Construction Mirror Cover Story Detail

Indian CE Industry Continues to be Sensitive to The Demand for Backhoe Loaders

May 10, 2018

Earth moving equip. market in APAC is est. to represent more than 50% of market value share in the global earth moving equip. China India are among the developing countries with intensive construction activities that fuel the growth of earth moving equip. market. In terms of volume, backhoe loader sales will grow at a 7.3% CAGR, owing to its smaller size, which makes it simple to use in different types of construction projects.

Loaded with Competition

India has a teeming population of backhoe loader OEMs, of both Indian & global brands. All are set to capitalize on infra. projects being fast tracked by the Govt. Only the backhoe loaders loaded with USPs cut out for niche markets can win max. market share. Along with the boom in construction & infra. projects come the necessities for construction equip. Among them the most versatile, one must say, is the backhoe loader. These workhorses in varying capacities will meet demand of big ticket buyers as well as the large number of individual customers. The backhoe loader expedites project execution which would otherwise require thousands of man hours. This beautifully complex piece of machinery heralded the arrival of mechanization in construction, & was followed by all sorts of other machinery which were accepted & used widely in India. JCB pioneered the backhoe loaders concept almost four decades ago in India & has sold over 2,25,000 backhoes in India. It continues to be one of the most widely used construction equip. in India. Backhoe loader is popularly known as Swiss army knife of construction equip. In order to enable it to complete various tasks, backhoe loaders come with an extensive range of attachments that can be fitted to it for performing difficult tasks like lifting, grabbing objects, dozing, drilling, demolition & leveling the ground. Due to its affordability & multi-application versatility, the backhoe loader is the popular choice for most jobs & accounts for approximately 65% of the earth moving & construction equip. segment. At present, most of the tech. leaders like JCB, Mahindra, Escorts Construction Equip., Terex, Case, Caterpillar, TATA Hitachi, ACE, LeeBoy, BEML, Bull, etc., are present in India either as JV CoS or have set up their own manufacturing facilities or marketing CoS. All backhoe loaders sold in India are manufactured in the country. In addition to domestic sales, Indian based backhoe loader manufacturers exported some 2,171 units last year according to consultancy, Off-Highway Research.

Global trends

As for global earth moving equip., growing industrialization in several parts of the world presents better opportunities for the earth moving equip. market. According to Persistence Market Report, global earth moving equip. market will witness a robust growth growing at CAGR of 6.7% during 2017-25. Earth moving equip. market in APAC is est. to represent more than 50% of market value share in the global earth moving equip. China & India are among the developing countries with intensive construction activities that fuel the growth of earth moving equip. market. In terms of volume, backhoe loader sales will grow at a 7.3% CAGR, owing to its smaller size, which makes it simple to use in different types of construction projects. The increase of Public Private Partnership projects in commercial & residential constructions will drive the earth moving equip. market, says the report. Reports on the Indian market expects the demand for backhoe loaders to increase at a healthier pace than what has been seen since early 2007 onwards & it anticipates the demand to touch new high of 3400-3500 per month. Inquiries with both buyers & suppliers of construction equip. are pointing towards a significant recovery from FY17-18 onwards, & the industry expects to further build on this momentum when getting into FY18-19.

Market scenario & demand

Major players in the backhoe loader market predict a flat market this year with annual sales in the range of 18,000-21,000 units. The market in this segment is highly competitive with all the big players fighting with the leader. This sentiment is reflected in the recently announced downsizing of staff & officers by some of the manufacturers to enable them sustain their operations by cutting costs. Industry has been going through a challenging time over the past 3-4 years. As per ICEMA estimates, the market for backhoes in 2014 was approx. 21,500 units. A sale of 18-20,000 backhoe loaders in FY 2015-16 in which, 50% will be captive users, 20% hirers, another 20% mine owners, 10% institutions like municipal corporations. During the current calendar year, the annual addition will be 18,000-19,000 units which in next five years’ time would be around 25,000 units per annum. It is visible a challenge in the financing of the equip. as most of the customers are first-time buyers/users. It is expected that the backhoe loader market to be around 22,000 units in 2015-16. Over this base, we expect the market to grow by 3-4% in FY 16-17, after which the growth rate is expected to surge to up to 7-8% once the Indian infra. Growth story engulfs most part of the country. At the same time, for the above to happen, we need peace, law & order, quick passage of imp. business legislation like land acquisition, GST, & improvement in ease of doing business, not amongst businesses but simplification in doing business with the govt. which essentially including permits, clearances, taxation reforms through IT enablement of govt. services, tenders, payments of dues/bills etc. Current scenario of backhoe loader industry is challenging with relatively no growth. In fact, this industry has de-grown by almost 4% YTD over last year. With focus of govt. on infra. Dev. & with the recent Make in India initiatives taking form, we feel that the backhoe loader industry will bounce back to new highs from its current low phase. According to him, at the current rate the industry size for backhoe loaders in FY’16 would be just above 20,000. The market demand is model-specific. Customers go for models which provide cost-effective solution & are high in terms of quality & performance which are technologically reliable. > 90% of backhoe loaders are sold with 76 hp engine, 1 cu m loader & 0.24 cu m backhoe bucket. This is an established combination with huge population. From its peak in 2011 at about 33,500 units, the loader backhoe market has shrunk in line with the overall industry size since then to reach around 22,500 units. While the decline in volume has been witnessed in 2015 as well, the rate of decline is flattening & a revival is expected in the industry from 2016 onwards. The booms in housing, construction & infra.- including transport, power, mining, pipelines, irrigation & water supply, etc. as well as rural dev. driven by Gram Panchayats & small municipalities, coupled with the Swachh Bharat Abhiyan & PMGSY projects has been raising the demand for backhoe loaders. Construction equip. industry in India is expected to reach $5 bn by FY’20 from $3 bn in FY’16 in value terms & with infra. Investment set to go up, the sale of construction equip’s expected to grow at an est. CAGR of 6.18%, in volume terms to 96,700 units by FY18 from 50,000 in FY’07. Backhoe loaders are expected to account for over 39.28% of the total construction equip. sales by 2018. Off-Highway Research estimates an active population of over 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 33,595 machines sold in 2011. Apart from construction & infra. Dev. in urban India which was the major demand driver for backhoe loader market, the 2016-17 budget allocation for rural dev. that amounted to Rs. 86,000 Cr., out of which Rs. 19,000 Cr. was allocated to the road sector under the PMGSY project had contributed to the demand. PMGSY has proved to be a key driver that boosted backhoe loader sales for the bygone decade. Now, again, rural dev. is going to be the major driver for backhoe loaders, considering the 2017-2018 budget allocation of a whopping Rs. 1,05,447.88 Cr.

Major OEM offerings

JCB is the global leader offering widest range of niche oriented backhoe loaders, namely- 2DX, 3DX, 3DX Xtra, 3DX Super, 4DX, 2DXL, & 3DXL to suit different user segments for different applications. New 3DX ecoXcellence range is the latest addition to JCBs range of next generation backhoe loaders. It delivers an increased fuel efficiency of 10% with a 30% decrease in maintenance cost. This equip. is fitted with the new generation JCB ecoMAX engine that provides high productivity & enhanced performance in any application. Owing to its high digging force & fast excavation cycle time, the machine works 25% more per litre, churning out the best performance in all strata with fuel savings worth Rs. 800,000 thousand in 3 years. It is designed according to Indian excavation & loading requirements so it can load conventional & high bodied rigid dump trucks. Other competitive attributes are newly designed spacious cabin with 20% more leg space for operators & easy access to the engine & cabin for carrying out periodic maintenance. JCB machines can now be remotely monitored real time, via its advanced ‘Livelink’ telematics system. JCB India plans to foray into Nepal, Arunachal Pradesh in North East India, Leh & Kargil in J&K. This expansion will add up to a total 700 outlets by end 2017. JCB currently has over 650 outlets & 63 dealers across India.

Escorts Construction Equip. (ECE) is India’s homegrown global player who launched their backhoe in the mid-1980s. With an eye on harsh operating conditions, it launched its new 4x4 backhoe loader, Jungli, in October 2016. True to its name, Jungli has a commando type livery & has been designed for rough terrains, excavation of morrum soil, rock breaking, working in slushy underfoot conditions, river bed sand excavation, overburden excavation in stone mines, etc. Its structure & the bucket has been redesigned for tough applications with high dumping & ground reach & digging depth. Their breakout forces are much higher than most competitors, ensuring high productivity in rough terrains with minimum failures. Jungli’s 4-wheel drive makes it suitable for all types of harsh terrains. Its engine is turbocharged with an inline fuel pump. The eye-catching combat color of a battle tank gives it a rugged look, making the product an attractive & competitive value proposition. An owner can monitor his machine through its Equip. Monitoring System to ensure that the desired deliverables are in line with the expectations/promise made by the manufacturer. The initial response to Jungli has been extremely encouraging & ECE is optimistic about Jungli carving a niche segment for itself.

130, Digmaster backhoe loader is an extremely reliable loading & excavating, fuel-efficient machine with two & four wheel drive options. ACE’s strategy is to offer it as a package along with its range of road construction equip. As an Indian OEM it is attuned to the local market & its loaders are geared to various application requirements of local contractors. It has a strong service network of 100 dealers across the country, which is fully equipped to provide genuine spare parts & services by Co.-trained engineers in Faridabad. Almost all the international players in backhoe have their manufacturing facilities in India & are using aggregates manufactured in India only.

130, Digmaster backhoe loader is an extremely reliable loading & excavating, fuel-efficient machine with two & four wheel drive options. ACE’s strategy is to offer it as a package along with its range of road construction equip. As an Indian OEM it is attuned to the local market & its loaders are geared to various application requirements of local contractors. It has a strong service network of 100 dealers across the country, which is fully equipped to provide genuine spare parts & services by Co.-trained engineers in Faridabad. Almost all the international players in backhoe have their manufacturing facilities in India & are using aggregates manufactured in India only.

its first backhoe loader ‘BULLSMART’ in Sep’11 from its greenfield state-of-the-art facility at Sulur in Coimbatore. Neither big nor small, it is a smart machine with 28% lesser initial capital investment & 31% lower running cost vis-à-vis popular backhoe loader brands. Due to its faster cycle time & shorter hydraulic circuit, it is capable of similar output with lesser cost resulting in better economics & higher return on investment. It houses the Kirloskar 4R810, 60 HP turbocharged; 4 cylinder engine, & incorporates the Carraro transmission. It holds a 0.23 cubic meter backhoe bucket, 0.90 cubic meter loader bucket with payload capacity of 1,300 kg. The major benefits of the Bull Smart are, shorter cycle time on account of innovative hydraulic circuit, for better productivity. High on savings, low on running costs, it can save approximately 30% directly just on fuel cost. It is also the right solution to counter the rising cost of fuel as it is multi-utility with 39 types of optional application-specific buckets. It is optimized for Indian requirements with bottom-of-pyramid approach for highest affordability & max. usage in additional segments, leading to more earnings. It is the only backhoe which can easily load full body/high body dump trucks by its booster bucket with a dump height of 13 ft on its loader. Booster bucket eliminates the need of making a ramp which is a must for other backhoe loaders while loading onto hoppers of batching plants etc. Bull provides fast service through an extensive all-India service support network; well-trained service teams; & better parts availability. The Co. manufactures a range of other backhoe loaders; Bull HD 76 4WD which has Carraro transmission with integral torque convertor with 2 WD & 4WD drive options available, Bull HD 76 2WD which has Carraro transmission with integral torque convertor. It has a power steering with 2 WD & 4WD drive options available, Bull HD96 4WD has the Kirloskar 96 hp engine with gross power of 71.6 Kw & Carraro transmission, Bull HD 100 has a Euro III diesel Perkins engine & ZF power shift transmission with integral torque convertor, Bull Smart Loader 60HP Backhoe loader has a Kirloskar 44.8KW (60 HP) engine. It has a Carraro synchro shuttle transmission with integral torque convertor; Bull HD 76 Loader has Carraro transmission with integral torque convertor. It has a power steering with 2 WD & 4WD drive options available. Bull is aiming to become a major OEM in ECE equip. not only in the Asia but also Latin America & Africa.

Aftermarket Focus: Mahindra Construction Equip. is the latest entrant in the backhoe loader market. Its EarthMaster backhoe loader represents the auto giant’s foray into manufacturing heavy-duty construction equip. It is the result of 36 months of dev., & offers best-in-class power, superior fuel-efficiency, & meets USA Tier III emission norms, the most demanding in the world. Made for the world-class performance, it has been field-tested for over 20,000 hours in the harshest terrains, & comes with an intelligent communication system that relays information on its operation, coolant temperature, & diesel level directly to your mobile phone. Mahindra EarthMaster Brand is available in 3 variants: EarthMaster VX, EarthMaster SX & EarthMaster 4WD. For monitoring & maintenance its telematics system REMOTECARE, has built-in intelligent sensors capable of sensing & detecting critical faults in time & by giving an advance warning to the owner to help maintain the health of the machine. Since it is preventative in nature, it helps to prevent major breakdown. The system also sends out an SMS to the Service call centre of Mahindra Construction Equip. which in turn informs the nearby dealer about the same. Optimum utilisation of the machines is also being warranted by faster parts availability & support through its dealers & also from the dealers of other businesses in Mahindra. Co.’s new ongoing service improvement project will further help its customers to leverage its services. Mahindra manufactures SX & VX backhoe loaders under the EarthMaster category of earthmoving equip. Mahindra Co.’s CE business is supported by a wide network of 60 dealers catering to more than 400 districts across the country.

Backhoe loaders: flat growth

Backhoe loaders are passing through a challenging time for the past few years. Market is registering a flat growth with some indications that it is shrinking. However, now there is optimism among the leading players in the backhoe industry on the back of the govt. initiatives on infra. projects. But how far this will help this segment to regain its glory is difficult to predict. Backhoe loader has led the sales in construction equip. industry in India, for the past several decades. As an extremely versatile product, it has proved its importance & utility over the years. It is usually the first machine to enter a site at the start of the project & remains engaged with a variety of activities throughout its life cycle. Over the years the contribution of the backhoe to Indian infra. dev. is immense. But the recent industry slowdown has severely affected this segment. Manufacturers are contemplating new strategies to recover.

Growth prospects & challenges

about 24,000 new backhoes are being added every year. This makes it the largest selling CE product category. Globally, backhoe is a utility machine, however, in India, it is positioned as a productive machine, which has to turn out profits & payback the cash used to fund it. This product category will continue to thrive for a long time as it accurately represents the great Indian entrepreneur, who is very actively engaged in the process of nation building. As new projects get announced, the demand is also expected to rise & in the coming years a min. of 10% growth may be expected. Backhoe loader market is maturing & a 7-8% annual growth is expected in the next five years. It is a support machine, not a mass production machine, so growth is feeble. The key challenges in its growth path are the availability of funding options & innovative financing products for buyers wanting to own & operate their first backhoe loader,. Rationalizing of on-road prices across different states in India will also give a fillip to demand as taxes & taxes over taxes make this product unviable in certain states. GST regime will help the product category grow at 200-400 bps. Driver training is a major challenge in this segment. Driving a backhoe loader & putting it to optimum use is a specialized skill in itself due to operational capabilities of the machine. Most imp’ly this machine has a very small turning radius due to the very nature of its tasks. They have to operate in limited confined spaces & hence need high maneuverability with a small turn radius. The other imp. characteristic of these machines is that it operates at both ends. Hence the driver has to be equally familiar in both the forward & reverse gears. Most OEMs of backhoe loaders offer specialized driver training for their clients. Market leader JCB has 14 operator training centers across India, which has produced about 24,000 certified drivers till now. ACE has a dedicated training center at Faridabad. LeeBoy’s Expertise Dev. Growth & Excellence is another case in point for driver training. Terex also has its own Terex Training School. Stringent emission norms confirming to BS IV is another major challenge for backhoe OEMs. Rules & regulations on emission levels for mining & construction equip. is also restricting the demand for earth moving equip. Different countries have different laws for the emission, for example, Europe & North America have more stringent laws on emission as compared to other countries. Equip. finance is another major challenge in India. A majority of the Indian rural market does not have a strong financial background, & have to resort to equip. finance CoS to fund their purchases. Channels of growth: Distribution network & aftermarket channels remain critical part in construction equip. industry. When it comes to distribution network, business viability still remains imp. aspect. Area coverage, responsive sales operations, maintaining cash cycles & inventory turns are key challenges in controlling channel inventory & costs. To remain responsive to customers, speed & accuracy of information makes all difference. Same is applicable for aftermarket channel, that needs to be service centric & for this they need to be proactive in tracking & maintaining assets on the ground. A well-coordinated & integrated ITES is the only solution for better distribution network & aftermarket channel. There is always a need to be close to customers, & due to the unique nature of this industry sustained expansion of the distribution channel is imp. aspect of reaching out to customers. Geographical spread of the product is pan India including very far off places & customer expectation on the uptime of machine is very high. This asks for quick response & low turnaround time. Ensuring the best quality of product, service & immediate response to customer at his door step are major factors for a successful business. Understandably, above responsibilities are undertaken by authorized dealers. Availability of spares & training of dealer service team are essential. Breakdown period should be <24 hours on an average.

Products & Technologies: Considering the current market scenario, there doesn´t seem to be major changes in the products in the near future. The 2W & 4W variant with 2 different HP engines, different types of buckets & tyres is available with all the leading manufacturers. Digmax II was the first backhoe loader to offer Equip. Monitoring System (EMS) but others are catching up on this feature because of its benefits to the owner & service provider. Improvements would continue to be made for reducing fuel consumption & improving productivity but no earth shaking changes would be made in backhoe loaders for a few more years. Digmax II & Digmax II 4 wheel drive find acceptance based on application & the region. High altitude areas would always constitute of 4W drive market as would high gradient application areas like mines. Popularity of the model is application specific. A standard machine would therefore be the most sold machine with tyres standard/heavy duty being the two options chosen from. JCB today has the most comprehensive range of backhoes in the market. We have a total of five models on offer for our customers. These range from the Compact 2DX, the bestselling 3DX with the variants (3DX Xtra & the 3DX Super) & finally the larger 4DX. All these machines come with a variety of extra options to suit the requirements of our customers. Terex has recently achieved a historic milestone by rolling off its 10,000th backhoe loader from its assembly line at Greater Noida plant. The Construction Equip. Division of Mahindra & Mahindra offers three variants Mahindra EarthMaster VX, Mahindra EarthMaster SX & Mahindra EarthMaster 4WD. The flagship Mahindra EarthMaster VX caters to the top end of the market with its superior features, while the EarthMaster SX caters to the entry level customers with its highly competitive price. For higher fuel efficiency, higher production & greater operator comfort, CASE has designed the new EX series of loader backhoes in 76, 86, & 96 hp in India. Safety features: Safety is of paramount importance in every kind of machines. Compared to other types of machines, backhoe loaders remain a safe & stable machine. The operator seat, position of the operating levers minimizes the operator fatigue in Digmax II. The high quality electric harness ensures that there are no electric circuit related hazards that could harm the operator. There are a host of other features that make the machine safe. According to Sharma, Terex is committed to designing, manufacturing & selling safe products in compliance with the standards & regulations for markets in which they are sold & used. Certain safety & operator-friendly features of Terex range include: ergonomically designed cabin with tinted safety glass - wide glazed surface glass giving total visibility, larger & spacious cabin with enhanced interiors that provide safety during operations. Boom & swing lock facility is provided within cabin for operator to control the same while remaining in cabin, in-built loader arm locking strut that provides safety during road transport & idle position. ROPS cabin & operator´s visibility are some of the major safety & operator-friendly features in ACE backhoe loaders. Mahindra EarthMaster series comes with various safety & operator-friendly features. Remotecare feature takes freedom to the next level. It is an intelligent communication system that keeps the business owner or manager constantly informed about the machine through mobile phone based SMS updates. The machine also comes with futuristic styling, superior comfort & convenience. Mahindra EarthMaster VX offers specially designed joysticks that are not only easy to use but also minimize fatigue, thus allowing operators to work long hours.

Rental market: Backhoes have a major presence in rental market. Providing a comparison between owning & renting an equip. Deployment in excess of 12 hours a day/3,000 hours plus in a year justifies owning the machine. Utilisation below these levels would justify going the rental route. Corporates which have to execute big chunks of earth work & industries where loading re-handled material on a continuous basis is involved would find owning a backhoe loader highly economical. Short term & intermittent usage justifies deploying backhoe loaders on rental basis. Presently rental market of backhoe is in stress due to severe competition, population & dropping rental charges of backhoe loader. Approx. Rs 70,000 for 260 hrs. a month is the rent for backhoe. Backhoe market is undergoing a change in the buying pattern of its customer. No doubt, rental market in India is witnessing positive upswing. Nowadays, when projects are time-bound delivery based & contractors work on more than one project at a time, they have to go in for a hiring/rental business model. Majorly, contractors face difficulty in investing huge amount & increasing their capital expenditure during the initial stage of the project, also the maintenance & operating cost of specialized equip. can be unpredictable. Therefore, hiring a machine becomes a better option. With supply of equip. far exceeding the demand in the market, the rental rates are very low. This has resulted in spurt of demand in the rental market. Rental machine also takes away the hassles of equip. management. For the above reasons, India would dominantly remain the rental market.¨ However, Sharma suggests that the rental business lobby needs to reorganize, as they are very region-specific & scattered. Rental segment has a long way to go. We have serious rental players who are able to organize this business segment & have business models geared to provide greater value & ease in operation to its customers.

Customer focus: Service & Quality of Service are two critical aspects in the backhoe loader industry. Uptimes of machines are critical as the livelihood of the backhoe loader customer is dependent on the same. Hence ability to provide service at the site in the shortest possible time is two critical aspects for a backhoe brand to succeed. Customer service will always provide the critical competitive advantage translating users into repeat customers. They not only buy your product repeatedly, but also showcase their trust in you, in your product & in your service. Captive users & institutions like municipal corporations are our major customers. A break-up of the backhoe loaders categorized on the basis of user segment as follows. First time buyers, first time users, small & mid-size contractors put together comprises 92% while plant hirers, corporates, govt. bodies constitute the balance 8%. It is difficult to categorize the market on the basis of the application as backhoe is used for all conceivable works in India. However, the basic expectation of all customers still remains that of product quality, performance & value for money. Repeat customers are a testimony to quality & processes & CoS are thankful to them. Emission compliance: Emission norms on construction & material handling equip. are going to get stringent. Announcement by govt. regarding emission norms are subject to various factors like availability of cleaner fuel & various level advancement in engine design to meet the desired levels of particulates. No doubt, that these norms will take us towards a better environment, but on the other hand would need a lot of work to be done by all stake holders. Availability of cleaner fuel from oil CoS & investments for upgrading engine manufacturing facilities & technologies by engine manufactures will remain a challenge for implementing new emission norms. Mahindra is already geared up to handle emission norms. JCB has also given major focus on emission norms. The fuel efficient JCB ecoMAX engine fitted in our 3DX machine is a BS-III compliant green engine & has been specifically designed for Indian climatic, terrain conditions & machine usage pattern. Environment-friendly engines with low noise & vibration & longer engine life add to customers delight. Moreover, better filtration & fuel injection allows JCB engines to perform well in off-highway applications. Implementing latest emission norms will increase cost. Implementation of BS IV engines would increase input cost.

Price challenge

It is felt that the final sales price/pricing of backhoe loaders to end-users has also been one of the main reasons that the sales in this segment have been dipping in the past, apart from the sluggishness in the economy. With the cost of the machine & owning & operating cost increasing every year, it has been very difficult to attain viability by operating a backhoe loader, especially for the rental/unorganised segment. Definitely, a machine which can offer value for money proposition with lower cost & desired reliability will succeed in times to come & we are sure that our product fitted with world-class aggregates & lower owning & operating cost should make a mark soon. The unit prices of machines are already at disastrously low levels. The machines built in India are used 300% more than their European/American counterparts. Main reasons backhoe loader is the leading players in the CE segment are: low price as compared to tracked excavators of the same weight; mobility; & flexibility. However, if you pit the backhoe loader against a 7t excavator for digging below the ground level, the tracked excavator is far more efficient & productive. If you compare it to the front-end of a 7t articulated loader, the loader is again far more efficient as the backhoe loader has high turning radius & most of the ones in India are two-wheeled drives. As timelines get more critical & ample work is available, the trend will shift to specialized machines like tracked excavators, skid-steer loaders, small graders, compact loaders, etc. The biggest challenge would certainly be equip. finance. The financials of hirers in rural areas not being strong, finance becomes that much more difficult. The sales approach & product positioning needs recalibration in such markets as the buying criteria & behavior is different compared with the urban market. Price definitely remains a deciding factors but not the only factor. Major challenge in rural market is funding of equip. Many customers do not hold even a Pan Card. Financing houses are more funding with the external guarantor which is a big challenge. On pricing, every Co. has its own policies. Reducing the price is never the option but giving more value to the customer at the same price is always a better option. So, our stand obviously would be to give more value rather than just reducing price. Innovative delivery logistics at the new customer’s doorstep A few players are prepared while others are not, when it comes to delivery capabilities at doorstep of customers. Response time & turnaround time are the 2 measures of efficiency of after-sales support. This entails proximity to the worksite of customer/ projects. Dynamics of after-sales support is going to see a paradigm shift. It is a challenge & an opportunity that needs a bit of innovation.

Future prospects

Due to very nature of this multitasking machine, backhoe loaders will always dominate in terms of market share among all construction equip’s. They will register max. demand among all construction equip’s. But most, India will set the standard for backhoe loaders in emerging markets, considering that many OEMs are making in India, selling globally. With a huge existing population of machines in the market & project demands still to pick up, demand outlook remains grim in the short term, at least. Backhoe loader market is shrinking. Customers are opting for either wheel loaders or excavators instead of multipurpose machine. Moreover, a huge population of backhoe loaders is available in the market. Challenge would be to differentiate product from competitor. However, in the next few years, the size of the Indian CE industry, by volume, will begin to approach that of Europe. India along with China & Brazil is poised to be one amongst 3 large & growing CE markets globally. This has led to various new players entering the industry. We expect the CE industry to become hyper competitive with constant pressure on existing players & new incumbents to continuously improve their value proposition & cut costs. The high margins that have traditionally been earned by market leaders will come down. The country is going through a turnaround phase of its infra. dev., & backhoe loader is a machine which is known for its versatility always takes the centre stage. Unique to India, backhoe loaders will continue to be the star product for the earthmoving & construction equip. industry. In fact, this equip. has educated the world of its multifaceted capabilities in support of infra. construction in probably the most innovative applications to achieve the desired construction speeds at economical costs. Now it will play a similar role in the rural dev. of India. Rural roads & rural infra. prospects are very imp. in driving the revival of backhoe loader industry.


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