Backhoe rebound: demand increasing in developing markets

Sales of backhoes are rebounding after the lows of 2008 and 2009, and developing countries are fuelling much of the demand. Murray Pollok reports on some of the latest models jostling for the attention of rental purchasing managers.

Backhoe loaders aren't popular everywhere - you will still struggle to see them in places as diverse as China and Germany - but one of the ‘Swiss army knives' of the construction equipment market remains a key product in most other markets.

And neither is this popularity confined to developed construction equipment areas such as western Europe and the US, developing economies like Brazil and India are big backhoe users.

In fact, of the 65000 backhoes produced in 2010, around 25000 were sold in India - where JCB among others has a big backhoe manufacturing operation - and Brazil's growing market is attracting the attentions of several manufacturers, including Volvo, John Deere and JCB. The latter's new Brazilian plant, due to open later this year, will start by producing backhoes and excavators, while John Deere announced last October that it is building an excavator and backhoe facility in São Paulo.

After falling dramatically in 2008 and 2009, global backhoe sales increased by around 35% in 2010 and unit sales up to August 2011 were up around 33% on the previous year.

Julian Carder worldwide product marketing manager for JCB's backhoe loader business unit, tells IRN that the increases in sales of backhoes has exceeded that of other key products such as mini excavators and telehandlers, reflecting its versatility and enduring appeal. Of equal relevance, however, is its ubiquity in the fast-growing developing markets.

This rebound in sales - part of which reflects increased demand from rental companies - has prompted a round of product development from the sector's most important manufacturers, including JCB, Caterpillar, Case, Terex Construction, Volvo, New Holland and John Deere (in North America).

JCB has been incredibly active in developing its backhoe loader line - as befits one of the original developers of the product. Its 2005 launch of the TorqueLock drivetrain, which reduces fuel consumption on road travel and increases travel speeds, has been a major benefit for customers, and that was built on in 2010 with the launch of the ECO 3CX and 4CX models.

The ECO machines reduce fuel consumption by between 6% and 16% through the use of the EcoDig feature, with three hydraulic pumps rather than the usual two allowing the machine to operate at lower speeds - typically at 1800 rpm rather than 2200 rpm.

It is worth remembering that this technology is not yet being incorporated on machines sold in India and other developing markets, and the backhoes to be built in Brazil will mainly comprise the standard 3C model.

Keeping up the pace in technological improvements isn't easy, but 2012 sees a number of significant developments in JCB's backhoe range. First of all, the company will start to introduce its own Stage IIIB emission engines, which meet the regulations without the need for a diesel particulate filter (DPF). The Stage IIIB engines will be required on JCB's models from the 3CX up (that is, not on the smaller 1CX, Midi CX and 2CX models).

Flexibility rules mean that the Stage IIB versions will be phased in, a process that could take anything from five to 12 months, depending on levels of demand. What is clear is that there will be a significant price increase on backhoes using the newest engines, something that might prompt customers to place orders before the Stage IIIB models are the only ones available.

As Julian Carder puts it; "If I was a contractor I would want to order now."

Although cost increases are one side of the Stage IIIB coin, but fuel efficiency increases of up to 10% is a significant side-benefit. Fuel efficiency is a benefit to end users rather than rental companies, but this is becoming a more important sales tool for rental companies as carbon footprint considerations become more important.

Aside from the Stage IIIB engines introduction on the backhoes, 2012 will see the introduction of a new gearbox on the manual shift models - a gearbox that will also produce 3% fuel savings through greater efficiency. Also new is an hydraulic quick hitch for the 3CX and 4CX models.

In terms of the model line-up, one machine getting a major overhaul early in the year will be the 1CX, JCB's smallest model, weighing 2.79 t and with a skid-steer type steering mode.

The "comprehensive upgrade" includes a new appearance, 100 mm longer loader arms, an extending dipper option, the introduction of optional servo controls and a power management system.

The rear extended dipper adds up to 500 mm to the digging envelope, taking maximum dig depth to 3.05m, and the power management system will increase power when driving into a pile with the front shovel.

There will also be 500 mm more legroom in the cab, and the extended dipper and longer loader arm will add around 155 kg to the machine's weight.

Another backhoe supplier developing its range is Terex Construction. At the start of 2011 came the TLB 840, a 14 ft dig depth class machine replacing the 820 and 860 models, and later this year will come a new, larger unit, the 890, a 15 ft class unit that will replace the 860 and 880 machines.

The TLB 840 was a major update on the range and will be the model for the new line. Jon Beckley, global product manager at Terex Construction, based at Terex's Coventry factory where most of Terex's backhoes are built, says a lot of attention was given to the cab, with more space, better operator visibility and improved air conditioning.

While digging and loading performance is crucial, Mr Beckley points out that a good cab is important in today's market; "Some people will buy a machine because they've got a good quality operator and they want to keep him."

Other than the cab, improvements over previous models include the shift to an air cooled 70 kW Perkins engine, which Mr Beckley says improves engine response, lower boom height, a curved backhoe boom design that allows for closer loading into trucks, and the use of a new rear axle with improved braking performance.

Not all customers want high-specification machines - rental companies in particular - so Mr Beckley says that a low-spec version of the 840 could be produced later, although not until the new 890 is out of the way.

The 890 - slated for a launch in the middle of this year (and possibly on show at Intermat) - will share many of the features of the 840, including the loader arms, axles and cab, but differs in being a 15 ft dig depth class machine and with 20 in (56 cm) front tyres rather than the 18 in (46 cm) tyres used on the 840.

The new unit, featuring a Perkins 100 kW engine, will also move to closed centre hydraulics rather than open centre hydraulics, which will increase the number of simultaneous movements on the machine. The 890 is likely to be around 10-15% more expensive than the 840.

The 840/890 units are designed to accommodate Stage IIIB engines with aftertreatment technology, although transition rules, which give manufacturers some flexibility on when they start to sell machines with the new engines, means that the Terex backhoes on show at Intermat in April may not be Stage IIIB.

Mr Beckley says there will be a price premium on the Stage IIIB backhoe models, perhaps as much as 15%, although there will be some fuel efficiency gains as a result of using electronically controlled engines.

"Some customers are already running equipment in higher hp bands [where Stage IIIB engines are already required] and are already used to it", he says.

In addition to fuel efficiency gains, Mr Beckley says the new engines will also provide a better performance at lower torques, before the turbo is engaged.

Longer term, Terex is planning to add a bigger machine. The 990, a 4WS model, is now on the drawing board and likely to be launched at the start of 2013. This will replace the 970 and 980 models and will use 24 in front tyres.

There is some demand for a 17 ft dig depth class machine, but this would require larger tyres again and a completely new chassis design. This is not on Terex's short- or medium-term agenda, although it could be on the cards longer term.

Meanwhile, another famous name in backhoes, Case, added a new range of machines last year, with four new Construction King T Series models in the 8 to 9 t operating weight classes. The new models are the 695ST and 590ST - both with 82 kW engines - and the 72 kW rated 580ST and 580T.

Customers have the choice of either Powershift or Powershuttle transmissions, pilot or mechanical backhoe controls and two- or four-wheel steering. Compared to previous models, the T series range offer a 10% drop in fuel consumption, a 20% improvement in loader productivity and a 30 cm reduction in transport height. In addition, all four have a 1.2m3 capacity front loader bucket as standard, which is 20% larger than the previous models.

Case says it built its 500000th backhoe in 2005 and is now "well on the way to making 750000 loader backhoes".

A much more recent entrant to the backhoe market is Volvo Construction Equipment, which launched its first models in 2002 and last year launched its second generation machines, the new BL61B and BL71B backhoe loaders (except for the Americas, where variations are sold under the BL60B and BL70B names).

The big change with the new range is a much bigger cab - 20% bigger and with 30% more glass area - and a similarly increased fuel tank, giving longer operation between refuelling. The machines, which also have a curvier, updated look, have operating weights ranging from 7.1 t to 9.8 t, and gross power of 64 kW to 74.9 kW.

Fitted with either 18 in (46 cm) or 20 in (56 cm) front tyres, Volvo says the machines have a "small turning circle and are extremely manoeuvrable, as well as easier to position on site."

Volvo CE's product manager for backhoe loaders, Kurt Deleu says the new B-Series backhoes "represent a quantum leap forwards, which we are confident will enable us to satisfy the market demands of the building and utility segments."

BOX STORY
Caterpillar celebrates backhoe milestone

Caterpillar reached a milestone in November last year with the production of its 250000th backhoe - the first unit having been made 26 years ago.

The company's BHL range is now in its fifth generation and started production in Leicester, UK - where unit number 250000 was made - but has since also been built in the US, Brazil and India.

Backhoes have a wider significance for Cat. It was its first volume product below 100 hp and, says the company, "was seen at the time as a game-changer, allowing Caterpillar to access different customer segments. Small contractors and owner operators were not Caterpillar's usual customers before 1985 and our dealers needed to transform their business to get closer to this customer base."

The backhoe was also the first product made by Cat's Building Construction Products division, which now features seven product families, including skid steers, mini excavators and telehandlers.

The 250000th unit, a 420E IT model, was sold to CF Jordan, a large construction business in El Paso, Texas, by Wagner Equipment, Cat's dealer in Colorado, New Mexico and West Texas.

Meanwhile, Caterpillar has announced a £50 million investment in the Leicester assembly facility and the fabrications facility in Stockton-on-Tees, both in the UK. The funds will be used to boost manufacturing capacity and for the development of new products.

Robert Droogleever, general manager of Caterpillar's global backhoe loader business, said; "Our UK workforce have demonstrated that they have the capability to design and assemble world-class products in Desford [Leicester] and Stockton to the benefit of the regional economies in which we operate". Around 90% of the products made in Leicester are exported.

BACKHOE HIGHLIGHTS

• Indian company Ashok Leyland and John Deere launched their first joint venture product, the 435 Backhoe Loader, in November last year and showed it at the Excon show in Bangalore the following month, where this photo was taken. The 435 uses an Ashok Leyland engine and ZF transmission and will be sold in India under the Leyland Deere brand. It is being made at Leyland Deere's new facility at Gummidipoondi, 50 km from Chennai.
• New Holland says its new B100B and B110BTC backhoes - with 97 hp and 110 hp engines, respectively - have 20% larger front buckets and 10% lower fuel consumption than the previous models.