25 March 2008
Worldwide sales of wheeled and tracked excavators totalled 137193 machines in 2006. And this year's sales look like topping the 138600-plus mark, according to David Philips, managing director of construction equipment market research specialist Off-Highway Research.
With the company putting total global construction equipment sales (China, Europe, North America and Japan) for 2006 at 664525 units, the excavator sector represented about 21% of the market last year. iC estimates the global construction market was worth US$ 5 trillion in 2006, and with equipment costs usually representing 5% of a project's total cost, the excavator sector was worth about US$ 20 billion in 2006.
According to Paul Burger, head of international sales, Hitachi Europe, demand for new machines in the last 12 months has been “overwhelming” with demand particularly high in the Middle East, especially Dubai.
Mr Burger told iC Hitachi has also seen unprecedented levels of demand from Africa's mining industry, while the Russian market is “booming”. In fact, so strong is demand in the country that Hitachi expects to deliver double the 1600 units it supplied in 2006.
Bart Decroos, Volvo's vice president of marketing - excavators, toldiC he saw “exciting opportunities” in Russia. While theCMiddle East and Asia-India and China in particular—should see “further growth” this year.
off-Highway's Mr Philips said sales in China totalled 34232 excavators in 2006, up a staggering +44% on 2005. The majority of these machines, perhaps unsurprisingly given the country's huge push to build new roads, railways and dams, being tracked. In fact, just over 500-wheeled machines were sold in the country last year.
But it is not just China where demand has jumped in recent months. Volvo's Mr Decroos toldiC the global excavator market had been “very active” in the last 12 months with demand “up almost everywhere”.
He estimated over 150000 units were sold worldwide in 2006, with Volvo claiming a 9% share. Demand, said Mr Decroos, had risen steadily from the late 1990s when he estimated the market at 70000 to 80000 units per year.
Mr Decroos said sales in all regions were now “at their highest levels ever”, with only the North American market showing signs of fatigue due to over supply.
“There are lots of new machines in the [US] market place at present. It's grown from 15000 units to 28000 per year very quickly, with rental companies and contractors buying many new machines in the last three or four years. This accelerated replacement of machines, rather than people buying what they need when they need them, means the current residential construction slowdown could lead to a general slowdown in sales of all new construction equipment”, said Mr Decroos.
off-Highway's Mr Philips said he expects to see sales in North America fall to a combined total of just under 29000 units in 2006, down on 2005's figures of 31540 tracked and 815 wheeled machines respectively.
However, Hitachi's Mr Burger sees some benefits of the recent slump. “To be honest the recent slowing of the US market is giving us some breathing space, which means we now have a chance to supply the high demand we are seeing in the other markets.”
Like other construction equipment manufacturers, excavator manufacturers have been afiected by the introduction of new engine emission laws for off-highway vehicles. New Tier 3/Stage IIIA emissions laws for 130 to 560 kW engines came into force on 1 January 2006. And this was followed by Tier 3 engine emission laws for engines from 75 to 130 kW and 19 to 37 kW on 1 January this year.
Tier 4/Stage IIIB legislation for various powerbands comes into force between 2011 and 2014, but many manufacturers are already looking beyond those dates. Hitachi's Mr Burger told iC the company is already selling battery driven mini excavators in Japan and expects to start selling larger hybrid-diesel/electrical -excavators by the end of the decade.
“Environmental concerns are easily one of the most important drivers for future machine development,” said Mr Burger. “Noise, dust, whole body vibration and emission laws are becoming more stringent. We are even looking at solar powered excavators, although I think their introduction is a very long way off yet.”
Volvo showed a hybrid engine at last year's Cat has added to its new D Series excavators with the 319D L, 319D LN and 321D LCR, all of which feature its Tier 3 compliant Acert engines.
Intermat Show in Paris and is also looking at machines that store the energy generated by certain movements during the working cycle and reusing it.
Like Hitachi, Volvo also expects noise and vibration legislation to have a big impact on future designs. “We've given a lot of attention to our Care Cab, which is designed to reduce the noise an operator hears during operation, while providing as smooth a ride as possible. So far the feedback has been extremely encouraging,” said Mr Decroos.
Volvo launched its new C-series excavators, the wheeled 14 to 16 tonne EW140C, 16 to 18 tonne EW160C and 18 to 20 tonne EW180C, and 16.7 to 19.1 tonne EC160C, 18.3 to19.2 tonne EC180C and 21.7 to 23.4 tonne EC210C crawlers at last month's Bauma exhibition, and all six models, besides featuring Tier 3 compliant engines, with load sensing hydraulics, came with its ‘Care Cab’ as standard.
Besides an adjustable suspension seat, the cabs feature increased glass areas, more room, a 14 vent climate control system and a new console. All the daily service points are accessible from ground level, and there is increased parts commonality to other Volvo models, which should make it easier to get spares.
Of course Volvo wasn't the only company launching new machines at Bauma. Hitachi showed four new wheeled excavators-from 14 to 22 tonnes-plus two crawlers-from 18 to 22 tonnes. All are fitted with Tier 3 Isuzu engines and feature its HIOS III hydraulic system for greater boom and stick productivity. The cabs feature fully adjustable heated seats, short-stroke joysticks for ease of operation, and an LCD display which, as well as being part of the control system, can show pictures from the rear-view camera.
Elsewhere, Caterpillar unveiled five new D-series wheeled excavators from 13 to 22 tonnes, while Komatsu showed the 110 tonne, PC1250-8 and 200 tonne PC2000-8, alongside its wheeled PW140-7. It has a short overhang counterweight and tight turning circle. Komatsu's ‘HydraMind’ hydraulic system gives it the best lifting capacity in its class, according to the company.
There were also new machines from Case, Doosan, Hyundai, JCB, Liebherr, New Holland and Terex (for a full report on all these machines seeiC's Bauma Show Guide, March 2007).
What is common to almost all the new machines is the high level of comfort ofiered to the operators-air suspension seats, climate control, larger windows and interiors-and ease of operation-improved hydraulics, multifunctional joysticks. This has been backed by longer service intervals and easily accessible maintenance points.
Much of this is due to European legislation that will limit the amount of vibration operators can be exposed to (see box story), alongside new laws on emission levels and rules governing an operator's field of view.
Hyundai, JCB, Liebherr, New Holland and Terex (for a full report on all these machines see Cs Bauma Show Guide, March 2007). What is common to almost all the new machines is the high level of comfort o. ered to the operators-air suspension seats, climate control, larger windows and interiors-and ease of operation improved hydraulics, multifunctional joysticks. This has been backed by longer service intervals and easily accessible maintenance points.
Much of this is due to European legislation that will limit the amount of vibration operators can be exposed to (see box story), alongside new laws on emission levels and rules governing an operator*#039;s. eld of view.
Maintenance and serviceability
“While increasing service intervals, grouping service points and making routine maintenance as simple as possible are important, it is the shortage of good mechanics and operators that could prove the main problem in the future,” said Mr Decroos.
A point echoed by Hitachi's Mr Burger. “Labour is difficult for many of our customers, particularly fitters and, more importantly, operators. We see the results of this in the state of the machines when they come back to the dealers.
“In developing markets operators are not used to the same level of sophistication as a European operator so machines are taking a beating at the hands of unskilled or semi-skilled operators, which means you don't get the levels of productivity you should.
“We are devoting a lot of time therefore to training operators. We have an in-house facility in Holland, but it's not the same as the conditions you'd find on a job site in Dubai for example, so it is becoming more and more important to send qualified operators to the job site and perform training in situ,” said Mr Burger.
Small wonder there is growth in GPS tracking and machine control. While Mr Burger maintains Hitachi does not supply excavators with machine guidance factory fitted-preferring to leave this to its dealers because of the “wide variety in local demand”-others in the sector do.
While Caterpillar has teamed up with Trimble, and Komatsu works with Topcon (see box story) Volvo's Series excavators can be supplied with its Care Track system, which not only monitors the machine's position but can also control the machine.
“There are other benefits to the customer too,” said Mr Decroos. We can include a geographical or time lock so that the machine can only be used during a speci. c time frame or location. standard to all its customers, believing the ability to monitor machine performance, carry out diagnostic checks and prevent theft in remote locations will bring “immense” benefits, said Mr Decroos.
Like hauler manufacturers, excavator manufacturers have been hit by the recent shortage of large size tyres. Mr Burger describes the situation over the last 18 months as “exasperating”. He told iC that there have been “tremendous shortages” that have been “extremely difficult” to overcome. He also describes the attitude of some of the major tyre manufacturers as “arrogant”.
While some of the manufacturers have held off raising their prices as long as possible, said Mr Burger, others raised their prices as soon as rubber was in short supply, even though they held a certain amount of stock. What this means is that the price of what he terms “B” tyres, has risen dramatically.
“Where tyres from spurious suppliers in China and Russia were once 30% cheaper from Michelin or Bridges are now 10 to 15% cheaper. But if a client chooses one of these it':s false economy,” said Mr Burger.it's half the life time, for in effect double the cost, which means we're now seeing a huge market in young, good condition second hand tyres, which can be worth more than new factory tyres.”
Hitachi has been sending machines out to its dealers with low quality tyres fitted for transportation purposes. These are then returned to the company, while the dealer sources the type of tyre the customer wants.
With global sales of excavators expected to rise in the next 12 months, manufacturers may struggle to meet demand. Hitachi's Mr Burger told icthat even wiht the company increasing its production budger by +35% in 2006 to 2007 (the company files its accounts in April) he expects supply will still be short of demand. The company expects to fill about of 85% of its dealer demands, despite investing €20 million (us$27 million) on expanding its European operation and ramping up production in Japan.
However, according to Volvo' Mr Decroos ease of operation, serviceability and mintenance, coupled to greater fuel economy look like playing ever greater roles in future machine development. There will also be an inrease in the levels of automation, although the operator-less machine is still “some way off yet,” said Mr Decroos.