Our all-new AX 124 BS IV Backhoe Loader offers up to `10 lakh savings as compared to competing brands over a period of 4-year retail finance loan.
The wheeled equipment segment has been impacted by three happenings: First, the second wave of the pandemic; Second, the upgradation requirement to BS IV emission norms; and Third, the sharp increase in commodity prices, especially steel – all of which have affected customer sentiments; hence the delay in making a buying decision.
To bring another value-for-money product to our customers, we have developed an all-new AX 124 BS IV compliant Backhoe Loader. It is equipped with improved hydraulic pumps and advanced structured loader arms with higher breakout force while dozing or loading materials, ensuring 10-15% higher productivity.
It is fitted with the globally renowned transmission from Carraro and hydraulic pumps from reputed brands, and is available in two-wheel and four-wheel drive options. The product meets all the criteria that a customer looks for in a profitable investment.
The narrowing prices between excavators and backhoes have intensified competition between the two machines, and there may be a marginal shift to excavators in certain application fields and in lower tonnage categories. But the backhoe will continue to hold its position since it is the most versatile construction equipment in the market.
The Backhoe Loader has always been a rental market product and there will be some pressure on its rental rates to offset the price increase. Our all-new AX 124 BS IV Backhoe Loader offers up to 10 lakh savings as compared to competing brands over a period of 4-year retail finance loan. A 100% Swadeshi product with the key value proposition of “Sahi Daam Zyada Kaam” meets all the criteria a customer wants for a profitable investment.
Due to the higher cost, the transition to BS IV is creating a negative impact, but people will gradually accept the new technology and begin to appreciate the long-term benefits.
The two major advantages of using BS IV engines are reduced pollutants emitted from the equipment exhaust and increased engine efficiency. Plus, the electronic management system and common rail FIP used in these engines, makes their maintenance at site easier, and any fault can be inspected digitally.
At ACE, we have conducted social media campaigns and road shows, and have also circulated promotional material to raise awareness of BS IV engines and their higher efficiency benefits. These are early days and the high cost of equipment is giving the transition a negative impact, but we are confident that gradually people will accept the change and appreciate the long-term benefits of the new machines.
Unfortunately, the BS IV transition has coincided with the huge surge in commodity prices, especially steel. Most of manufacturers could not pass on the impact fully on to the customers, which leaves them with very little scope to float any promotional schemes for their BS IV compliant machines.
We expect a 20-25% increase in demand of BS IV compliant equipment this FY.
Implementation of BS IV emission norms is no doubt posing certain challenges. We are using BS IV engines in our next-gen multi-activity, higher capacity cranes and other construction equipment that are used widely at project sites. Since these are basic equipment that are required at any site, we don’t see much impact of price on demand; but there is definitely a reluctance to buy these new machines now. Customers are, in fact, exploring the option of used or rental machines; but these are early days.
The first two months (after the rollout of BS IV machines) were marked by lockdowns, and the actual demand was seen only in the month of June, which was promising. We envisage a 20-25% increase in demand of these equipment this financial year, and we also expect their rental rates to go up by at least 10-15% in the next 2-3 months; this will help mitigate the increase in price of these machines. We expect a 20-25% increase in demand of BS1V compliant equipment this FY.