Flexible friends

18 March 2008

volvos 56 kw,6 tonne l35b features a hydraulic quickcoupler that is suitavle for wide variety of att

volvos 56 kw,6 tonne l35b features a hydraulic quickcoupler that is suitavle for wide variety of attachments.

With sales of 187353 machines in 2006, there is no doubtthe European construction equipment market is buoyant at present. David Philips, managing director of Off-Highway Research (OHR), told CF that in 2006 almost all product sectors "enjoyed double digit growth [and] compact equipment fared well."

Indeed, combining sales figures for skid steer and compact wheeled loaders in 2006, gives a figure of 22958, or just over 12% of the total. Sales of compact wheeled loaders in particular enjoyed a huge boost last year, according to OHR, reaching 9925 machines thanks largely to the sustained recovery in Germany, where sales pushed ahead "strongly" to 5900 units.

French rental companies meanwhile, continued to invest in renewing their fleets. As a result, said Mr Philips, the market rose by +21%.

According to Volvo's European product manager compact equipment, Stefan Bach, Germany and France combined represented about 70% of the European compact loader market in the last two years.

Mr Philips expects Germany to show signs of further growth in 2007, which he predicts will push total European demand beyond 10000 compact wheeled loaders. After that, he told CF, will come "a very modest decline" to about 8500 units a year.

There was also positive news for manufacturers of skid steer loaders, which, said Mr Philips, contrary to most expectations, increased by "a healthy" +12% in 2006 to 13033 units. Demand, however, he added, was really only sustained by three countries: Italy (36% of the total European demand), Spain (25%) and France (12%).

"All saw demand rise to varying degrees, whilst even less enthusiastic markets such as Germany and the UK also experienced growth," said Mr Philips, adding that future sales are "unlikely to exceed the level attained in 2006 and will doubtless decline slightly to around 10750 units by 2011."

John Burton, Europe, Middle East & Africa business director for Bobcat loaders and utility vehicles told CF, "The market overall in Europe is buoyant today, and has been for the last year, with almost all markets showing good growth. Market conditions range from positive to very positive, by and large."

Market Differences

However, while sales of skid steer and compact wheeled loaders are growing in Western Europe, the story is not the same in the East of the region, according to Mr Bach.

"In Eastern Europe, which has many more start-up and smaller owner operator companies, the backhoe loader is popular because it's two machines in one. While it's their best choice it is a bit of a compromise. It's in the more mature markets that contractors tend to have a mini excavator and a compact loader," said Mr Bach.

Mr Bach said he believed growth in Eastern European is just starting. "There's enormous growth potential sure, but I think it will happen in 10 to 15 years. From now until then [contractors] will be using mainly backhoe loaders, but as the market matures there will be a move towards compact loaders and excavators. At this point the market should really take off," he added.

Bobcat's Mr Burton, offered a slightly different take on the skid steer loader market outside Western Europe. "I think it is fair to say the less mature markets are currently showing the greatest growth in terms of percentage and we expect that trend to continue for the short to medium term," he said.

One of the main reasons for the growth in sales in Western Europe, explained Mr Philips, is the increasing popularity of the compact loader as a rental product. Indeed, Volvo's Mr Bach said rental is now one of the "biggest channels" to market for the company's compact loaders.

Mr Philips told CF manufacturers are stocking up their own rental fleets, as well as selling to specialist rental companies. This growth, he said, continues to account for a significant proportion of the increased demand during the last two years in particular.

Elsewhere, low inflation and, until recently, stable interest rates also played a part in the sector's growth. This, explained Mr Philips, makes borrowing a very attractive way of financing the purchase of new equipment and in turn boosts business confidence. Infrastructure construction is also healthy."With government investment strong business confidence remains high [so] purchasing new equipment seems to be a relatively low risk exercise, given the current macroeconomic climate and low cost of borrowing," he added.

Flexible Operation

Mr Bach added that innovations in operator comfort and serviceability are also driving sales and product development. The growth in the number of attachments available to both skid steer and compact wheeled loader users is also increasing.

And with the role of operators in choosing what machine to buy also growing, according to Mr Bach, it's no surprise to find the levels of comfort enjoyed by operators of larger machines - air conditioning, suspension seats, larger glass areas, joystick controls etc - now standard on many compact wheeled loaders.

A point echoed by Bobcat's Mr Burton. "We are experiencing a trend for more 'home comforts' in our machines, features such as Selectable Joystick Controls, are steadily growing in popularity. Personally I believe that this is simply a matter of demographics as the 'Playstation Generation' matures and enters the industry, advances in technology are not only welcomed but often expected."

As for easy serviceability, Mr Burton told CF, "It has always been and always will be a necessary pre-requisite. From a design perspective this is always paramount for us and the increases in technology are reflected in today's products, which have computer controlled functionalities, self diagnosis codes etc. as standard."

Mr Bach boils this down even further. "With serviceability you count time, and, of course, time is money," he explained.

Tool Carrier

Likewise, the compact wheeled loader's reputation as a tool carrier, said Mr Bach, was also helping drive sales. "Like their larger cousins compact wheeled loaders have always been tool carriers, Volvo offers about 40 to 50 attachments, for example, and this is because the operator is jumping up and down all day doing something here with a bucket, then changing to pallet forks, for example," he explained.

"The benefits to contractors are numerous, but the most obvious are increased flexibility, productivity and lower costs leading to increased profitability," he added.

Mr Bach told CFthis flexibility of operation is one of the key reasons buyers choose a compact loader over other equipment, like a skid steer loader. A point Bobcat's Mr Burton takes issue with.

"I would dispute the articulated loaders multi-functionality aspect in terms of their tool carrying abilities, which by comparison is limited against a skid steer loader.

"certain markets, Germany being the prime example, have matured into articulated loader markets over the years and this has been at the expense in some cases of skid steer loaders. [But] in terms of functionality and versatility there is no contest, in practical terms the skid steer loader wins over the articulated loader every time," he added.

While this is a moot point Mr Bach believes choosing a compact loader also offers other benefits. "There is a question of quality; after two or three years I think you can basically throw away a skid steer loader. There are also differences in operator comfort and serviceability; skid steer loaders can't really compete because they are so small.

"Compact loaders are better performs too, while the resale value of a compact loader is much higher than that of a skid steer loader."

In terms of resale values Mr Burton is adamant this is not true. "Typically for a three year unit in similar condition a skid steer loader would realise between 15 to 25% more than a loader as a percentage of the original purchase price."

As proof of this Mr Burton told CFthe company is currently "experiencing unprecedented demand" for used skid steer loaders via its remarketing group. However, Mr Bach told CFthat comfort and serviceability will become ever more important in the future, especially as this is what the customer is asking for.

"Firstly the focus on comfort and serviceability will remain. This is especially important in the emerging markets of Europe were small companies will do their own servicing, so it needs to be simple," he said.

For bigger customers, such as large contractors and rental companies, serviceability is also a key driver, although the focus, said Mr Bach, will be on preventative maintenance and servicing before the machine needs replacement parts.

"For dealers it's also about service, but focusing on preventative maintenance. Service contracts that build service into the machine's working life, which means helping the customer get more for his money - higher productivity, longer service life - that will be the key," he said.


According to Off-Highway's Mr Philips, the long-term outlook for sales of compact and skid steer loaders is "very good".

With contractors looking to increase productivity longer service intervals, easy maintenance and greater operator comfort are also high on manufacturers' product development agenda. As Mr Burton told CF, Bobcat's 'Voice of the Customer' research "indicates strongly that increased performance in terms of ROC (Rated Operator Capacity), lifting capability etc. is still very high on the customer wish list, followed by operator comfort and easier and less frequent service intervals."

Growth in sales is also sure to come outside the mature markets of Western Europe, with the emerging economies of Eastern Europe the focus of that growth in the foreseeable future.


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Andy Brown Editor, Editorial, UK - Wadhurst Tel: +44 (0) 1892 786224 E-mail: [email protected]
Neil Gerrard Senior Editor, Editorial, UK - Wadhurst Tel: +44 (0) 7355 092 771 E-mail: [email protected]
Catrin Jones Deputy Editor, Editorial, UK – Wadhurst Tel: +44 (0) 791 2298 133 E-mail: [email protected]
Eleanor Shefford Brand Manager Tel: +44 (0) 1892 786 236 E-mail: [email protected]