Improved Markets Boost Smaller Wheel Loaders

Sept. 25, 2015

Buyers looking at wheel loaders in the versatile 100-to-200-horsepower size class will find improved markets and units loaded with features, though some manufacturers are finding the more robust market siphons some skid steer sales.

More insights into loader aquisition and management

“Wheel loaders in this size class make up the highest sales volume of any wheel loader size class,” says Mike Stark, Doosan’s wheel loader product specialist. “When we compare 2014 sales to 2013 based on data provided by AEM, every quarter from 2014 was up from 2013. It’s still too early to tell how this size class is doing in 2015, but we know historically that the end of the year is a key buying time for this size of wheel loader.”

Hyundai’s marketing manager, Corey Rogers, agrees on growth, but does offer a glimpse into 2015 so far. “The overall industry trend has grown over the past three years. In the first half of 2013 compared to the same period in 2014, year-over-year growth in these classes averaged around 8 percent. This year for the same period, 2015 North American industry growth in those specific net horsepower classes is around 2 percent,” Rogers says.

Wheel Loader Cost of Ownership

Size class (hp) Avg price Hourly rate*
100-109 $79,507 $30.06
110-119 $83,594 $25.90
120-134 $105,783 $31.58
135-149 $126,791 $30.02
150-174 $136,393 $35.33
175-199 $157,881 $35.44

*Hourly rate represents the monthly ownership costs divided by 176, plus operating cost. Unit prices used in this calculation: diesel fuel, $3.46 per gallon; mechanic’s wage at $52.33 per hour; and money costs at 2.125 percent.

Nick Tullo, sales manager for SDLG North America, adds an international perspective. “This size class machine makes up 60 percent of the wheel loader market,” he says. “The market has mainly increased in this size class since 2013 mostly due to construction expenditures globally, growing population centers and an expanding rental market. The slowdown in China has retracted growth throughout 2015 globally, but now North America is the focal market for most OEMs,” Tullo says.

“We’ve seen this market class grow 15 percent annually since 2010, particularly as dealers re-fleeted during the downturn,” says Eric Yeomans, product manager for GPPE Products, Volvo Construction Equipment. “The major segments exhibiting growth are dealer-owned and independent rental fleets, governmental, agriculture, commercial building, recycling and road construction.”

Yeomans notes impressive growth in the recycling segment and doesn’t count out a generally slumping energy market. “Recycling, and in particular, loading operations at waste transfer stations, has seen strong growth due to stricter environmental regulations. The energy segment, while currently in a down cycle, has seen good utilization of this size class loader for pipe placement and loading, and assisting cranes in setting windmills,” he says.

Rental activity in the 100-to-200-horsepower segment seems to be stronger than ever.

“The rental segment has seen the biggest changes,” says Crain McGinnis, Komatsu’s product marketing manager for wheel loaders. “As the life cycle of a project is shortened from bidding to quoting to starting to completion, more companies find they need additional equipment quickly for new projects. Renting or leasing offers these customers the option to get out of the equipment if another job doesn’t develop before the current one is finished. Of course, we hope they’ll find more work and just purchase their loader, but customers now lease instead of purchasing older machines.”

Some OEMs feel smaller loaders are poaching sales from skid steer loaders and an exclusive sampling of Construction Equipment readers confirms this is occurring at least on some scale (see graph, bottom right). “The compact wheel loader market has shown remarkable growth, in part due to the transition from skid steer loaders, and additionally, the compact loader is the new utility piece on job sites and in material production,” says Sam Shelton, marketing administrator for loader specialist Kawasaki. “Compact wheel loaders are gaining market share from skid steer loaders.”

Skid steer vs. compact loader: Keep an open mind

In an aggressive sales bulletin on the subject, the company mentions some reasons why, including greater tipping load, more reach for loading into trucks, more speed in load-and-carry operations, better all-around visibility, longer tire life, and a longer useful life. Kawasaki says compact loaders can last 6,000 to 8,000 hours in most applications, and that most skid steers are used for only about 5,000 hours before they are retired.

“Some contractors are replacing skid steers with small loaders,” McGinnis concurs. “As customers see more utilization and spend more time in the machine, they begin to appreciate the extra comfort of a wheel loader. Longevity and performance are key criteria; once a contractor can get enough utilization, the smaller loaders make more sense.”

Volvo’s Yeomans also cites performance and performance-driven improvements, which reinforce the fact small loaders are doing more.

“The trend that we’re seeing for Volvo loaders is that customers are getting more performance out of their machines, and in some cases, are able to downsize to a lower horsepower model and still improve their productivity—and save in total cost of ownership,” Yeomans says. “This is the result of design enhancements that include better pumps, matched components and more efficient engines.”

McGinnis also mentions that users want to do more with less, and because smaller machines have become more powerful with increased horsepower, tipping load and breakout force, smaller machines are more of an option than they once were.

“A machine in a lower size class typically costs less initially, has lower over all owning and operating costs and fits into tighter spaces [than a larger loader],” McGinnis says. “More specifically, there is a trend towards unifying the loaders below 175 horsepower. Historically, most OEMs had at least two variations on each model with different types of linkages [Z-bar versus parallel lift versus tool carrier]. Now you see a push toward one machine that can be used in all applications.”

McGinnis says Komatsu’s strategy was to improve its “PZ” linkage by increasing the breakout forces over previous models. “This created a parallel-lift machine that can also behave like a traditional Z-bar for both pallet handling and raw digging power, respectively.”

Terex, in addition to offering hydrostatic drive in its TL120, has a linkage that incorporates both Z-bar and parallel designs, giving operators the breakout power of Z-bar as well as parallel lifting capabilities. Volvo calls the double-acting linkage on its H Series 100-to- 200-horsepower models a Torque Parallel, or TP, linkage, and touts its front visibility along with breakout torque and parallel movement throughout the entire lifting range.

Another trend manufacturers are seeing and acting upon is the demand for hydraulic quick couplers for faster and easier attachment use. “A greater majority of loaders are purchased with hydraulic couplers and are performing more functions on a job site, which allows customers to reduce the overall size of their fleets and reduce operating costs,” says Chris Cline, product marketing manager, utility wheel loaders, John Deere Construction & Forestry.

“The quick coupler allows the operator to change attachments from inside the cab with a push of the button, and advancements in couplers have made them lighter, stronger, and improved the operator’s ability to see the attachment as well,” McGinnis says.

“Hydraulic quick couplers are very common, especially with the tool carrier iterations, to quickly switch from a bucket to a pallet fork,” Doosan’s Stark says. “For example, on job sites where users are handling pipes, it makes it convenient to connect the pallet fork to pick up and transport pipes, then switch to a bucket to move material.”

Other features operators are showing a preference for include hydrostatic drive and increased automation. Both of these will become more prevalent in the future, as well. Manufacturers are already betting on it.

“Automation is growing in popularity across all product groups,” says Vincent Whelan, VP of Product, JCB. “When it comes to wheel loaders, we can anticipate more automation, primarily in the cab with controls, and features moving more towards automotive styling, comfort and productivity. Also specific to wheel loaders, features such as automatic weighing and last-load recall, which allows the machine to be refilled to the same capacity each time, creates efficiencies that help reduce personnel costs and maximize machine use.”

Whelan also sees versatility continuing to be a theme. “We anticipate small to mid-size loaders will increasingly be utilized as tool carriers, with traditional loaders continuing to be used as primary material movers,” he says.

“Also, the versatility of wheel loaders allow them to be used in hazardous and dangerous conditions where they can move large amounts of material quickly. Remote control technology exists today, but is sparsely used. It will grow in popularity in handling of hazardous materials,” according to Whelan.

But what’s right for managers, now and in the future, still depends on company and application needs.

“Make sure you explain to your dealer what your needs are and ask the dealer a lot of questions about machine features and how those features can help the bottom line of their business to make them more profitable,” Deere’s Cline says.

Stark lays out a logical order or pre-purchase considerations.

“A fleet manager should start with a thorough review of wheel loader specifications,” he says. “Some key specs are static tip load and full-turn tip load. Next, managers should size the wheel loader to the application and match the correct bucket size to the machine. Some things to consider with a smaller wheel loader include a tighter turning radius than larger wheel loaders, and the ability to complete more cycles because the operator is able to maneuver better on a job site than a larger wheel loader,”

SDLG, in tune with its value-priced market position, says managers should understand the difference between features they really need for their operation and what may be excess. “A value-priced machine would complement their fleet in helping keep capital expenditures controlled,” Tullo says. “And although we have several machines working 24-hour shifts for several months out of the year in higher-production applications, an SDLG loader, with its new machine warranty, and namely, the price, works well in low-hour applications where a used, or even new, premium loader would otherwise work.”

Komatsu’s McGinnis says fleet managers should consider overall owning and operating costs for the machine, and not just initial purchase price. He also cautions that size matters.

“The days of just picking the machine that weighs the most or has the most horsepower are over,” he says. “Decide what job needs to be performed and talk to an equipment salesperson about what size they recommend. We find customers sometimes overestimate or underestimate the size machine they may need.”