28 May 2020

Backhoe Loaders

Strongly ‘Load’ed



India has a teeming population of backhoe loader OEMs, of both Indian and global brands. All are set to capitalise on infra projects being fast tracked by the Government. Only the backhoe loaders loaded with USPs cut out for niche markets can win maximum market share writes, R Kashyap.



Due to the advent of new-age earthmoving equipment, the construction industry has witnessed a continual growth in recent years, especially in India. It is even forecasted by the industry specialists that sales of Backhoe Loaders will expand in the time to come.For more than 40 years, ‘Backhoe Loader’ has been around as common construction equipment in urban engineering and small construction projects. Over the years this construction equipment market in India has gone through evolution. This growth in demand is because of the need and also because of the quality services provided by the companies across the country.



Backhoe loaders find their application in a wide range of end-use industries, including construction & mining, utility, and agriculture & forestry. Construction and mining remain the largest end-use sector, accounting for nearly 53 per cent revenue share of the market in 2016. Frenzied construction activity in Tier II cities, combined with the implementation of ‘Smart City’ program are anticipated to provide an impetus to overall construction equipment sales in India, which in turn, is expected to have a crucial impact on prospects of the global market. Demand for backhoe loaders from the agriculture & forestry segment will remain steady, growing at 5.9 per cent CAGR through 2026.



The growth of the Backhoe Loader Market is majorly driven by the significant growth in the construction industry. The construction industry is generating a huge demand for backhoe loaders for performing various tasks. The use of Backhoe loaders in large, medium, and small scale construction projects due to their versatility and small size, further help in the growth of the market. The increase in adoption of backhoe loaders, the rise in road construction activities, and the number of power projects in developing nations, such as India and China, have also driven the growth of the global backhoe loader market. The inclination of industries towards the use of center-mounted backhoe loaders is an emerging trend of this market. However, high prices of backhoe loaders are hindering the growth of the global backhoe loader market.



In addition to its multifarious utility, the customer-friendly financing schemes introduced now have played a key role in buoyancy for backhoe loader market. It is good news for Backhoe Loaders Suppliers too. Backhoe Loaders Suppliers can enjoy growth at an incremental rate as a large number of first-time buyers/users, and small operators are proceeding for the purchase of loader machines.



Most importantly, it is the Investment in infrastructure that the Indian government agreed to make, which  is expected to push the sales of backhoe loaders in India. There are also initiatives underway to reform procedures and policies around infrastructure investment which should stimulate the sector further, as should new funding initiatives. Also, the manual labour shortage, as a result of government-sponsored employment programs for the rural sector, is another imperative factor that will lead to the growth of backhoe loaders in future.



According to Persistence Market Research’s report, “Global Market Study on Backhoe Loaders”, Asia Pacific excluding Japan (APEJ), the largest market in terms of volume and value, was worth US$ 866.6 Mn in 2015, and was projected to surpass US$ 1 Bn in revenues by 2018. India will continue to be the world’s most lucrative and largest market for backhoe loaders, growing at 6.9 per cent — higher than the 5.9 per cent 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.



India is by far the largest backhoe loader market in the world, with this type of machine accounting for almost 50 per cent of all construction equipment sales in unit terms. Off-Highway Research estimates there is an active population of 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 the 33,595 machines sold in 2011.



According to the report, the Indian backhoe loaders market will continue to experience steady gains throughout the forecast period on account of a slew of factors. Government focus on infrastructure development coupled with easy finance schemes have ensured steady buoyancy, and the status quo is anticipated to remain unchanged throughout the forecast period. JCB remains the market leader in India as well, accounting for roughly three-fourth revenue share.



Safety is the most important feature of our products. Amongst the world’s first five features, we have the ‘Follow Me Home’ lights. With the work going on throughout the day, this feature helps the operator during the night, especially when there is low visibility. The cabin of the operator is another area that requires safety. Our cabins are the biggest in the industry with plenty of room space. Further, we are now looking at AC cabins for the operator’s safety and comfort. JASMEET SINGH, ASSOCIATE VICE PRESIDENT - CORPORATE COMMUNICATION & CORPORATE RELATIONS,  JCB INDIA LTD




Growing equipment rental business


Small- and medium-sized enterprises (SMEs) across the globe are increasingly preferring rental construction equipment owing to high initial investment and maintenance cost of new equipment. Also, additionally, backhoe loaders used in rental construction equipment on a monthly basis adds to minimising the cost of construction projects. For example, numerous manufacturers, including Volvo and Caterpillar, have been offering backhoe loaders to construction companies on a rental basis, which in turn has enabled these companies in curtailing their operating expenses.


 It is also a known fact that the rental equipment further aids construction companies in utilizing the most recent innovations, enabling such companies to divert capital expenditure initially set aside for equipment ownership towards other resources, thereby facilitating business expansion.




Our latest offering in the market SHINRAI has been designed to meet the demanding Indian customer requirements. A major segment of Indian backhoe loader market is the Hiring segment – hence, fuel consumption is the major criteria. Tata Hitachi’s SHINRAI boosts fuel efficiency with it EHS(Excellent Hydraulic System), wherein the flow is regulated sensing the pressure of the system. Apart from low fuel consumption, SHINRAI also boasts of high bucket forces, dump height and good reaches. SANDEEP SINGH, MD, TATA HITACHI CONSTRUCTION MACHINERY COMPANY PRIVATE LIMITED






CASE India offers its state-of-art, an advanced Eagle-Eye-Telematics solution in its Loader Backhoe PRO range. This Telematics’ solution is a GPS monitoring system. This solution has a unique feature of ‘Geo-fencing’ which means it will help the user to keep a track of his machine and will send an SMS alert if it operates outside the desired area. It provides real-time access to machines and results in enhancing the performance and efficiency of the machine. AJAY ANEJA, BRAND LEADER, CASE INDIA






Global trends



Recently, a novel report developed using proven research methodologies at the headquarters of Fact. MR has identified various prominent factors and trends prompting market growth of global backhoe loaders market.


The study is titled as “Backhoe Loaders Market Research Forecast, Trend Analysis & Competition Tracking – Global Review 2017 to 2026”, which deeply analyses the global market trends, with historical data from 2016 and 2017, and projections of compound annual growth rates (CAGRs) during the mentioned forecast of 2017-2026.


Backhoe loaders are being used on a large scale in small construction projects. Owing to the increasing construction activities, backhoe loaders are witnessing huge demand. With the increasing use, backhoes equipped with attachments such as augers, breakers and grapples and other attachments are being used on a large scale.



Manufacturers of backhoe loaders are focusing on design and weight of the backhoe as the heavy weight of backhoe can cause the vehicle to tip. Hence, small frame and precise control in backhoe loaders are being provided by manufacturers.



As per the latest market research report by Fact.MR, the global backhoe loaders market is expected to witness steady growth. In terms of value during 2017-2026, the market is estimated to register 5.4 per cent CAGR. In terms of volume, 146,518 units of backhoe loaders are estimated to be sold by the end of 2026. Following are the insights on how the global backhoe loaders market will perform in the coming years.



“Demand for backhoe loaders and other construction equipment is directly co-related to the pace of infrastructure development. India is going through a momentous phase of development of roads, railways, and dams receiving government support and FDI. Further, India’s real estate sector remained largely unaffected by the global housing crisis of 2007-08, and leading construction equipment manufacturers consolidated their position to compensate for sluggish demand in US and Europe. Since then, the India construction equipment market has been on an upswing, and our research projects the demand to remain buoyant throughout the forecast period.” – Persistence Market Research analyst.



Investment in infrastructure by the Indian government is seen as the underlying factor which is expected to drive backhoe loader sales. There are also initiatives underway to reform procedures and policies around infrastructure investment which should stimulate the sector further, as should new funding initiatives.



Center-mount backhoe loaders will continue to outsell side-shift variants, with the former projected to account for over 86 per cent revenue share of the market throughout the forecast period. Center-mount backhoe loaders remain sought-after among end-users in Asia Pacific and North America, whereas side-shift backhoe loaders are concentrated in Europe. “Side-shifts were first introduced in Europe in the 1960s and since then they have remained the preferred choice; however, across the pond, end-users have shown a marked preference for center-mount machines. They also remain the preferred choice among end-users in India, influencing manufacturers to increase production capacity and broaden their range”, adds the Persistence Market Research analyst.



These factors are expected to underpin growth across the Indian construction equipment sector in years to come, but there are other reasons for the backhoe loader market in particular to enjoy continued buoyancy.





The highly concerning issues with the ecosystem of the industry itself:


1. Lack of accreditation norms:


The required norms to set the standard and maintain the quality of the products and the operators is missing. There is pressing need for formal training of operators and accredited certification for the same. Quality is another standard that needs to be maintained and improved in terms of the products. A lot of private players have come up with training programs for operators of heavy equipment.



2. Unfavorable laws and taxes:


The laws and taxes applicable to the industry are not favorable for growth. The profit margins become smaller and slow, causing investors to lose interest in the industry as a profitable investment.



3. Poor rental penetration:


Equipment rental is a profitable space in the CE industry, sadly the concept of equipment rental as a business and service is a relatively new concept and requires a sizeable investment to start with and the profits are yet to keep pace.



4. Demand supply gap:


There is a growing demand in the market for construction equipment that have supporting software technologies integrated. While the demand and supply are both there, there is a drastic shortage of skilled labor that can make the most of the available technology.




Future Prospects


Due to the very nature of this multitasking machine, backhoe loaders will always dominate in terms of market share among all construction equipment. They will register maximum demand among all construction equipment. But most importantly, India will set the standard for backhoe loaders in emerging markets, considering that many OEMs are ‘Making in India, selling globally’.




Going ahead



Construction in India is fast approaching international standards. The profile of Indian demand is characterized by cost consciousness more than value consciousness. Contractors want sophisticated equipment at Indian prices and they want to use them roughly (in-fact abuse them). Also, there is higher awareness about the utility of this machine in rural markets and more farmers-cum-entrepreneurs are starting to own them.


 As the backhoe loader machine is one of its kind with a multi-tasking ability, it is believed that backhoe loaders will always dominate the market in terms of market share among all construction equipment. Many industry experts have agreed to the fact that there are high possibilities that the backhoe loaders will act as magnets for demand among all construction equipment. Under the ‘Make in India’ campaign, India will set the standard for backhoe loaders in emerging markets.


Entry of new players is well likely to expand the market. Proper product positioning will help the new entrants create a stand in this highly competitive industry. However, viewed from the long-term prospective, existing brands with wide market base will continue to connect their names with product support, an initiative which they will now be making stronger than before for higher brand recall. However, most importantly, India will set the standard for backhoe loaders in emerging markets, considering that many OEMs are, selling globally.







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