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If numbers are to be believed then the global heavy construction equipment industry is projected to grow at a CAGR of 6.80 per cent from 2015 to 2020 of which the heavy earth moving equipment is the fastest growing segment across the globe and India is no exception here. In fact, the heavy earth moving equipment segment in the country accounts for close to 70 per cent of India's construction equipment market.
On the basis of operations performed by the various machines in the segment, the earth moving equipment industry can be bifurcated into excavators, loaders, backhoe loaders or backhoes, construction tractors and others like grader, scraper etc. Among all, Backhoe Loaders (BHL) account for more than 65 per cent of heavy earth moving equipment segment (followed by excavators) and 40 per cent of total demand of construction equipment in India.
What is a BHL?
In order to understand the growing popularity of BHL in India, we need to first know about their definition. BHL consist of a tractor, front shovel/bucket and small backhoe in the rear. Being very versatile equipment, they are generally the only piece of heavy equipment brought onto small to medium landscaping projects. Backhoes have the capacity to easily duplicate the work of bulldozers, front end loaders and excavators. What more? BHL can be driven directly to the different job sites as opposed to other specialised machines which need to be towed into the site and require external power sources. This makes backhoes most popular construction equipment and result in their large market share.
Present market scenario
The backhoe market in the country has been growing at a rate of close to 37 per cent CAGR over last few years and this pace is likely to continue in the coming years too. As a matter of fact, India is the second largest market for backhoes in the world. This segment is perhaps the only one in the construction equipment sector in India that has reached the stage of maturity and scale where exports could be considered. The market for backhoes is spreading eastwards, largely due to the way in which India is making progress in the infrastructure and construction segment.
JCB India and Mahindra Construction Equipment are the market leaders in the segment with a share of over 70 per cent followed by other players like Caterpillar India, ACE, Escorts, Terex Equipment and few more.
BHL are expected to account for over 68.23 per cent of total sales of construction equipment by 2018. This is because there are clear benefits of using backhoe loaders over manual labour and traditional methods like improved quality, timeliness, better project financials and safety. Further, factors such as increased demand for mechanisation will also work in the favour of growth of BHL in India.
In the coming times, with more players entering the market segment and increased competition among them, the price competition is slated to increase. Also, since backhoes are used for all construction applications, the backhoe rental market will see a boom in the future. Many big players have entered the backhoe rental market and thus, BHL on rent will be a more common norm in the days to come.