Buying Criteria - Indian Construction Equipment’s Owners

The backhoe is the machine that launched a thousand earthmoving companies. But running a company profitably is an entirely different ball game. If you are an owner or operator, you need to know exactly how much a backhoe is costing you per hour. Devoid of this information, backhoe rental is not charged aptly leading to losses for the owner. Precise number crunching is a must if companies want their investments to pay off profitably.

To get an accurate picture of the owning and operating costs of present day backhoe loaders, one needs to clearly understand the applications and the cost per hour of operation in each of the applications. For example, applications that involve major loader functions usage will incur a higher cost as compared to most backhoe applications.

While buying a backhoe loader, it is very important to have a detailed analysis of the owning and operating costs. The costs are generally available with all equipment manufacturers for their products at least, in different applications. The best way to compare is to check the Operating costs for each of the equipments in the same set of operating conditions/applications available and then make a calculated decision based on the numbers and not merely on the features or popularity of the product.

A product might have a very good “Brand Name” but if the rental costs in your area are low then “your rental” must be lower to get orders. Having an equipment from an established brand with higher hourly operating costs will neither guarantee you more business nor the required profits. A popular product with higher operating costs more often than not will result in losses.

For Backhoe Loaders operating in India around 60-65% of the operating expenses are the fuel costs. The average usage of these equipments being around 8-10 Hours per day, even a small saving in Fuel consumption will have a major impact on the bottom line.

For example if the Fuel Efficiency of your BHL is 4.5 liters/hour and of the other manufacturers offer a consumption of 5 liters/hour, you save 10% of Fuel every day.

Now considering the fact that 60% of your expenses are fuel costs that amount to a 6% less operating cost per month or 1.5 days of free work for a 25 days a month operation.

But most people do not consider this of prime importance. Even those who do consider this number crunching, are very few in number.

Indian customers off late have become increasingly sensitive to the costs, but a reasonable “social pressure” currently present in the market, successfully supersedes logic. The fear of venturing out is what leaves buyers susceptible to being taken for a ride. All thanks to the rigid Indian mindset that “Good things sell more”.

As the popular saying goes “Nothing ventured, nothing gained”. A classic example of this in the Indian CE context is the Mahindra EarthMaster BHL. With an ARAI verified Fuel Consumption that is probably at least 10% better than the industry, yet equipment owners give in to other brands. Mahindra being such a giant we do not see any reason why the Quality or Service would not be taken care of. With a product loaded with features, competitive in price yet relatively high apprehension amongst owners, and that too for no logical reason.

The trend however is changing with newer players gaining market shares, but the customers really need to understand that they need to support the “Best product” and not the “Best Brand”. Only when the manufacturers understand that the market will only accept the best product, will they get their engineers to actually work for building products that make money for the customers, thereby increasing customer profits.