for the equipment players in terms of meeting the norms while for customers, it will mean shelling our more money for the new features and technologies. How are wheel loader OEMs preparing for to meet the requirements? Mehta says, "Our products are presently under testing and we shall be ready with our SDLG range before the new emissions norms are implemented." Mehrotra adds, "Our R&D team is already on the job and is testing the machines for new emission norms. We would ready with a new set of machines well before October 2020."
Hajela says on the preparations at L&T, "We are closely working with our engine OEMs to meet the deadline, with all approvals in place. It is certainly challenging as we expect a rush to get the equipment and engines certified from the authorised agencies suchas ARAI."
After-sales support is important for customer satisfaction, prolonged customer relations and brand value. In spite of the quality and richness in features of a product, if a brand is not providing the right service for the product, it is sure to fail in the market. So every manufacturer is keen to provide effective after-market support through various means.
Mehta explains,"Apart from the warranty services to our customers through our channel partners, we have become closer to the customer with the expansion of our network. Today, we have 19 channel partners which operate the parts and service outlets closer to the customers. We provide special training to the operation and maintenance staff of our customers as part of the Skill India initiative. Customer service contracts to meet customer-specific needs are also offered."
Mehrotra says, "We have a network of 21 dealers with over 60 touch-points pan-India to support our customers. Most of our touch-points are located strategically near customer sites, where we have large fleet of machines."
Says Hajela, "We are a player who believes in "In services lies Success' and have made huge investments in developing large service centres at Bahadurgarh (near Delhi), Kanchipuram, Durgapur, Singrauli, Nagpur and Pune. This enables us to provide unparalleled service to our customers wherever their jobs take them throughout the country by extending quality service."
L&T has set up a large dealership network nationwide to look after the machines on daily basis and to provide parts support closer to the customer's place of deployment. The firm has a network of 31 dealers in India and Nepal and has over 100 service and parts outlets. "We have recently launched a customer-care feature called L&T EquipCare. The customers can call this number from anywhere to register their service requirement. These calls will be attended in 24 hours and feedback given to the customers. We have kept a target of restoring the machines within 3-4 days depending on the criticality of the breakdown," Hajela adds.
Schwing Stetter provides services such as annual maintenance contract (AMC), operator training and extended warranty periods. Sakthikumar says, "We are known for a strong aftermarket support to our customers and that is the pillar of our relationship. Schwing Stetter India has 27 sales and 30 spares offices and 10 service centres. We have more than 400 service engineers. In addition, we have a project department, service and spares sales and training centre. The training centre was recently accredited and certified as the first-ever training centre to certify pump operators under the Pradhan Mantri Kaushal Vikas Yojana through National Skill Development Corporation in India, which strengthens us even more."
The increasing construction and infrastructure development in the country and the reviving mining operations are opening up new avenues of growth for wheel loaders. OEMs are bullish on the growth prospects of wheel loaders in the country. Mehta says, "As per our assessment, the wheel loader market will continue to grow at a CAGR of around 8-10 per cent for the next five years. Road infrastructure activity, increased port functionality and minerals mining will remain the demand drivers for wheel loader market."
Mehrotra sees opportunities in quarrying, aggregates, block handling, material handling, civil and building construction, and recycling/waste handling. "Mining and power projects, once opened up, would also contribute to the growth especially in higher tonnage loaders," he adds.
Hajela is also confident about fresh opportunities in the market as he observes, "As India marches ahead to become a $5 trillion economy, we expect a lot of focus on infrastructure development, urbanisation and capacity addition in power, steel, cement etc. This would mean tremendous growth opportunities in the areas of mining and processing of minerals and their handling at various stages. There would also be necessary imports of minerals through our ports. We expect blue metal aggregates, coal, stevedoring, general construction and raw material handling in process industry to be the key drivers."
According to Sakthikumar, RMC, tunnelling, mining, road, railways, metros, crushers, power, cement, airport, real estate and commercial building construction are the opportunities and growth drivers for wheel loaders in the Indian market.
As the government is gearing up for a lot of action in the coming years for the development of the country, it is imperative for equipment manufacturers to contribute by providing affordable matching technologies needed for the infrastructure development of the country. For wheel loader manufacturers, the success will be measured by how economical and productive the machines will be for the customers.