Wheel Loaders market to grow in 2014-15 in India

Wheel Loaders Manufacturers Brace for Better Application Orientation

Liugong

Possibilities are emerging that the wheel loaders market in India is likely to have some modest expansions in 2014-15. However, the burgeoning competition will not remain discounted, P. P Basistha takes a look.

Manufacturers and distributors of wheel loaders in India do not seem to get convinced that projected demand of new loaders by coal mining companies, power utilities; quarry owners even the port operators will to a certain extent curtail competition. On the contrary, perception is rife that market size will continue to remain under pressure. This is because fresh offtake will materialize only after the idle units get fully deployed. The conviction is not fully without substance.

While certain recent developments like big ticket expansion by Steel Authority of India Ltd to expand its existing production capacity (the PSU behemoth has recently commissioned its new blast furnace in its Eastern India facility, thereby requiring enhanced movement of iron ore) and newer planned expansion from recently allocated Chiria mines in Central India, newer road projects in North Eastern part of the country, required to be built through blasting-drilling and crushing, spot processing growing volumes of imported coal or major recent proposed expansion by Coal India of Raigad mine holding colossal reserves, holds promise for wheel loader manufacturers.

Continued emphasis on incremental coal loading by the railways also affects business prospects. However, wheel loaders makers are not too sure what will be the actual demand created from the newer developments. Demand balancing is expected to take some time as the market will continue to be serviced with large number of existing units.

While enquiries by NBM&CW to primary and secondary steel producers on whether there will be maintenance and operation contract renewal to run their existing units with present wheel loader manufacturers and distributors, or the new solution providers will be brought in to evoke highly mixed response, same as with road and hydro power project developers on requirement of newer plants for hauling aggregates. Nonetheless, firm existing demand fundamentals, recent spate of project clearance by the government, indications of expanded output by the industrial sector are expected to create pull of new equipment.

Future projected offtake from various demand pockets has made the industry assessed demand of 1700 units in 2014 up from 1400 units in 2013 but down from 1600 units in 2012. However, they contend that the task will be critically challenging to cater the requirements of the business avenues as numerous factors will have to be confronted to promote sales. Market was at its highest level of 2400 units in 2010.

Vijay Sharma
"The key challenge at present is to make the wheel loaders available at an affordable prices, yet incorporating technology improvements, in face of rising production costs, so as to make the products attuned to Indian operations," says Mr. Vijay Sharma, Terex. Terex has started manufacturing its 3 and 5 tons wheel loaders with 1.5 and 3.5 cum bucket capacity at its plant at Gautam Budhnagar, near Delhi wherein the company has a target to produce 250 units of loaders during 2014.

According to him, "We've plan to increase production depending on the market demand. In order to make the products attuned to the Indian requirements, we have carried out some necessary changes in design by making the fabrication stronger, so as to make it rugged. For better serviceability, the loaders are being equipped with fuel efficient 120-170 hp, Indian Cummins Engine. We are working together with Cummins to educate the potential customers for using the appropriate fuel, so as to expand maintenance schedule."

Terex
Terex is planning to build critical mass of its loaders banking on its 55 dealers and 150 outlets. The company is giving emphasis to localization of its loaders. Sixty percent of the components fitted in Terex's wheel loaders including transmission systems and engines are of local origin.

It is quite essential to make the wheel loaders suitable, yet affordable for Indian applications, particularly taking into account higher usage in port sector among other usages. Ports are leasing out cargo handling operations to private stevedores. According to the leasing contracts, the stevedores will have to deliver the required cargo throughput on per ton basis stipulated by the ports. With any shortfall, the stevedores are liable for stiff penalties from the port authorities. To avoid the same, the wheel loaders, deployed for cargo handling would have to be made work strenuously for delivering high cycle times. This is visible from usage of the wheel loaders at the eastern Indian ports handling colossal volumes of coal and other bulk mineral cargoes. One of the logistics service providers to the port of Paradip has made a major acquisition of good number of units recently from a Chinese manufacturer. Major acquisitions have also been reported at Krishnapatnam Port in Southern India private port from a European manufacturer.

Rohit Punjabi
Mr. Rohit Punjabi, Liugong India says, "The wheel loaders manufactured in India have been made suitable for versatile applications. Being entirely loading equipment, our wheel loaders are structured to undertake various loading applications be it for the port stevedoring industry to remove and load iron ore or other bulk cargo, the construction industry for loading aggregates, mining for moving overburden or aggregates. However, the bigger utility of the machine comes through its rapid mobility, hauling and high loading and unloading output."

Terex
Attainment of critical mass by making products available at affordable prices along with delivering high uptime is being emphasized by Liugong India. The Chinese company currently produces 250 units of wheel loaders at its newly commissioned Pithampur plant. According to Mr. Punjabi, "Currently, the products manufactured at Pithampur plant undergo 30% localization; other components for wheel loaders are imported from China and the US. However, we target to achieve around 70-80% localization in future." Liugong currently manufactures its 3-5 tons wheel loaders in India."

He adds, "We have in place proven wheel loader CLG 856 BS-III with 5 ton payload capacity powered by US Cummins engine. The loader is used in various applications besides coal and iron ore handling with a standard bucket size of 3.0 cum with optional bucket size of 1.8 – 7.0 cum & with a gross power of 220 hp at 2,200 rpm. To make the wheel loaders suitable to Indian requirements, we have recently rolled out from Pithampur CLG 836BSIII wheel loaders with payload capacity of 3 ton.

The market presence will also be looked into by Liugong by promoting loaders for specialised applications. Mr. Punjabi says, "Our CLG 842 with 4 ton payload capacity and CLG 888 with 8 ton payload capacity is for specialized applications. The loaders are suitable for coal, stone aggregates, fertilizer and timber handling applications." The special application wheel loaders are imported from LiuGong's plant in China.

Liugong

Liugong India is looking for future sales banking on its advanced technical attributes. According to the company, the machines fitted with fuel-efficient high horse power Cummins Engines allowing it to operate in adverse conditions and high altitudes with 20% higher productivity than available range. The wheel loaders are fitted with Liugong / ZF transmission and axles, Premco hydraulics etc. Other features include standard ROPS / FOPS cabin, safety struts, audio visual alarm, adjustable steering wheel, electronic surveillance system, centralized automatic lubricating system, automatic bucket return to dig, automatic boom height kick control for higher cycle times, claims the company.

Liugong India is banking on its dealership network for existing business retention and also sales expansion. Mr. Punjabi says, "Our 15 dealers operating across India ensure that our machines should reach our customers in any part of the country on time. The dealers are our biggest assets for business promotion. As part of our expansion strategy, the number of outlets will continue to expand in order to make our availability 24x7 for our customers." The company has a population of over 1800 loaders working in India with corporate and retail users.

Amit Gossain
Economies of scale and cost competitiveness will continue to be monetized by JCB India through its Pune Heavy Line facility manufacturing wheel loaders for the local markets. JCB India offers 3 Wheel loader models (two variants of 430 ZX, 432 ZX). The two models of 430ZX are 3.3 tonne payload and the 432ZX is for 3.6 tonne payload. Out of the two 3.3 payload variants of 430 ZX; one comes with JCB common rail BSIII complaint 130 hp engine. Mr. Amit Gossain, Executive Vice President – Marketing, Business Development and Corporate Affairs, JCB India says, "430ZX was designed to meet the specific needs of the customers. Our wheel loaders offer the best in class productivity and fuel efficiency." JCB wheel loaders are available with bucket capacities ranging from 1.5 to 3.1 cum. He claims, "Given the world class vendor base that JCB India has formed over the years, the localization level is consistently increasing enabling us to make our products cost competitive."

JCB
Mr. Gossain says, "JCB Wheel Loaders are used for specialized applications such as quarrying; mining (Iron Ore, Limestone, and Laterite etc.) aggregates re-handling, ready mix plants, coal re-handling, wagon/high bodied dumper loading etc. We have a large base of customers which comprises rental companies, contractors (small & major, corporate) and various industries where materials are re-handled."

According to Mr. Gossain, "The wheel loaders provide optimum return on investments. JCB wheel loaders are capable of continuous hours of uninterrupted and productive operation. Ergonomically placed operator controls ensure best in class operators' comfort. 432ZX comes with automatic boom lowdown which has been incorporated to enhance the machine productivity and keeping the long working hours in mind, we have introduced servo control to reduce the operator fatigue. JCB Wheel Loaders are fitted with multi plate oil immersed disc brakes that make the machine more effective in any kind of working conditions." JCB currently has a fleet of 4500 units working in India. The equipment are serviced by 59 dealers and over 575 outlets.

Capacity Shift & Business Orientation

Case 821F

Volume sales can only be expected by wheel loader manufacturers in India in the lower end, amidst the shrinking market only if supported by local manufacturing and front integration with adequate sales and service channels.

Anil Bhatia
Based on its strategy for being a total solutions provider in the near future in India, Case New Holland Construction Equipment India (CNH) is quite optimist on the potential of wheel loaders business in India. However, Mr. Anil Bhatia, Director Sales & Marketing CNH India contends, "We will refrain from introducing the 3 tons class loaders in India as it will not be commercially feasible for us to import the products. Instead, our emphasis will be to promote our 5 tons class wheel loaders."

Mr. Bhatia mentions, "We have promoted few of our 5 tons wheel loaders to some of our key customers in India for trial and the results have been encouraging. We expect spurt in wheel loader sales with expansion of highway projects and quarries."

According to him, CNH is well positioned to promote and support its wheel loaders in India with 53 dealers and 200 service outlets. The company will add 9 dealers more by March 2014.

New range of wheel loaders for the Indian market with 5 ton payload capacity will be launched by Caterpillar in later part of 2014. According to the company sources, "The new 950GC wheel loader combines low operating costs with the durability, reliability and economy of proven Caterpillar components to deliver productive performance."

Caterpillar
950GC is fitted with Cat Engine C7.1 delivering168 kW @ 2200 RPM. Net power is151 kW @ 2200 RPM. The wheel loader has a bucket size of 3.1 m3, dump clearance is @ 45° discharge 2930-3139 mm, B-Pin Height 4188 mm. Maximum Reach of the wheel loader is @ 45° discharge 1380 mm. Operating Weight of 950 GC is 18100 kg.

Company sources say, "The new Cat 950GC will be marketed for stockpiling, truck loading, material handling, hopper charging and load-and-carry work. The features of 950GC will be Cat Z-bar linkage, performance series buckets, load-sensing hydraulics standard, and air-conditioned cab with intuitive controls. The loaders will be powered by Cat 7.1 tier-3 engine with power rating of 168 kw (225 hp)."

Sources add, "The engine features a new fuel-injection system specifically designed for fuel available in emerging markets. An electronically controlled, hydraulically driven, variable-speed cooling fan reduces fuel consumption and sound levels, and an optional fan-drive-bypass feature will allow faster warm-up in cold weather."

Caterpillar India currently manufactures Cat® 988 H wheel loaders at its Thiruvallur facility near Chennai for quarry aggregate, industrial and mining applications. 988 H is powered by Cat® C18 engine of 397 kW (540 hp) with ACERT® Technology is U.S. EPA Tier 3 and EU Stage III compliant engine. Other features include, positive flow control hydraulic system, axle oil cooling system, fuel management system, auto idle kickdown , engine idle shutdown, impeller clutch torque converter , rimpull control system.

The new and existing range of wheel loaders will be supported by Cat's existing 8 territorial dealerships across India owned by GMMCO and Tractors India Limited having 175 plus dealer outlets. The dealers offer rent to purchase, trading of existing machines and short-term rentals services.

Manjunath

Doosan Infracore will lay preference towards selling bigger capacity loaders of 7 tons and above by continuing to import the loaders from Korea. According to Mr. Manjunath GM-Sales, Doosan Infracore India, "promoting the higher capacity loaders provides us a level playing field with other manufacturers promoting products of similar capacities. Fitted with Doosan and Cummins Engines, the loaders are versatile and are suitable for applications from coal loading to any other bulk commodity handling."

Doosan


According to Mr. Manjunath, "We will not be getting aggressive towards promoting our loaders on price basis, instead we will focus on quality sales and support through our 28 dealers." The company has a population of 50 wheel loaders working in India. Doosan Infracore has its plans for setting up a local manufacturing facility near Bangalore very shortly.




Pankaj Kumar
DOZCO markets the heavier capacity 20-80 ton Kawasaki wheel loaders for the Indian market with bucket capacity varying between 3-10.5 cum, under its exclusive distribution tie-up with the Japanese manufacturer- Kawasaki for the Indian market. DOZCO has bagged a fresh order of supplying 9 units of Kawasaki loaders to National Mineral Development Corporation (NMDC). According to Mr. Pankaj Kumar, Vice-President-Sales, "Although the smaller loaders constitute the mass segment, we will refrain from pushing the same as importing the equipment by shelling 26% custom duty added to high exchange rate of Japanese yen, will render the import unviable for us."

Kawasaki

Kawasaki has carried out recent technological modifications in its wheel loaders. The upgraded loaders are being promoted as 'ZV-2" series. Mr. Kumar informs, "Advancements have been carried out to make the loaders more user-friendly by extending maintenance intervals. The duration of lubrication of Propeller shaft's universal joint has been increased to 12,000 hours i.e a term can be used as "maintenance free". Oil drain out intervals of other moving parts has been extended from earlier 250 hours to 500 hours at present."

He adds, "Heavy full box frame for front and rear chassis of Kawasaki Loaders increases chassis life and resists twisting load. The Kawasaki loaders have an exclusive dual z-bar loader linkage which ensures powerful breakout force. In addition, it has also a 50-degree tilt back angle with powerful breakout force and tractive effort which simplifies loading and carrying without spillage. The auto transmission automatically selects optimum speed from second to fourth gear and vice versa to facilitate scooping and carrying.

DOZCO will promote its wheel loaders by targeting specialized applications as well like tunnel constructions, Block Handling, Hot Slag Handling through its side dump bucket, Block Handling attachments etc. DOZCO provides back support to the equipment through annual maintenance contracts on hourly basis where customers are charged according to the minimum equipment utilization.

Strong market orientation to promote the wheel loaders in the diverse Indian market is the business strategy of Volvo CE India. The European manufacturer is following a dual branding strategy through Volvo and its acquired SDLG brand to build up wheel loaders business in India.

According to Mr. B. Sridhar, Head-SDLG Business India, "SDLG will emphasize towards enhanced brand building to increase its market presence in India." SDLG officially launched its new wheel loaders and motor graders during Excon 2013.

SDLG

However, according to Mr. Shridhar, "The challenge towards increasing our share in competitive market will be to stabilize, develop, and justify our brand through appropriate product placement. We will do this by strengthening our after sales support, better parts support, and operators training both during warranty and post warranty period. The strategies are likely to increase the acceptance of our products."

Volvo has thirteen dealers out of which four are dedicated to distribute SDLG products. Parts support to the products is provided through Volvo CE's mother warehouse in Bangalore. SDLG currently has 500 units working in India.

He says, "Though the products are not intended for the premium but the value segment, whose emphasis is towards getting a reliable product, providing higher uptime, hence product support is vital for the company."

Mr. Sridhar mentions, "The reason for Volvo to acquire SDLG brand was to serve the growing mass market. To make the wheel loaders and motor graders well attuned to the Indian requirements, improvisation has been carried out in transmissions, axles to make the equipment deliver high on performance. Improvisation has been made for better operator's comfort."

The new SDLG 979, 23.5 ton is powered by SDLG, tier-3 electronic engines with rated power of 226kw. Bucket options for the wheel loaders vary from 3.5-6 cum with other attachments involving wood grappler, side drum, and fork. The wheel loaders can be used for applications like truck, wagon, hopper, wood and barge loading in various types of minerals. SDLG's wheel loaders are available between 7–25 tons.

Muralidharan
"Our target is the valued customers who need higher cycle times usage between 22–34 hours with 90% availability at mining or aggregate sites. Our loaders are capable of handling even with heavier loads to the tune of 35-40 tons of marble or granite through special attachments. Being imported from Sweden, Volvo's loaders provide total economical cost of operations, powered by fuel-efficient Volvo engines, delivering higher torque at lower rpm levels," says Mr. Muralidharan, President, Volvo CE India.

He expects that the volume of heavier segment wheel loaders to grow with increment of output in quarry and mines and also with renewed growth of the road construction sector.

Volvo CE has been promoting its wheel loaders to quarry owners and mining companies. However, it will explore appropriate business opportunities in rental sector. Volvo CE has supplied its wheel loaders to iron ore mines in Goa and coal fields in Central India. Though the company may have gained positive results in building its brand as Mr. Muralidharan claims that the Volvo CE wheel loaders have found encouraging demand without disclosing the figures, the challenge for the company remains high customs duty and fluctuations in dollar. However, he contends, "We will refrain from localizing the products; until now as the modest demand volumes do not make it commercially viable to take on local production." Volvo will plan to make business grow by targeting specialized applications involving irrigation and tunnel constructions with its side dump buckets and other bucket attachments.

Volvo
Volvo is planning to offer marketing and services support through its dealers across the country. Mr. Muralidharan informs, "We have been strengthening our distribution network periodically. Currently, we have 13 dealers spread across India to offer enhanced sales and support to customers. As the market grows, we will continue to invest in distribution and even our dealers will invest in terms of infrastructure and people. As part of customer support, our remanufactured program 'Reman' encourages users to keep their Volvo machines genuinely 'A Volvo'. It allows users of Volvo CE to have their used components renovated to the same condition as new with a warranty backup. However, the rider is Reman support is only available for components that have been used between 12,000-14,000 hours, but generally with wheel loaders components having being used in India between 20,000-24,000 hours, the components remain beyond to go through economic repairs."

While the manufacturers and the distributors of wheel loaders have plan to make product placement based on the emerging applications requirement, it will be pertinent to have better service orientation by making necessary investments aimed at strengthening marketing and product support channels.

NBMCW March 2014

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