US Caterpillar bets on autonomous driving technology against corona

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According to Caterpillar’s in-house data obtained by Reuters, sales of autonomous driving technology for mining operations this year are up double digits year-on-year. On the other hand, sales of other construction machinery such as bulldozers and mining trucks have fallen in the last nine months, as well as other construction machinery giants such as Komatsu 6301.T and Deer.

Fred Rio, Caterpillar’s Construction Digital & Technology Division, said it will bring to market remote control technology that can be steered from a few miles away in January next year.

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According to Rio, Caterpillar is also working with space agencies to develop satellite-based technology. Using this technology, workers in the United States can communicate with construction equipment at any site in the world.

However, Caterpillar did not adopt a strategy focused on the autonomous driving field until the new corona epidemic began. In response to the slump in business since the company was founded, it launched such a strategy in 2017 as part of its sales increase plan.

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However, autonomous driving technology is still in its infancy, and from the perspective of Caterpillar’s overall management, it is only a very small department. The company hasn’t disclosed sales in the autonomous driving sector, but no matter how much demand is rising, it won’t make up a significant proportion of total sales in the near future. Caterpillar’s total sales last year were about $ 54 billion.

For Caterpillar, which spends billions of dollars on research and development, autonomous driving technology is costly. However, it is unclear whether autonomous driving and remote control technologies will be able to maintain demand for a long period of time even after the outbreak of the new corona, and there is a risk that new sales of construction machinery will decline due to productivity improvements driven by high technology.

Increasing enthusiasm

However, autonomous driving technology is contributing to orders from customers who have rarely purchased Caterpillar construction equipment.

Last year, resource giant Rio Tinto RIO.L purchased self-driving trucks, remote-controlled blast drills and loaders from Caterpillar for work at the Kudai Deli Iron Mine in Australia. Rio Tinto declined to comment on the deal.

The mining industry has already partially introduced these technologies in self-driving trucks and remote roadhole dump trucks. However, the spread of the new corona accelerated due to lockdown caused by the spread of infection.

Anthony Cook, who is in charge of autonomous driving technology at Komatsu Ltd., said that many customers are moving ahead with capital investment plans and introducing autonomous driving due to the new corona epidemic. The new corona crisis is not a blow to the autonomous driving field, but “rather, the degree of enthusiasm has increased.”

Discriminatory advantage

Caterpillar and Komatsu have a large share of the world’s “Unmanned Dump Truck Driving System (AHS)”. However, some analysts say that Caterpillar, which uses a method that can be retrofitted to other companies’ devices, is superior. Komatsu’s technology can only be used with its own products.

Mr. Cook of Komatsu Ltd. said that the retrofit method is an immediate solution, and Komatsu is developing a technology that can operate equipment of different brands safely and efficiently.

On the other hand, Caterpillar Jim Hawkins said that mining companies can purchase hardware and software for automatic operation without spending a large amount of money to review the entire construction machine, so a method that can be retrofitted is He said that he contributed to the increase in sales.

Caterpillar sells autonomous driving technology separately from construction machinery. According to Hawkins, retrofitting autonomous driving technology to existing construction equipment has been the biggest driver of growth so far, but recently more and more customers are ordering construction equipment that incorporates this technology from the beginning.

According to Hawkins, Caterpillar charges fees for hardware, software, licenses, etc., and the cost of deploying these technologies can range from $ 50 million to $ hundreds of millions, depending on size and contract duration.

Caterpillar is working to increase service-related sales, with the goal of raising sales in this area from $ 18 billion last year to $ 28 billion in 2026.

Rob Warsaymer, an analyst at Melius Research, said the demand for replacement of aging construction equipment and the introduction of autonomous driving technology by mining companies will be a tailwind for caterpillars who have a “discriminatory advantage” over their rivals. Pointed out. “Caterpillar is in a strategically good position,” he said.

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