The Backhoe loader sales are expected to increase by over 32 percent in next 5 years on the back of investment in infrastructure by the Indian government. The sale will jump to 28,000 machines by 2020 from 21,192 units sold in 2015, according to Off-Highway Research report released recently.
The Backhoe loader is a multi-purpose machine and allowed to travel on roads supported the fact of its demand. Shortage of manual labour due to government sponsored rural employment programmes is another major factor which will contribute to the growth of backhoe loaders in the long term, said the report.
Despite it is expected to see 32 percent growth in sale by 2020; however, it will not match to the sale of backhoe loaders witnessed in 2011, when 33,595 units were sold in a single year. Report estimates, the active Backhoe loaders population is 195,000 in the country.
Report noticed, a large number of machines are purchased by first time buyers or users and small operators, in which customer friendly finance schemes plays a crucial role in owning the machine. Backhoe loader market is quite large compared to other construction equipment, therefore resale of used machine is simpler and chances of getting good price are also higher.
Backhoe loader is the major demand driver for rental market and will also boom with the increase in construction activities in the country in coming years.
After 2011, every year sale of backhoe loaders has been decreased. In 2015 its sales have contracted as compared to 2014 but henceforth it is expected to witness better sale every year.
JCB is a market leader in backhoe loader segment with a market share of almost 75% and it was also a leader among exporting country-made loaders and exported some 2,171 machines last year.
As the report cited, government investment in infrastructure sector is an essential factor of further growth in Backhoe loader market and expected to drive its sales.
Various new Metro rail projects and expansion of existing projects in various metros, tier-I or tier- II cities, target of 15,000 km of road and highways construction in the country, coastal roads in Mumbai, creation of Rs 40,000 crore National Investment and Infrastructure Fund (NIIF) to invest on viable infra projects, setting up of Infrastructure investment trusts (InvITs) with the aim raising money for infra projects from capital market, Smart cities Mission initiatives, government plan of setting up regional airports, construction of commercial complexes due to rising demand of office space in all the major cities and others would raise the demand of this multi-purpose equipment.
In the Budget 2016-17, the government outlay Rs 2.21 trillion investments for creating and upgrading country’s infrastructure in ongoing financial year.
These investments and initiatives by government would surely drive entire construction equipment market, especially this multi-purpose equipment.