LEADING the INFRA PUSH!

The budget announcement has reiterated the government's priority of infrastructure development in the country. Backhoe loaders being the largest used construction equipment in the market, will play a crucial role in achieving the goals set by the government.

Backhoe loader is very popular due to its versatility, mobility, low ownership and operating costs, easy financing, and excellent resale value, as well as the widespread availability of after sales support. India remains not only the world's largest market for backhoe loaders, but a bigger market than the rest of the world combined. Off-Highway Research expects Indian backhoe loader demand to return to the high level seen in 2018 over the medium term. However, the ongoing pandemic is of course a source of uncertainty.

Market dynamics

The current market trend looks positive with the infrastructure development back in action after a lull period in the past couple of years. According to Deepak Shetty, CEO & MD, JCB India, there has been a significant focus on the development of infrastructure by way of announcements of projects and budgetary allocations over the past few years. “The recently announced Gati Shakti programme and the National Infrastructure Pipeline are critical for our industry. This coupled with NABFID and National Asset Monetisation are steps in the right direction to energise the sector,” he adds.

However, there have been some disruptions aswell. “A sharp increase in commodity prices, an extended Monsoon and some key states are about to go into elections. The change in emission norms from BS III to CEV Stage IV has also contributed to the subdued sentiment,” points out Shetty.

India has seen some unprecedented slowdown in the past couple of years due to the pandemic impact. The pandemic-induced lockdown stalled the construction activities and the infrastructure developments in the country and the construction equipment left idle. This has led to a sharp decline in the sales of backhoe loaders in the past years. As Jalaj Gupta, CV Business Head, Mahindra & Mahindra points out,“The market size of backhoe loaders is the lowest in the last five years. It is shrunk by almost 40 per cent from last year. With BS-IV coming into the picture and the cost of raw materials rising due to supply issues during pandemic,the overall price of the machine is getting out of reach from local hirers (FTU & FTB) profiles.”

However, backhoe loaders are still the front runners in the Indian CE market. According to Sandeep Mathur, India General Manager, Business Head, India & SAARC - Construction Equipment, CNH Industrial, the loader backhoes are currently one of the largest in terms of volume, which accounts for about 65 percent of the entire construction equipment category in India. “Loader backhoes are progressively growing in demand due to the numerous infrastructure activities across the country.”

Adding to the market trends, Suk Namkoong, Head - Strategy, Marketing and Dealer Development, Doosan Bobcat India, says,“The backhoe loader market in India has clocked over 32,000 units in 2021. Around 90% of backhoe loaders sold were in the mid-range capacity range of 70-80 HP which continues to dominate the market. Though there is a small demand for the 50 HP and above 80 HP capacity, the mid-range backhoe loaders continue to lead the segment, considering the demand for the locally proven fuel-efficient engines. While customers have become more educated and demanding in terms of the ideal equipment required for the kind of job site applications that they work in, the OEMs are also indicating readiness to meet this demand by ramping up their production capacities.”

Post-Covid revival

The Indian CE market is slowly coming out of the grip of the slowdown with the revival in construction activities. According to Gupta,Covid has impacted the market in two ways: Reduction in the machine utilisation with lockdowns and increase in the cost of raw material with constraints in supply chain. He adds, “Both have impacted the purchasing pattern of customers. Also, BSIV-induced advancement of technology has further raised the costs. Demand is not picking up as desired. However, reports indicate that construction equipment industry is expected to grow at a significant paceled by government push on infrastructure coupled with key announcements in the quarter. With government focused on infrastructure and many more projects coming up. We are positive for the market to grow in the coming years.”

Namkoong cautions, “With projects making progress at a very slow pace during the current FY, there is a pressing need to increase investments and award projects to revive this sector.” According to him, with markets now in the rebound phase, and with anticipated growth through the Indian Government's National Infrastructure Pipeline, the infrastructure is gearing up with projects across all sectors. This is a great opportunity for the stakeholders to catch up with the delayed and upcoming projects pushing the OEMs to accelerate production to meet up the market demands.

Mathur also sees the demand picking up gradually. “Though there was a sharp impact in the early months of 2021, the growth has been noticeable due to the various infrastructure projects and government announcements for economic development,” he highlights.

Demand drivers

Speaking on the demand drivers of backhoe loaders, Shetty says, “At a national level, large projects like Sagarmala and Bharatmala would drive demand for construction equipment. Additionally, the creation of 100 new airports, Smart Cities and Metro projects will certainly open newer opportunities ultimately resulting in improved demand. JCB today offers the widest range of backhoe loaders in India, we have the 2DX, the 3DX, the 3DX Plus the 3DX Super and the 4DX. Our customers have the widest choice to suit their applications.”

According to Namkoong, backhoe loaders are predominantly driven by the rental market where factors such as better fuel efficiency and better performance play a major role in the selection of the equipment. “With the NIP (2019-2025) roll-out, segments majorly from government-led infrastructure projects like construction of highways, rural roads, housing, transport, cargo terminals, railways, airports, and seaports are bound to drive the demand for backhoe loaders in India. Likewise, smaller construction projects like material handling and excavation work to larger residential projects would also add to the demand,” he says. In addition, Government initiatives like Swachh Bharat Clean India Mission, PMGSY Rural Development programs, and Gati Shakti Master Plan would enable seamless multimodal connectivity and logistics synergy of expressways and river linking projects, according to Namkoong.

According to Mathur, one of the most important factors to consider when purchasing a machine is its fuel efficiency. “With new emission regulations in India and throughout the world, technology has progressed to provide vehicles with lower carbon footprints. The new range of machine is both environmentally friendly and cost-effective, since fuel costs are kept to a minimum. Rental is another segment that drives demand for loader backhoes. There has been an uptake in the rental market due to the increased investments in infrastructure by the government. The sales have peaked since the focus turned to building infrastructure across the country. Also, newly manufactured products with versatile and technologically advanced attributes are in high demand,” he adds.

Innovations and technology trends

Technology has played a major role in the evolution of backhoe loaders over the years. Namkoong elaborates on the trend, “Keeping in mind the market demand, one of the focus areas is the technological enhancement with electronic engines through CEV Stage IV norms that ensures improvement in fuel efficiency, increased uptime and productivity, and lower operating costs. Similarly, improvement in performance through advanced hydraulics, ergonomically designed operator cabin for superior experience resulting in long working hours, the telematics solutions like remote monitoring of the equipment to reduce downtime are critical evaluations to the overall productiveness and profitability.”

Major players have given due importance to fuel efficiency and productivity of the machines. JCB Indiahas recently launched its new range of CEV Stage IV backhoe loaders. The range includes the new 3DX Plus, the 3DX Xtra, the 3DX Super & the 4DX to meet a wide range of applications for customers.

Shetty elaborates on the technology highlights, “The new backhoe loader range is powered by the well-established and reputed 55kW JCB ecoMax diesel engine. This CEV Stage IV engine is environment friendly and comes with well-proven CRDI technology, a Waste-Gate Turbocharger and a two-stage cooling EGR system. A unique feature of this engine is that it has a state-of-the-art combustion system that eliminates the need for any After-treatment, DOC (Diesel Oxidation Catalyst) or a DPF (Diesel Particulate Filter). This engine also has no deration at higher altitudes thus greatly benefitting customers and users in mountainous terrain.”

Shetty highlights the fuel efficiency and productivity features, “The popular JCB backhoe loader is now even more fuel-efficient and productive. The 3DX Plus CEV Stage IV machine is 7% more fuel-efficient in Eco mode and has 25% higher productivity in Plus mode as compared to the outgoing model. It has features such as Auto Idle and Auto stop to help reduce fuel wastage and improve efficiency. Additionally, a high torque of 400 Nm and three Excavation Modes for different site conditions - Eco, Standard and Plus enhance the machine's adaptability to meet output needs.”

JCB also has the 3DX ecoXpert, which is powered by the revolutionary IntelliPERFORMANCE technology which optimises fuel-efficiency whilst retaining performance. “The machine is loaded with 30 innovative features which include a digital speedometer, Bluetooth music system, an informative colour display, an auto-stop feature and a new comfortable seat,” says Shetty.

With BS-IV introduction, the entire Mahindra EarthMaster range of backhoe loaders is enhanced both in terms of productivity and features, according to Gupta. He explains the features, “Powered with a reliable 74 HP CRi Mahindra engine, it now has 13 per cent higher torque compared to BS-III leading to improved machine's loader efficiency. With improved hydraulic system which has a higher flow handling capacity, and other improvements leads to overall production capacities improvement of 10 per cent. With unique features as Banana Boom, joystick lever, robust design, and bigger buckets, EarthMaster range is well suited for all types of backhoe applications: be it mining, trenching, crushers, building construction or any other work in construction industry. It would be available in two variants - SX and VX.”

On the Telematics solutions, Gupta adds, “Continuing the legacy, we are pleased to introduce iMAXX Telematics Technology - a prognostic, diagnostic and predictive fleet management system in our entire range of EarthMaster and RoadMaster. You can think of it as your personal assistant that updates you with vital information about your equipment and your business.”

Mathur explains the innovations, “At CASE, the current BS-IV compliant range of backhoe loaders shows the best of our legacy, global technical knowledge, and engineering expertise. The FX Series of backhoe loaders includes a 55kW (74hp) range with 770FX (gear pump model), 770FX Plus (variable displacement pump model) variants; and a 72 kW (97hp) range with 851FX, 851FX Centre Pivot and 851FX Plus variants. The new generation hydraulics vary hydraulic flow based on load, improving fuel consumption up to 14 percent, which is combined with eco mode and auto-idle capabilities, increases fuel economy up to 20 percent and significantly lowers operating costs.”

Advantage backhoe loader

Backhoe loader is the most popular construction equipment in Indian market with a market share of over 60 per cent. The sheer advantage of versatility, mobility, low ownership and operating costs, easy financing, and excellent resale value, as well as the widespread availability of after sales support made it the preferred choice for many.

Highlighting the advantages of backhoe loaders, Shetty says, “Backhoe loaders are the most widely used type of construction equipment for infrastructure development in India. These machines have proved their ability to work in a wide range of applications and in different terrains and types of projects. Their versatility, reliability and productivity are well proven and will continue to remain critical in the completion of infrastructure projects on time, irrespective of their scale.”

According to Gupta, the best part of backhoe loader is its multifaceted ability to work in any type of applications. Elaborating on the advantages, Namkoong adds, “Backhoe loaders are considered the backbone of the construction sector in India and are the best investment for rental business from an ROI perspective. Since the investment is low in comparison with other specialised equipment, they are the popular choice, especially among hirers. While the backhoe loaders are preferred in both small contracts works and larger infra projects, the versatility offered for the Indian terrain conditions is what gives an edge over the other specialty equipment.”

Mathur highlights, “As loader backhoes can be used for multiple activities such as road construction, irrigation, agricultural, industrial applications, etc., it is the preferred choice of the customers, thus driving demand.”

Make in India

At a time when the government is pushing for Make in India and Atmanirbhar Bharat, the Indian backhoe loader market is very much Indian. Gupta says, “India has already been established as a manufacturing hub for backhoe loaders. All market players have their manufacturing hubs in the country. No aggregate is imported in the machine. We are 99.9 per cent Make-in-India franchise. Our products are very competitive in terms of quality and efficiency in international market. We are already doing exports in SAARC and African countries. With future expansion plans, we will be ready to export the products worldwide.”

Mathur adds, “At CASE, we have been manufacturing machines in India for more than 30 years at the award-winning, state-of-the-art manufacturing plant in Pithampur, Madhya Pradesh. The products are distributed locally as well as exported to over 30 countries including Russia, Sri Lanka, Africa, Bhutan, and Southeast Asia and in the Middle East.”

Namkoong elaborates, “While the government's goal of making India a manufacturing hub for construction equipment is underway, Doosan Bobcat established the Chennai plant as the global hub for supplying Bobcat backhoe loaders. Most of the global OEM suppliers are already present in India with their local manufacturing facilities and with an extensive supply base for construction equipment. Through these suppliers, local base, and supply chain we have achieved 100 per cent localisation with high quality at optimal cost. Our India factory follows the same practices and standards of quality which are followed in our Bobcat facilities in North America or Europe as we want our customers globally to experience the similar quality of products irrespective of where it is being made. India has the right supply base for off-highway products which is on par with the global automotive supply chain. One of our overall strategies is the selection of the precise supply partner considering future technological development potential ensuring long-term relationships.”

A promising outlook

With the government's intention is clear after the budget announcement, infrastructure creation will be key in the coming years. Backhoe loaders with their lead role in Indian construction and infrastructure arena, will have a greater engagement in future for sure.

Gupta says, “Backhoe loader comprises 70 per cent of the total industry figures. With CE industry promising forecasting, we are confident on backhoe loader market to bounce back.”

Shetty adds, “As an organisation, we remain positive about India's growth story and are hopeful of seeing a strong recovery like we saw last time.”

“With markets reviving to normalcy, the current trend looks quite positive. Currently, with manufacturing plants operating near normal, the CE industry is now focused on catching up with the backlog caused due to the pandemic and lockdown since 2020.  However, the recent Union Budget's focus on encouraging the infrastructure sector is a transformative approach, particularly with the multi-modal transportations through Gati Shakti Master Plan, driven by seven engines - roads, railways, airports, ports, mass transport, waterways, and logistics infrastructure,” Namkoong concludes on a positive note.

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