When buying a backhoe loader, we consider various parameters such as initial cost, performance over a period, downtime, ease of maintenance, availability of spares at economical cost, and effective aftersales service,? says Ulhaas N Bhole, Vice President - Contract, Atlanta. ?Brand does not play a major role because all backhoe loaders have basically similar kind of operations. We look for parameters such as bucket depth, average cost of maintenance and ease of operation, and of course, productivity,? says Ataullah Rahman, Manager-Operations, SJ Construction. And these are the very facts that keeps an OEM on tender hooks, make him innovate and innovate, on a continuous basis.

Despite a heavily contracted backhoe market, almost by one-third; ever increasing competition - not only from new entrants but also from other product segments such as wheel loaders, skid steers and mini excavators; and heavily skewed supply demand equation, OEMs have not left any stones unturned. For the market leader, it is to protect and retain its customer base, while for others it is to bite into the major pie and also to develop new customer base spread across geographies. Concepts such asTotal Cost of Ownership (TCO)have assumed greater importance in an environment where sales continues to decline.On the other hand, end-user segments are grappling with issues like shrinking business and escalating costs of operation and growing overheads. It was logical for OEMs to innovate further and come out with value-added features that help enhance productivity, whereas the end-user segments? major focus is on fast and better output, efficiency of their operations, etc. In brief, improving machine performance, optimising O&M cost, and ease of operation has assumed greater importance. And that is what the backhoe market has been witnessing for the past two years.

Pushing the frontiers
In spite of the prevailing economic slowdown and its adverse impact on the earthmoving equipment sector, in the last couple of years,backhoe loader market has witnessed a spurt of new/upgraded models. LeeBoy India, which launched its first backhoe loader-the LeeBoy 699 (99 hp, 7.6T) in July 2013 - is all set to launch its new model - the LeeBoy 679 (80 hp, 7.5T) in November 2014. With a main objective of helping its customers increase the productivity and offer enhanced operating experience to the operators, Terex launched an upgraded version of TLB 740 and 844 series of backhoe loaders in March 2014.In July 2014, Caterpillar unveiled its upgraded model, 424 B backhoe. JCB India introduceda new version of India?s highest selling construction equipment JCB 3DX - the new ?JCB 3DXcellence? in 2013; in November same year, CASE launched new EX Series backhoe loaders - the 770 EX, 770 EX Magnum and 851 EX - ranging from 76 hp to 96 hp. Escorts launched Digmax II in 2013 and ACE revamped its existing range with some added/improved features and renamed it?Digmaster.?

Says Amit Gossain, EVP - Sales, Marketing and Business Development, JCB India, ?Product improvement is a continuous process at JCB. We add innovation and hard work to our customers? valued feedback - the result of which is the launch of industry changing products time and again. This time, we have launched our next generation backhoe loaders. These new, innovative backhoe loaders will maximise the returns and substantially. We have received an overwhelming response from our customers till now. This range is developed to suit different user segments for different applications. Our customers are dedicated and hardworking and similarly, want machines that can work in any terrain, in any weather condition - our customers want robust, rugged and reliable machines. At JCB, our endeavor is to provide our customers with machines, which provide higher return on investment and the best-in-class fuel efficiency.

According to Sunil Tiku, Senior Director - Sales& Marketing, Terex Equipment, ?The upgraded TLB backhoe?s further strengthened its position as the fastest digging and loading backhoe loader in its pack especially in the toughest strata. The reliable and efficient TLB 740 and 844S, will confidently beat any competitor in a match of digging, loading or dozing while SmartUC hydraulics on this machine helps save diesel even while maximising work output. Terex backhoes perform faster while digging and loading at lower operating costs.?

?The 2WD variant of the 679 is intended for the domestic market and we are also launching a 4WD variant for the Latin American and other price-sensitive markets, informs Amarnath Ramachandran, Vice President & Head, Business Development, LeeBoy India. He adds, ?Our focus while engineering and manufacturing all these products has been to ensure that the machines are of high quality and serviceable globally. They are fitted with state-of-the-art aggregates and features that increase productivity for the end-user. The machines we make are sold in India and overseas.? ?We have done some quality upgradation in the improved range with changes in engine, cylinder, structure, etc. Apart from the technical changes there are changes in cabin, bonnet, etc,? says Dilip Magee, Head - Sales & Marketing (RCED & EED), Action Construction Equipment. He opines, ?We did these changes based on the feedback from our customers on certain problems, which they were facing. We also considered the customer feedback on added features they are looking for in the near future. Our customers appreciated the new look and improvisation of our backhoe loader range. Our machines have evolved and our customers are using these in difficult terrains of Himalayas with rock breaker, as an attachment. They are very happy with the quality and performance of the machines. We are hopeful that in the coming months we can do better.?

Rajinder Raina, General Manager - Marketing, Escorts Construction Equipment, says,?Like any new product, Digmax had its share of teething problems. It was obvious that all these problems had to be addressed but what was done additionally was to incorporate features that made it a product with contemporary technology and features. The structure has been made much more robust through improved design and metallurgy. A number of safety features have been added. There is a strategically placed SOS button for the operator when he needs external help. There are foolproof systems like audio warnings against wrong operations by the operator when the outriggers are engaged.?

Raina claims, ?Escorts has entered the market with a clear objective to reach the number two spot in next 2-3 years? time from now and this would be possible only by having a top end product. In a de-growing market, Digmax II is the only product that has shown consistent growth which is a proof of positive response.?

Says Amit Bansal, Sales and Marketing Director, India Region BCP Division, Caterpillar Inc,?The Cat? 424B backhoe loader is recognised as best in class in performance, productivity, reliability and durability. In view of customer requirements, we have designed two models to choose from depending on the job and application requirement. The hydraulic system of the new 424B has been completely redesigned to deliver reduced fuel burn. It offers outstanding fuel efficiency in its class and is more appropriate for the hiring segment. Whereas the other model 424B HD delivers superior productivity and will appeal to customers who want to complete the job in a shorter time period. The 424B HD has heavier axle and transmission, bigger hoe bucket and sturdier hammer ready boom to meet more challenging tasks. Both the models have increased loader bucket capacity and also have the option to switch controls from ? +? to ? x? or vice versa.?

Design improvements
All the new models launched in the last couple ofyears have multiple features that help the end-user enhance productivity, reducefuel consumption and optimise O&M cost, and ease of operation and maintenance. OEMS have focused more on enhanced efficiency of engine, hydraulics, transmission and structural stability that can bring more value to the user.

Says Gossain, ?JCB engine is most fuel efficient high torque at low rpm engine in the industry, which provides lower operating cost to JCB customers. Now we have come up with 76 hp engine on 3DX Xtra model and it will now give 10 per cent better productivity. Similarly, JCB hydraulics is well proven in the market for working in hardest of strata with maximum forces to get highest productivity per litre of fuel. The structures are the backbone of these most reliable machines and optimised for Indian working conditions.?

?Our USP is because of using a time-tested and well-accepted Kirloskar 76/90 hp engines. These engines are not only reliable but also has low operating and maintenance cost. Its spare parts are economical and available across the country, even in smaller towns,? says Tiku. ?Terex machines uses Carraro axles and transmissions, which have proven to be very reliable and low on maintenance cost. Our axles and transmissions do not come in for an overhaul for upto 3-3.5 years while, for any competitor the time to open up and overhaul their axles is at best 12-15 months,? he adds.

According to Tiku, Terex has been focusing on delivering reliability and economy in fuel consumption and maintenance, at a level substantially better than any competition. Terex backhoes have been developed in India for Indian market from application and maintenance point of view. Tougher, stronger structural parts such as boom and dippers, heavy-duty stabilizers with adjustable wear pads have been introduced to achieve longer service life than competition in Indian tough applications. Improved protected hose routings and other hydraulics are designed in segments to achieve lower replacement costs and longer uninterrupted working.

Elaborating on the design upgradation in the new model,Tiku had this to say. ?The key changes over the existing model include re-designed swing and mast assembly and ergonomically designed cab interiors and overall styling. Heavy duty slew cylinders fitted on the swing mast assembly generates up to 18 per cent higher torque for side swing movement, enabling smooth backhoe operations in demanding situations while handling higher payload.Also, a reduction in the cycle time or quicker return to dig position gives operators a chance to improve productivity.?

According to Raina, the productivity of Digmax II makes it the best in class, which in turn results in low fuel consumption per unit material excavated/loaded. Fuel consumption in production machines is not a function of engine on a standalone basis. The hydraulic circuit incorporates logic through a priority valve, hydraulic oil dumping when the machine is off peak load/low hydraulic horsepower. Fuel constitutes 60 per cent of the cost of O&M, the cost of output is very low for Digmax II as against the competition and this is one its USPs. ?Self lubricating bushes and other wear out items give a much better service life and therefore low maintenance cost,? he added. ?The LeeBoy 679 comes with the 4-stroke, turbo-charged, Cummins B 3.3 engine (80 hp @2,200 rpm). This turbo charged engine also has a charge air-cooler to reduce NOx emissions thus making it more environmentally friendly. This is a globally serviceable and very efficient engine,? says Amarnath. The LeeBoy 679 has an open-center hydraulic system with a tandem gear pump that is equipped with a high-low un-loader circuit to enhance fuel efficiency. According to him, the open-centre control valve has been fine tuned in conjunction with the supplier to ensure contemporary movements. Cable-remote operated stabilizers with pilot-operated check valves and inbuilt thermal relief are provided to ensure no creep while working. The open-center system while less efficient than the closed-center one due to the 10 per cent difference in the efficiency of the piston pump vs gear pump is a compromise on price.

Amarnath further adds, ?The LeeBoy 679 is fitted with the proven Carraro transmission, which is commonly used on most models in India and abroad. This is a 4F4Rsyncro-shuttle gear box. It has a mechanical shifter with an electric forward/reverse/neutral controller.?Structures are common to the 699 and 679 and are robust, hi-tensile steel structures that cater to the most demanding applications. Says Magee, ?The engines are tried and tested and are in use by major manufacturers for many years. The basic advantage of these engines is that the fuel consumption is quite low. Also, spare parts are easily available even in remote places. The price is also economical. The hydraulics and transmission products are from David Brown, Carraro and Valvoline. Structurally we have changed the boom dipper and loader arm, and there were some structural failures which have been eradicated now.?

Ease of O&M
Most of the OEMs have gone that extra mile to see drivers? comfort levels, ease of maintenance and serviceability, and ease of operation are enhanced. Says Gossain, ?Operator comfort and safety are paramount for JCB. Our cabins are fitted with world-class operator control features, operator seat, space for the operator to keep his belongings,heat insulation, alerts for machine operation, etc. We also offer air conditioning in our backhoe loaders.? He adds, ?JCB backhoes are the easiest to service, given its unique design of fully opening bonnet, which provides easy access to the engine compartment. Also, our backhoes have a detachable plate on the cabin floor, which gives access to transmissions.?

?The cabin is now fitted with suspension type operator seat, enhancing operator comfort reducing fatigue over long working hours. An FM radio set with speakers and mobile charging point has been included as standard fitment,? informs Tiku.?Operator comfort, suspension type seat, high all around visibility from cabin, sensitive levers and above all safety and reliability of the cab structure makes for a safe and great working environment for the operator.Besides, the cab all other touch points, like daily and preventive maintenance ports for the engine, transmission, axles, structural joints, pins, bushes and above all hydraulic line inspection has been made easier and simple. A five minutes walk around the machine is good enough to get to all of these and helps an operator keep this machine fighting fit?, Tiku adds.

According to Raina, backhoe loaders are serviced at work sites where the availability of tools, tackles and other support is minimal. A good machine shall be easy to service with minimum help.

?All the major components that need preventive maintenance are accessible just on opening of the bonnet. The cab position and design give wide angle visibility and comfort to the operator who is to carry out his job for more than 8 hours on the trot,? explains Raina.

According to Magee, major features in backhoe loaders of different makes are common. There are no great advantages on one over the other. He avers, ?For ease of operation, we have put a dump switch to the gear lever, which was not there earlier. The cabin has been redesigned with better visibility in mind. Operator comfort has been taken care of in the new model and is now more comfortable in our machines than earlier. We have changed the bonnet. Earlier we were providing a tractor type metallic bonnet, which was very hard to lift and serviceability was also not good. But now we have designed the structure more aesthetically with better and lighter material. It is easy to operate and comes with hydraulic jacks which can automatically lift.?

?LeeBoy has built-in features to enable operators to expend less effort with much greater precision of movement during working. This helps provide better controllability, maintain motion under any flow or load and take away the strain from the operator. Overall, they maximise efficiency and productivity and reduce cycle times,? says Amarnath. According to him, the specially designed cabin provides excavator like comfort to the operator. It is the only cabin with curved glass to allow for excellent visibility of the swing area. The tinted glass is an additional safety feature. Ergonomic joysticks can be adjusted to an infinite amount of positions to enable maximum comfort for the operator and minimise fatigue. Cable-remote operated stabilizers with pilot-operated check valves and inbuilt thermal relief are provided to ensure no creep while working.

Amarnath further adds, ?When the operator is operating the backhoe, the left-side features a large, easy-to-read, standard operator display for the starter switch, tachometer-cum-hour metre, warning and indicator lights. The front panel houses the electronic instrument cluster and rocker switches; the return to dig function feature for automatic bucket rollback and boom lowering after tipping enables the operator to handle only the machine driving functions when operating the front end loader. Ride control is enabled to ensure minimum spillage from the loader bucket on bumpy terrain for loading operations. This also stabilizes the steering and ride comfort when operating the loader.

According to him, the aerodynamic three-piece hood design provides the operator access to all necessary maintenance points easily and quickly thus spending less time and effort; sealed pins and bushings extend the lifetime of linkages preventing entry of dust or blockages and increases the time between service periods.

Telematics solutions
According to Magee, the use of telematics depends on the customer and the nature of work, and in India, especially in the backhoe loader segment this trend has not caught up as the market is not still matured for such advanced systems. He says, ?When we sell these machines to customers abroad, they even ask for GPS to be installed in the machines. If the customer wants, we can incorporate these technologies to the machine. But in India, the customers don?t want such features on the machines as the market is not that matured. Right now, we only have hour metre.?

Says Amarnath, ?While we offer the Insta-i as an option on other products-LeeBoy?scustomised telematics solution from Trimble for monitoring critical parameters like the utilisation, fuel level, and location of the asset via google maps, maintenance and health of machines across multiple sites - we have not seen much of a response to this in the backhoe loader segment. Interestingly, a lot of finance companies like this asset location feature help them track down defaulters.? Amarnath informs, ?The Insta-i solution will enable customers to centrally manage their LeeBoy machines and improve the performance by minimising wastage, efficient analysis and reporting of data.With mobile alerts enabled, the Insta-i system enables real-time data at the customer?s finger-tips to aid well-informed decisions.? Says Raina, ?Tracking technology is gaining acceptance fast. Digmax II is fitted with equipment monitoring system, which is finding favour with the owners including the hirers as they can monitor their machine despite being away from the site. This includes being able to keep a tab on fuel consumption and other vital parameters including the uptime of the machine and precise location.?

Backhoes v/s mini excavators
Will the increasing competition from other product segments such as wheel loaders, skid steers and mini excavators impact the backhoe loader market? Says Amarnath, ?The 7T excavator, which can be transported inside a tipper, is certainly far more productive than backhoe loader. However, in India, this still hasn?t managed to garner the popularity that it should have and hence hasn?t made a significant impact on the backhoe loader market. Nor has any other product. In advanced markets, backhoe loaders have given way to mini-excavators, both tracked and wheeled. Also utility work is done by skid-steer loaders. Indian market will also eventually come around to this. Only time can tell when this will happen.?

Raina is on the same page as Amarnath. According to Raina, the only product that can compete with backhoe loader is a mini excavator. But it is still about a 500 units market. The volumes might at best get doubled in next few years. Backhoe loaderstill remains the highest volume market in earthmoving industry.

According to Gossain, there is a gradual shift towards specialised equipment and machinery. He says, ?With the growing complexity of projects, we are now seeing an increase in the use of specialised machinery that will continue to rise in the coming time.?

Gossain adds, ?However, JCB backhoe loader continues to be the most widely used equipment in India and we constantly keep upgrading the machine to meet the growing requirements of our customers. Due to its excellent maneuverability and its ability to multi-task, backhoe is practically used at every construction site - like for building dams, multi-level flyovers, power plants, etc. JCB offers an equally wide range of attachments, which makes the backhoe loader all more versatile.?

Magee strikes a different note. ?Certain companies have created confusion by introducing low-cost machines with backhoe and loader attachments on tractors, etc. By introducing such equipment, these companies are confusing the customers. The customers, who can?t afford bigger backhoe loaders, pitch for smaller machines where they can get cheaper machines with easy finance. Even the rural banks that finance for tractors also finance these smaller machines because of reduced risk factor.?

Challenges
According to Amarnath, the biggest challenge is the general economic situation where all major infrastructure companies are financially stretched and there is a total lack of liquidity in the market. He adds, ?The other challenge is price as most players seem to be bent on keeping very low margins as compared to other Asian markets. While people pay much more for houses and toll on roads than they did 5-10 years ago, the earthmoving rates seem to have come down. The change will come about when Tier-IV emission norms are enforced.?

Says Magee, ?The major challenge we face is sustaining the market share. As more and more machines are out of job, the rental rates have dropped considerably. So now, people have better options in renting rather than purchasing a new machine. Financing is also an issue as everybody wants top customers for finance.? He further adds, ?The previous government at the Centre before leaving had announced tenders of Rs 20,000-30,000 crore, but they have not yet bid. The current government has also given tenders worth Rs 15,000 crore, which are also not yet taken. When there is no money in the market, people have no confidence of investing in those tenders, which is a major issue. Recently, a Malaysian company has taken up a major road tender in India in which the Indian companies didn?t even participate. This shows the lack of confidence of the companies in the present time. We hope in six months, things will improve. There are opportunities as a lot of projects have to take off but the confidence level is low. Till now the government has talked, the action is yet to be seen.?

Money matters
According to Magee, financing is quite challenging and a major issue. He says, ?Financing companies are very cautious and selective in approach. They don?t want to go to interiors and finance equipment there. They are very choosy on the profile of the customers and don?t want to finance first time buyers (FTBs). This is a major issue, which needs to be tackled. In big cities like Delhi, projects are held up while in rural areas, projects are happening and buyers are looking for equipment where the financing companies don?t want to enter. This is a big gap which needs to be filled.? Most of the OEMs are on the same page. According to Tiku, the availability of finance, especially for the first time buyers is still a huge challenge. Besides the financial risk the equipment risk also remains high. He adds, ?We at Terex are working towards helping the funders manage the equipment risk. Our service points, mean time to restore, parts availability is perhaps the best in the industry. Funders are confident once the buyers indicate his choice of operating Terex equipment.?

Says Amarnath, ?LeeBoy India has a tie-up with most of the major finance companies. However, the real challenge here is the profile of the buyer. So, when the buyer?s financial profile is good, everyone jumps in to finance him, but when the financial profile is poor, financing the machine poses a challenge.? According to Raina, Plant hirers comprise a sizeable chunk of the buyers. In the current scenario it?s about 75 per cent of the total market size. Financing of FTBs remains a challenge particularly where the buyer is looking for funding of more than 75 per cent of the asset value. NBFCs are that much more careful that adds to the challenge.

Tax web
The varying tax structure seems to have a bearing not only on the cost of a backhoe loader but also over the overall growth of the backhoe loader segment. Most of the OEMs and end-user segments hope for the speedy implementation of GST that can give a breather. Says Tiku, ?It is sad to see that India is still not an economic union. The taxation web, over these years, has taken preposterous proportions. However, with great business minded political leadership and a reforming minded financial system will guide us through these dark ages and deliver an economic union to its people, who will then take India to its logical place in the world of commerce. The introduction of GST will definitely bring about a level-playing field.?

Says Amaranth, ?GST will certainly help bring a level playing field. Entry tax is also a disadvantage in certain states. But while some manufacturers will have regional advantages this doesn?t have as much of an impact as it works both ways since manufacturing is spread all over the country.?

According to Raina, GST would be a huge relief for all the manufacturers as well as buyers. Not only will it even out things but also make business that much easy. We believe that GST can bring in a level-playing field for the equipment players. It all depends on the government policies and how industry is taking it forward. GST has been talked about for the past five years but nothing has happened. The respective stakeholders could not come to a conclusion on the implementation of GST. Certain states are not ready for it and some political interference also led to the uncertain situation of GST.

Honey, we?ve shrunk the market
That is the least any OEM wants to hear. It?s a fact that the market has been reduced to one-third of the actual market size, and currently, supply is more compared to demand, and the industry is not very hopeful for a turnaround, especially in this financial year.

According to Tiku, the plant hiring segment, a major demand puller is not yet out the woods. Money has not yet been paid to them by the original project contractors, for various reasons.Typically the demand from plant hiring segment will follow the capex programmes of large contractors, and we are seeing some good movement in this segment. We hope that in January-March quarter 2015, plant hirer segment will start contributing to the CE industry growth. According to Amarnath, ?In 2014, the demand for backhoe loaders is estimated at around 25,000 units in India. Most this demand is from the plant hiring segment.

Says Magee, ?Right now, the demand from hiring segment is very low. In the hiring segment, most of the machines are out of job now. The market is still to come to the growth path and we expect the market grow in future. When the market grows, the hiring segment will first utilise the machines that are already idle with them. New machines will come at a later stage, probably six months later. It may be a good time for the equipment manufacturers from the next financial year.?

Can spring be far behind?
According to Raina, the installed capacity of all manufacturers put together is more than double of the current demand. ?Our current market share is 5 per cent at present but what is noteworthy is that Escorts has grabbed this market share in the shortest period compared with any other player in the last decade. We are targeting a much higher market share in the next 12 months.?

Says Gossain,?The demand for all the construction equipment has declined including the backhoe because of the ongoing slowdown. However, even in these challenging times, JCB has succeeded in creating new avenues for business through generation of newer markets.?

Tiku sums up with a high note. ?The demand supply is still heavily skewed with demand much lower than what manufacturers can build and supply. Manufacturers with large capacities are still having upto 30 per cent idle capacity. We at Terex are moving in line with our plans to hit 10 per cent market share by the end of this fiscal. From there we will then consolidate with new product launches and innovative marketing initiatives in FY 2015.?

Recent Launches

• LeeBoy India is all set to launch its new model, the LeeBoy 679(80hp, 7.5T) in November 2014
• Terex launched an upgraded version of TLB 740 and 844 series of backhoe loaders in March 2014
• In July, 2014, Caterpillar unveiled its upgraded model, 424 B backhoe
• JCB India introduced a new version of JCB 3DX - the new ?JCB 3DXcellence? in 2013
• November 2013, CASE launched new EX Series backhoe loaders - the 770 EX, 770 EX Magnum and 851 EX
• Escorts launched Digmax II in 2013
• ACE revamped its existing range and renamed it ?Digmaster.?

?GST should come into force soon.?

We are tendering new projects and once these projects start, we have to go for new machines, says Ulhaas N Bhole, Vice President-Contract, Atlanta, which is currently involved in three road projects - 54 km Ropar-Dora project in Punjab, 117 km Mohania-Ara project in Bihar, and 205 km Guwahati Bypass-Lanka project in Assam. Excerpts from the interview....

Does brand play a vital role while opting for a backhoe?
Yes, definitely. When we talk about backhoe loaders, the first brand that comes to my mind is JCB. We have been using JCB backhoe loaders for all our projects. Compared to other brands, backhoe loaders offered by JCB have proved their consistency and efficiency in performance for the last 25 years. So, [naturally] brand do play a major role while selecting backhoe loaders.

Backhoe loaders are [actually] rugged machines. It is very easy to use. JCB operators have been operating these machine for years and their operators need not be trained. Hiring a JCB operator is like hiring a car driver. JCB?s 3DX is a very economic machine with fuel efficiency. We are getting a very good service support from JCB through their wide service network across the country. Availability of spare parts is also not an issue.

What are the major parameters that you look into while buying a backhoe?
We look into various parameters like initial cost, performance over a period of time, downtime, maintenance, availability of spare par