Backhoe Loaders Market Analysis By Manufacturers Caterpillar, Deere & Company, Komatsu, Mahindra Construction Equipment, Volvo Construction Equipment

Market Overview

A backhoe loader also referred to as digger is a heavy digging equipment vehicle that is comprised of shovel/bucket on the front and a backhoe on the back. The backhoe loader is relatively small in size and is extensively used in urban engineering or small construction projects. The core structure of backhoe loader is the tractor where it is designed to move effortlessly on all kinds of terrains. It is equipped with powerful, turbocharged engine, rugged tires, and a basic cabin for controlling its functions. The backhoe is mainly used for digging up to hard compact material, usually earth or to lift heavy loads. The arrangement of a backhoe is similar to the human arm including the boom, bucket, and stick.

The global backhoe loader market was valued at US$ 2,518.3 Mn in 2018 and is expected to grow at a CAGR of 5.9% during the forecasted period (2019-2027)

Market Dynamics- Drivers
Growing demand for construction of residential, commercial infrastructure, owing to rising urbanization is expected to drive growth of the global backhoe loaders market during the forecast period

Growing urbanization has increased the demand for construction commercial and residential infrastructure. Moreover, the global construction industry has witnessed significant demand in the recent past, owing to increasing population. For instance, according to Coherent Market Insights’ analysis, around US$ 750 billion to US$ 850 billion of investment is made in infrastructure every year with over 70% of the investment going into emerging economies. Furthermore, according to the American Society of Civil Engineers projected that around US$ 3.6 trillion would be needed for the U.S. infrastructure investment by 2020. Thus, growing investment in infrastructure projects is expected to drive the global backhoe loaders market growth over the forecast period.

Emergence of public-private partnership for various construction projects is expected to propel the global backhoe loaders market growth over the forecast period

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Various emerging economies are focused on public-private partnership for the development of infrastructure projects in the country. For instance, in India, the Niti Aayog aims to achieve 47% of total infrastructure development through private funding. India is a lucrative country for key manufacturers with over 750 public-private partnership projects at work. Moreover, governments of various developed countries are endorsing public-private partnership models, in order to achieve certain investment targets.

Asia Pacific excluding Japan (APEJ) region dominated the global backhoe loader market in 2018, accounting for 40.8% share in terms of value, followed by North America and Latin America, respectively

Market Restraints

Availability of substitute equipment vehicle, especially in Japan and China is expected to restrain growth of the global backhoe loaders market over the forecast period
There is significantly low adoption of backhoe loaders in China and Japan due to domestic manufacturers preferring hydraulic excavators or mini-excavator over backhoe loaders. This, in turn, is expected to hinder the demand for backhoe loaders and thereby restrain the market growth in the near future.

Availability competitive products are expected to hamper the global backhoe loaders market growth in the near future
Average price of a backhoe loader is similar to that of a high capacity mini excavator or a high powered (220 horsepower) wheeled loader. Moreover, high sales of these competitive products have hampered the demand for backhoe loaders in the recent past. Mini excavators or compact wheel loaders perform many jobs that a backhoe loader does. Thus, availability of such competitive products is expected to hinder the market growth.

Market Opportunities

Growing demand for renting equipment is expected to pose lucrative growth opportunities
Backhoe loaders, although they are in demand, are extremely expensive to purchase. Thus, small- and mid-sized companies preferring renting or leasing the backhoe loader. The backhoe loader renting and leasing business is expanding significantly, owing to high demand for backhoe loaders from the U.S., India, etc. Moreover, high rate of urbanization in APEJ region is expected to offer excellent opportunities for market players in the near future.

After-sales services are expected to offer significant growth opportunities for market players
The average revenue of aftersales services is around 5-10% of the total global revenue. This revenue share is relatively low in emerging economies such as India. Moreover, dealers are providing lucrative offers with improved maintenance contracts and better execution. Although after-sales revenue is low, it is recurring and can increase sales of spare parts.

Segment Information

In global backhoe loader market, by model type segment, Sideshift sub-segment dominated the global backhoe loader market in 2018, accounting for 86.4% share in terms of value, followed by center mount sub-segment.

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