Micro Markets
Tracking the Growth in the Compact Machine Industry
By Jason Morgan
 A lot of clichés get thrown around when talking about compact equipment like skid steers, compact excavators, compact track loaders (CTLs) and compact tool carriers (CTCs, aka mini skid steer). The “Swiss army knife of the construction site,” “size matters” and “bigger isn’t always better” top the list. At the end of the day, these machines are more than marketing one-liners. They’re the tool of choice for the contractor who needs to get work done. Now that some industry sectors are starting to show life, the sales of compact machines are looking up after more than a year and a half of declines.
“We’re starting to see a positive turn across the range, but rental is leading the charge,” says JCB General Manager of Product Marketing Chris Giorgianni. “From the contractors’ stand-point, they tend not to want to commit money to own machines these days, but they’re willing to rent. With compact machines, the acquisition costs tend to be lower than your typical mid- or full-sized iron, so naturally you’re going to see more growth there out of the gate.”
With their go-anywhere size, these machines often serve as mobile hydraulic power plants, powering attachments ranging from material moving buckets to hydraulic breakers. It’s no wonder that contractors looking to get the most productivity bang for their buck are turning to compact machinery.
According to JCB statistics, the overall machine industry was down 48.3 percent throughout 2008 and 2009. The compact side of that — equipment like skid steers and mini excavators — were down in the 40 percent range, but they were doing slightly better than the overall market.
In the first half of 2010, statistics are looking up. The overall market is up 4.1 percent and the compact side of that is outpacing that growth at 11.1 percent. From the compact excavator standpoint, 3- to 4-ton machines are doing the best, while 2,200- to 2,500-lb rated operating capacity skid steers are also holding their own. Yet, the most significant growth is found in CTLs, which are up an impressive 20 percent year-to-year.
“The compact track loader market has only been tracked through AEM for the past couple of years, but they’re growing in popularity because of their versatility,” says Giorgianni. “As the markets improve, customers’ attention is focused on maximizing their product. The track loader can work in many different conditions — muddy or soft ground where wheeled machines might get stuck — and you can slap on a myriad of attachments.”
JCB isn’t the only manufacturing company seeing growth sales. Nearly every manufacturer that responded to Utility
Contractor’s survey reported improved numbers — Ditch Witch, Vermeer, Kubota and Wacker Neuson agree (John Deere, Bobcat, Caterpillar and Hitachi declined to comment about machine sales statistics).
 |
| Despite the economic downturn, many manufacturers invested in new product development and over the past year, manufacturers have released new equipment – like this Bobcat E50 compact excavator. |
|
“When you look at the first half of 2010, we’ve been pleasantly surprised. Business has been good; orders have been good. Most markets, in general, have picked up for us, but that can be hit or miss depending on where you’re in the country,” says Matt Collins, Ditch Witch Product Manager of Compact Equipment. “For equipment in our compact line, landscaping and irrigation has remained steady. Of course, it’s been bigger, but it’s steady now. Plumbing and electrical markets have also picked up, and we are starting to see some utility business from gas companies and fiber has been buying products. We also feel there is some potential work for cable drops and that kind of work later in the year.”
The sentiment throughout the industry seems to be that the tough days are numbered and business will continue to grow, even slightly, into 2011 and 2012. “We feel like the second half of the year will be positive with good things to come later in 2011 and 2012,” Collins said with a hint of cautious optimism in his voice.
Like every business in the construction industry, manufacturers were hit just as hard in 2008 and 2009. The downturn led many manufacturers to re-evaluate their operations, streamline their production and look toward the future.
“Everyone realizes it’s been difficult and everyone has chipped in. Whether it’s a factory floor worker or engineer, we all know that we have to do our part,” says Jon Kuyers, Compact Solutions Manager for Vermeer. “We did not have any layoffs.
We maintained our workforce. It was pretty difficult and we all had to make sacrifices to make that happen. We knew that we’d eventually come out of this downturn and we’d be a stronger company for it. We continue to invest in product development, which has resulted in a few new products.”
Kubota, manufacturer of compact excavators, backhoe loaders and the recently-introduced SVL75 and SVL90 CTLs (see page 9 for details), took a close look at managing its machine inventories, while JCB rearranged its manufacturing operations — moving its backhoe loaders, telescopic handlers out of its Savanna, Ga., plant to make it the worldwide production headquarters of skid steers.
“The plan was to service the North American market, but when you produce multiple derivatives of the same machine in several locations, you’re not as efficient,” says Giorgianni. “The downturn has allowed us to look inward and maximize our efficiency. As we move forward, our plants our more dedicated to supporting a single product on a worldwide basis.”
Though sales are just starting to increase, manufacturers are ready for work. Bobcat, for example, announced that it will add more than 100 hourly positions at the company’s primary production facility in Gwinner, N.D.
Today’s manufacturing challenges revolve around supporting products and dealers when contractors are still reluctant to plunk down cash for new equipment. That means pre-owned product support in the form of parts and being able to provide equipment when their dealers need it.
“A lot of buying is project driven,” says Kuyers. “The customers don’t have the project today, they’ll have it tomorrow and they want the equipment the next day. There is no more lead time. You need a manufacturing and supply chain that respond to the customer’s needs. Our lean initiatives that we’ve undertaken in the past 10 years are paying their dividends now.”
Pre-owned and rent-to-own options have grown in popularity throughout the past year or so — leading several manufacturers like John Deere, Caterpillar and JCB to offer a certified pre-owned service. For example, Deere’s certified used equipment program sells machines that are thoroughly inspected by Deere-certified technicians and backed by an available warranty. “The technicians even perform oil sampling to help ensure the health of the machine,” says Gregg Zupancic, John Deere Construction and Forestry Product Marketing Manager for skid steers and CTLs.
Of course, rent-to-own and pre-owned affect manufacturers through their parts and services department. Indirectly, it also means increased sales down the line as rental fleets bulk up to replace sold machines and increase machine availability to their customers, explains Collins.
 |
| Ditch Witch’s 45-hp and under compact line has been strong this year. Rental business has also picked up. That’s a good sign that contractors are busy again. |
|
In order to meet the demands of their customers, manufacturers need a good bead on contractor needs. Since the downturn, contractors have simplified their machine wish list — forgoing bells and whistles in favor of bottom line costs. Contractors are paying close attention to the dollars they spend and they’re spending those dollars on things that are going to provide the biggest return on their investment.
“Customers are looking for equipment that’s productive and reliable,” says Collins. “I think what they’re looking at right now is the value to price ratio. Meaning, ‘I want something that digs from point A to B, how much do I want to invest in that equipment?’ I also think that customers are evaluating work loads — do they have work set out for six months down the line or are they month to month? That determines if they are going to rent or buy equipment.”
Contractors have to be able to do a lot of different kinds of work to keep cash flowing into their businesses. Customers are look at the versatility and flexibility of the machine, according to Giorgianni. While overall utilization is high on the list of demands, financing is another large part of the equipment-buying equation, says Keith Rohrbacker, Product Manager of construction equipment for Kubota Tractor Corp.
“If [contractors] can maintain a 50 percent utilization rate, then they should be able to cover payments and earn a profit,” says Rohrbacker. “When purchasing a compact excavator, customers should look for manufacturers that offer low rate financing, as low as 0 percent for 48 months and longer. But finance program offers change routinely with manufacturers, so always check with dealer for current finance program offers.
Despite the economic downturn, many manufacturers invested in new product development and over the past year, manufacturers have released new equipment — some have even introduced brand new product lines. There’s no shortage of machines for contractors who are looking for work. Before venturing out to the dealer, check out the next couple of pages to find out what’s new, what’s cool and what’s going to keep your crews working into next year.
Jason Morgan is Associate Editor of Utility Contractor.
| Bobcat Compact Machines |
 From skid steers and compact excavators to utility vehicles and track loaders, small equipment manufacturing giant Bobcat introduced a staggering 11 new machines this year. Most relevant to the utility markets is the new line of compact excavators. The E42 model is a conventional tail swing unit with a 41.8-hp, liquid-cooled diesel engine, which joins the Bobcat M-Series compact excavator line in the 4- to 5-ton weight class. The new Bobcat E45 compact excavator features true zero tail swing, making it ideal for working in areas close to walls, fences and buildings. The E45 joins the Bobcat M-Series excavator line in the 4- to 5-ton weight class with an operating weight of 9,246 lbs.
With a tail swing of less than 1 in., the new Bobcat E50 compact excavator can work in confined areas without sacrificing digging performance. The E50 joins the Bobcat M-Series with an operating weight of 10,677 lbs and an overall width of 77.2 in., making it easy to transport, while a bucket breakout force of 9,442 lbs provides power for tough conditions. When it comes to small size, the model 324 has a hydraulically retractable undercarriage, going from a width of just 38.6 in. (for travel through gates and doorways) to a width of 53.7 in. (for more stable performance).
The fun doesn’t stop there — Bobcat also released its largest CTL, the T870, along with what will be the largest skid loader in its lineup, the S850. The 10,008-lb S850 has a rated operating capacity (ROC) of 3,875 lbs — 17 percent more than the current largest skid loader, the S330. The 12,678-lb T870 has a ROC of 3,325 lbs, or 7 percent more than the current largest compact track loader (the T320). In addition, the loaders are the highest lifting loaders in the industry with 144-in. lift height. |
| Wacker Neuson Wheel Loaders |
 Several years ago, German equipment manufacturer Wacker Neuson set its complete line of compact machinery loose on the North American market and it hasn’t looked back. Wacker Neuson has continued to introduce a number of new models, including three wheel loaders, the all-wheel steer 1150, the 750T with a telescopic boom and the articulated WL50 wheel loader, plus two excavators the 28Z3 and 6003, and one dumper, model 1501.
“These machines were introduced to round out our product offering,” says Jay A. Baudhuin, Product Manager of Compact Equipment. “These machines are new to the American market but are jobsite proven in Europe.”
Wacker Neuson currently offers eight different compact wheel loader models, and it’s currently the only manufacturer that produces and sells two different styles of wheel loaders in North America. The articulated steering wheel loaders — WL18, WL25, WL30 and WL50 — and the all-wheel steer wheel loaders — 280, 850, 750T and 1150.
Bucket capacities range from 0.26 cu yd to 1.5 cu yd. The WL25 and up all have differential locks to help increase traction in extreme terrain conditions. The WL25, WL30 and 280 have an option of either a canopy or cab. Select models do have the option of 19 mph travel speed. The WL18, WL25, WL30 and 280 have universal style mounting plate, standard. The larger models, 850, 750T, WL50 and 1150, can be outfitted with a universal style adapter plate to run many standard attachments. Auxiliary hydraulics come standard on all models. |
| Hitachi Compact Excavators |
 Hitachi recently released the ZX27U-3, ZX35U-3 and ZX50U-3 compact excavators, which are all about reducing operating costs — from use of fuel-efficient engines and durable materials to concentrated inspection points and extended service intervals. The standard manual quick coupler/hydraulic attachment package control the auxiliary hydraulics with a slide switch on top of the right-hand control lever. The ZX50U-3 also comes with an optional hydraulic adjustable-angle backfill blade. It features 25 degrees of adjustment both left and right for more efficient trench backfilling. The blade angle changes easily with buttons on top of the blade control lever.
|
| Ditch Witch Walk-Behind Trenchers |
 Ditch Witch recently introduced three new models of walk-behind trenchers — the RT10, RT12 and RT24. These machines are based around 2- to 3-ft dig depths and roughly 6- to 8-in. widths. They are used by rental, eletricians, plumbers, landscapers and curb-to-house installations like gas.
“They are an all hydraulic machine, so from a service point of view, there are no mechanical linkages or belts to stay on top of, so reliability-wise the contractor has less maintenance to do,” says Collins. “We also offer hydraulic steering. Before this model, you had to manually steer the machine by applying weight on the back end of it, but with the stroke of a lever on the new machines, you can turn the machine.”
The RT24 is designed with more weight on the digging chain, so it can put more product in the ground faster, and its trenching capacities of 48 in. deep and 8 in. wide enable a contractor to install a wide variety of utilities and irrigation systems. Because of its ease of use, and because it is ideal for short runs, the 11-net-hp RT10 is expected to be a popular rental item among homeowners and small contractors. For bigger jobs and longer runs, the RT12 is equipped with more horsepower (16 gross hp) and an oil cooler that keeps its Vanguard engine running strong even on the hottest days. |
| JCB Compact Telehandler and Backhoe Loader |
 During Bauma, the largest construction industry tradeshow in the world that took place in last April, JCB unveiled a jaw-dropping 11 new machines, including the world’s tiniest compact telehandler and a more efficient backhoe loader. Being less than 6 ft tall, the 515-40 telehandler can fit through doorways or low building heights that often prove to be obstacles for other machines. Thanks to the chassis design, there is no compromise on cab size to achieve the 1.8-m height; the interior is spacious with superb visibility. The 515-40 gives shovel performance comparable to a skid steer or wheeled loading shovel. Plus, individual hydraulic wheel motors and four-wheel steer equals superb movement in the face of tight corners, pillars and narrow doorways.
The backhoe loader offers customers average fuel savings ranging from 6 to 16 percent at typical daily work rates. This new feat is largely achieved through the introduction of a new EcoDig system incorporating three hydraulic pumps. Users will be hit immediately by the striking new design of the machine which exudes ruggedness and strength, thanks to a re-styled counterweight and new vertical grille pressings. The sharper lines on the excavator and loader profiles contribute to the robust look, while the sloping bonnet retains excellent forward visibility. |
| John Deere D-Series Compact Track Loaders and Skid Steers |
 This past year, John Deere unleashed a combined total of nine new skid steers and CTLs. One of the most dramatic differences in the D-Series is the cab. Overall, D-Series cabs feature 24 percent more room than their predecessors and six more inches of headroom. They are also quieter, positively pressurized and easier to get in and out of, due to a larger door opening. “Even with all the changes, visibility to the work is better than the industry-leading visibility on the previous generation 300 Series machines,” says Gregg Zupancic, John Deere Construction and Forestry Product Marketing Manager for skid steers and CTLs.
The 50-percent noise reduction in and around the D-Series cab comes from several sources beyond mere sound absorption, including a hydraulic fan drive, an auto idle feature (which also saves fuel) and the new electronically controlled engines. The Tier 3/interim Tier 4 engines, coupled with a new auto idle feature, also provide quieter operation and fuel savings.
“Customers asked us if they could adjust the maximum speed and sensitivity of the boom and bucket when operating in a specific application,” Gregg Zupancic said. “They also asked for a Creeper mode to slow down wheel speed independently of the engine speed. So we created the enhanced operator productivity option, called the EH Performance Package, where the operator can make adjustments to create a machine that perfectly fits his application or skill level.” |
| Kubota Compact Excavator |
 You’ve heard about the new Kubota CTLs, but don’t forget about the U55 compact excavator the manufacturer launched this past March. Kubota introduces the U55, its largest model in the U-Series of compact excavators. The new Kubota U55 5-ton, tight tail swing compact excavator is designed a medium-length arm that enhances arm crowd force, a wide doorway and plenty of operator space. The U55 replaced Kubota’s popular KX161-3 compact excavator.
Built with a 47.6-gross-hp direct-injection Kubota diesel engine, the U55 provides plenty of power for any compact excavator job. The U55 has a tail swing overhang of only 2.5 in. and is powerful, yet compact enough to operate efficiently and carefully in narrow work spaces.
“Before introduction of the new compact exactor, Kubota Sales and Engineering staff visited our existing customers to ascertain their needs so that we can incorporate performances and features in the new model,” says Keith Rohrbacker, Kubota Product Manager. “We also visit customers after a year or so. Our customer satisfaction survey provides valuable feedback that we have satisfied their needs.” |
| Vermeer Mini Skid Steer and TrenchSense |
 The new Vermeer S800TX mini skid steer features a 35-hp diesel engine and 14 gpm of hydraulic flow for exceptional power. The unit is available with an optional dual auxiliary hydraulic control for increased controllability with varying attachments. With a rated operating capacity of 2,300 lbs, the S800TX can efficiently lift and transport sod, stone, rock and gravel around jobsites. The new model is 40.5 in. wide for greater maneuverability and access through confined spaces. A universal mounting plate provides the ability to quickly change out attachments on site, including a trencher, auger and power rake. The S800TX also features a standing, dedicated ride-on operator’s platform for 360-degree visibility.
Vermeer also released its new TrenchSense electronic control system last fall. Designed for use on select Vermeer utility trenchers, the industry-exclusive TrenchSense system helps eliminate engine stalls and stops when encountering difficult digging conditions. When trenching in AutoCreep mode, the patent-pending TrenchSense system actively monitors engine rpm, and upon sensing a sudden drop in engine rpm or if chain operation stops, the tractor automatically pauses forward creep and backs up slightly. Simultaneously, the trencher chain also slightly reverses to dislodge material. Once the engine recovers, forward trencher chain motion and forward creep automatically resumes to previous settings and engine rpm helping to enhance productivity by eliminating the need to return controls to neutral and restart. |
|
