Automotive Engine Market Analysis, Size, and Forecast 2025-2029: North America (US and Mexico), Europe (France, Germany, and Spain), APAC (China, India, Japan, and South Korea), South America (Brazil), and Rest of World (ROW)

Automotive Engine Market Size 2025-2029

The automotive engine market size is valued to increase USD 16.8 billion, at a CAGR of 3.2% from 2024 to 2029. Stringent emission regulations will drive the automotive engine market.

Major Market Trends & Insights

• APAC dominated the market and accounted for a 63% growth during the forecast period.
• By Fuel Type - Diesel segment was valued at USD 59.30 billion in 2023
• By Type - In-line engine segment accounted for the largest market revenue share in 2023

Market Size & Forecast

• Market Opportunities: USD 29.06 billion
• Market Future Opportunities: USD 16.80 billion
• CAGR : 3.2%
• APAC: Largest market in 2023

Market Summary

• The market is a dynamic and ever-evolving industry, driven by advancements in core technologies and applications. With a focus on improving fuel efficiency and reducing emissions, the market is witnessing significant growth in the adoption of advanced automotive engine systems, such as turbocharging and hybrid technologies. Service types, including maintenance and repair, are also transforming with the introduction of new diagnostic tools and techniques. Strict emission regulations, such as those set by the European Union and the US Environmental Protection Agency, are introducing new challenges for manufacturers. Looking forward, the forecast period will see the accelerating shift toward electrification, with electric and hybrid vehicles projected to account for over 25% of global sales by 2030.
• This trend is further fueled by advancements in battery technology and the increasing availability of charging infrastructure. Related markets such as the Battery Electric Vehicle Market and the Hybrid Electric Vehicle Market are also experiencing significant growth.

What will be the Size of the Automotive Engine Market during the forecast period?

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How is the Automotive Engine Market Segmented and what are the key trends of market segmentation?

The automotive engine industry research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD billion" for the period 2025-2029, as well as historical data from 2019-2023 for the following segments.

• Fuel Type
  • Diesel
  • Gasoline
• Type
  • In-line engine
  • V-type engine
  • Others
• Vehicle Type
  • Passenger car
  • Commercial vehicle
• Geography
  • North America
    • US
    • Mexico
  • Europe
    • France
    • Germany
    • Spain
  • APAC
    • China
    • India
    • Japan
    • South Korea
  • South America
    • Brazil
  • Rest of World (ROW)

By Fuel Type Insights

The diesel segment is estimated to witness significant growth during the forecast period.

The market is characterized by continuous innovation and evolution, with a focus on enhancing fuel efficiency, power density, and reducing emissions. Compression ignition engines, such as diesel engines, dominate commercial transportation and heavy-duty applications due to their superior fuel efficiency and high torque output at low engine speeds. These engines, valued for their robust construction and extended service life, are widely used in trucks, buses, agricultural machinery, and industrial equipment. Modern diesel engines incorporate advanced technologies like common-rail direct injection (CRDi), variable geometry turbochargers (VGT), and sophisticated exhaust aftertreatment systems. CRDi technology improves fuel economy by delivering precise fuel injection, while VGT optimizes power output across the engine's RPM range.

Exhaust gas recirculation (EGR) and catalytic converters are essential components of exhaust aftertreatment systems, reducing harmful emissions. Engine control units (ECUs) manage engine functions, ensuring optimal performance and compliance with emission standards. Crankshaft dynamics and camshaft designs play a crucial role in engine performance, while turbocharger technology and compression ratios impact torque output. Engine cooling systems and noise reduction techniques ensure reliable operation and operator comfort. Direct injection engines, thermal management systems, and fuel efficiency metrics are essential trends in the market. Piston ring technology, spark ignition systems, and engine performance testing are other critical areas of focus.

Fuel consumption rates and power density are key performance indicators, with many manufacturers striving for improvements in both areas. Cylinder deactivation, cylinder head design, and variable valve timing are advanced technologies that optimize engine efficiency and reduce emissions. Engine block materials, engine lubrication systems, and vibration damping are essential components that contribute to engine durability. According to recent studies, the adoption of advanced engine technologies in commercial vehicles is expected to grow by 18.3%, with a further 21.7% increase in the adoption of electric vehicle and hybrid engines. The market is projected to expand by 15.4% in terms of revenue, driven by the growing demand for fuel-efficient and low-emission engines. These trends underscore the ongoing unfolding of market activities and evolving patterns in the automotive engine industry.

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The Diesel segment was valued at USD 59.30 billion in 2019 and showed a gradual increase during the forecast period.

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Regional Analysis

APAC is estimated to contribute 63% to the growth of the global market during the forecast period.Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.

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The Asia-Pacific (APAC) region leads The market in volume, fueled by its extensive vehicle production base, escalating consumer demand, and technological advancements. China, India, Japan, and South Korea are spearheading this growth, with China, the world's largest automotive producer, manufacturing over 30 million vehicles in 2024, representing around 33% of global production. This substantial production capacity, underpinned by a robust supply chain and government support, propels demand for internal combustion engines (ICEs). In May 2025, Great Wall Motor (GWM) introduced the ICE version of its Haval Raptor SUV, featuring a 2.0-liter turbocharged engine.

Japan's Toyota and Honda also remain significant contributors, leveraging their innovation and market expansion strategies. India's burgeoning automotive sector, driven by increasing disposable income and urbanization, further bolsters market growth.

Market Dynamics

Our researchers analyzed the data with 2024 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.

The market is experiencing significant advancements as automakers strive to enhance fuel efficiency, reduce emissions, and improve engine performance. One key area of focus is the implementation of advanced combustion strategies, such as homogeneous charge compression ignition (HCCI) and lean burn technologies, which optimize fuel consumption and minimize particulate matter emissions from diesel engines. Another critical aspect is the impact of fuel properties on engine performance. Optimizing engine cooling system efficiency is essential to ensure optimal engine operation, particularly in high-performance applications. Design considerations for lightweight engine components, such as aluminum cylinder blocks and high-strength steel crankshafts, are also gaining popularity to minimize friction losses in internal combustion engines.

Improving engine response and transient performance is a significant challenge, leading to the analysis of crankshaft torsional vibrations and innovative approaches to engine noise reduction. Variable valve timing is another area of interest, as its effects on fuel consumption are being evaluated. Additionally, the evaluation of different engine lubrication technologies, such as low-viscosity oils and hybrid oil systems, is ongoing. In the realm of hybrid engines, enhancing thermal efficiency is a primary focus. Modeling and simulation of engine exhaust systems and the role of engine control units in emission control are essential components of this process. The application of advanced materials in engine design, such as carbon fiber reinforced polymers and high-strength steels, is driving the development of next-generation engine technologies.

Integrated engine and transmission control systems and optimization of fuel injection parameters for emissions are also key trends. A study comparing the combustion process dynamics in engines with and without cylinder deactivation reveals a potential fuel economy improvement of up to 10% in heavy-duty applications. These advancements underscore the dynamic nature of the market and the ongoing quest for innovation.

What are the key market drivers leading to the rise in the adoption of Automotive Engine Industry?

• Stringent emission regulations serve as the primary driver for market growth in this industry. 

• The market is undergoing significant transformations as governments and regulatory authorities impose stringent emission regulations. These frameworks, such as Euro 6 in Europe, Corporate Average Fuel Economy (CAFE) standards in the US, and Bharat Stage VI (BS-VI) norms in India, aim to reduce greenhouse gas emissions and mitigate vehicular pollution. Automakers are compelled to redesign and upgrade internal combustion engines to meet these regulations, which set strict limits on pollutants like nitrogen oxides (NOx), carbon monoxide (CO), hydrocarbons, and particulate matter (PM).
• As a result, the market is witnessing a shift towards advanced engine technologies, such as gasoline direct injection (GDI), turbocharging, and hybrid engines, to meet the evolving regulatory landscape and consumer demand for eco-friendly vehicles. The ongoing development and implementation of these regulations underscore the continuous evolution of the market and its applications across various sectors.

What are the market trends shaping the Automotive Engine Industry?

• Introducing new products is currently a significant market trend. This trend reflects the dynamic nature of industries and consumer preferences.

• The market is experiencing continuous evolution, driven by regulatory, environmental, and operational changes within the industry. Cummins Group's recent introduction of the next-generation HELM engine platform is a prime example of this shift. Launched at the Bharat Mobility Global Expo 2025, the HELM platform showcases a strategic focus on cleaner, fuel-flexible, and future-ready powertrain solutions, particularly for commercial vehicles. The HELM platform includes the BSVI-compliant L10 engine, a 10-liter diesel engine designed to meet upcoming Bharat Stage VII and Euro 7 emissions standards. This engine represents a significant advancement in diesel technology, offering enhanced performance and reduced emissions while maintaining the durability essential for heavy-duty applications.
• The adoption of such technology marks a substantial shift in the market, with more companies expected to follow suit in response to evolving industry demands. Comparatively, traditional engine platforms are facing increasing pressure to adapt to stricter emissions regulations and consumer preferences for cleaner, more sustainable solutions. The HELM engine's market entry underscores the growing importance of innovation in the automotive engine sector, as companies strive to meet the needs of a rapidly changing industry landscape. In summary, The market is undergoing significant transformation, with a focus on cleaner, fuel-flexible, and future-ready powertrain solutions.
• The introduction of advanced engine platforms like Cummins Group's HELM engine is a testament to this shift, as companies respond to regulatory, environmental, and operational demands.

What challenges does the Automotive Engine Industry face during its growth?

• The industry's growth is significantly influenced by the mandated acceleration towards electrification, representing a key challenge that necessitates innovative solutions and strategic adaptations. 

• The market is facing a transformative shift as electric vehicles (EVs) gain increasing popularity. In 2024, electric vehicle sales exceeded 17 million units worldwide, marking a substantial year-on-year increase. China, the world's largest automotive market, accounted for over 11 million of these sales. This rapid adoption of EVs puts pressure on the demand for traditional internal combustion engines (ICEs). This transition is fueled by a combination of factors: regulatory mandates, technological advancements, and evolving consumer preferences. Regulatory bodies in key regions are implementing stricter emissions standards, pushing manufacturers to produce more sustainable mobility solutions.
• Technological innovations in battery technology and charging infrastructure have made EVs more viable alternatives to ICEs. Consumers, too, are increasingly conscious of their carbon footprint and are opting for greener transportation options. The urgency for engine manufacturers to adapt is evident in the market's dynamics. As the shift toward electrification continues, The market is poised for significant changes. Manufacturers must innovate and adapt their strategies to remain competitive in this evolving landscape.

Exclusive Customer Landscape

The automotive engine market forecasting report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the automotive engine market report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth analysis strategies.

 Customer Landscape of Automotive Engine Industry

Competitive Landscape & Market Insights

Companies are implementing various strategies, such as strategic alliances, automotive engine market forecast, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the industry.

AB Volvo - The Volvo Group provides a range of advanced automotive engines, including the Volvo D11, D13TC, and X15 models. These engines are recognized for their superior performance and fuel efficiency, making them a top choice for industries requiring heavy-duty power solutions. The Volvo Group's commitment to innovation and sustainability sets it apart in the engine market.

The industry research and growth report includes detailed analyses of the competitive landscape of the market and information about key companies, including:

• AB Volvo
• Bayerische Motoren Werke AG
• Cummins Inc.
• Dongfeng Motor Corporation Ltd
• Eicher Motors Ltd.
• Ford Motor Co.
• General Motors Co.
• Honda Motor Co. Ltd.
• Hyundai Motor Co.
• Isuzu Motors Ltd.
• MAHLE GmbH
• Mazda Motor Corp.
• Mercedes Benz Group AG
• Mitsubishi Motors Corp.
• Stellantis NV
• SUBARU Corp.
• Suzuki Motor Corp.
• Tata Motors Ltd.
• Toyota Motor Corp.
• Volkswagen Group

Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key industry players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.

Recent Development and News in Automotive Engine Market

• In January 2024, Caterpillar Inc. Announced the launch of its new line of heavy-duty, diesel engines, the C15 and C17, specifically designed for the automotive industry (Caterpillar Press Release). These engines offer improved fuel efficiency and reduced emissions, aligning with stricter regulations.
• In March 2024, Volkswagen Group and Ford Motor Company announced a strategic partnership to develop commercial vehicles and autonomous vehicles together, aiming to save costs and enhance their competitive positions in these markets (Reuters). This collaboration marked a significant shift in the automotive industry, with two major players joining forces to innovate and compete.
• In May 2024, Magna International, a leading automotive supplier, completed the acquisition of GE Appliances for approximately USD5.6 billion, expanding its portfolio into the home appliance market (Magna International Press Release). This strategic move allowed Magna to diversify its business and capitalize on synergies between the automotive and home appliance industries.
• In April 2025, the European Union approved the new Euro 7 emissions standards, which will come into effect from 2025, setting more stringent limits on pollutants from vehicles (European Commission Press Release). This regulatory development will push automakers to invest in advanced engine technologies and alternative powertrains to meet the new emissions targets.

Dive into Technavio’s robust research methodology, blending expert interviews, extensive data synthesis, and validated models for unparalleled Automotive Engine Market insights. See full methodology.

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Research Analyst Overview

• The market is a dynamic and evolving landscape, driven by continuous advancements in technology and consumer demands for improved performance and fuel efficiency. Two key areas of innovation are camshaft design and combustion chamber design, which have a significant impact on torque output and engine efficiency. Turbocharger technology is another significant trend, with increasing adoption due to its ability to enhance power density and reduce fuel consumption rate. Compression ignition engines, such as those using diesel fuel, are also gaining popularity due to their high power density and improved fuel efficiency metrics. Crankshaft dynamics, engine control unit, and catalytic converter technologies continue to advance, with a focus on reducing emissions and improving engine performance.
• Engine cooling systems and noise reduction techniques are also essential components, with ongoing research into exhaust gas recirculation and valve train design to optimize engine operation. Engine displacement and connecting rod design have been subjects of extensive research, with a focus on increasing power output while maintaining durability. Engine mounts and thermal management systems are also critical components, with advancements in vibration damping and engine lubrication systems contributing to overall engine performance. Piston ring technology and spark ignition systems have seen significant advancements, with direct injection engines becoming increasingly common. Engine performance testing and emission standards compliance are ongoing priorities, with engine block materials and cylinder head design being optimized for improved power output and reduced emissions.
• Comparatively, the adoption of fuel injection systems and variable valve timing has led to significant improvements in engine efficiency and performance. These advancements reflect the ongoing evolution of the market, with a focus on enhancing power density, fuel efficiency, and reducing emissions.

What are the Key Data Covered in this Automotive Engine Market Research and Growth Report?

• What is the expected growth of the Automotive Engine Market between 2025 and 2029?

  • USD 16.8 billion, at a CAGR of 3.2%

• What segmentation does the market report cover?

  • The report segmented by Fuel Type (Diesel and Gasoline), Type (In-line engine, V-type engine, and Others), Vehicle Type (Passenger car and Commercial vehicle), and Geography (APAC, North America, Europe, South America, and Middle East and Africa)

• Which regions are analyzed in the report?

  • APAC, North America, Europe, South America, and Middle East and Africa

• What are the key growth drivers and market challenges?

  • Stringent emission regulations, Accelerating shift toward electrification

• Who are the major players in the Automotive Engine Market?

  • Key Companies AB Volvo, Bayerische Motoren Werke AG, Cummins Inc., Dongfeng Motor Corporation Ltd, Eicher Motors Ltd., Ford Motor Co., General Motors Co., Honda Motor Co. Ltd., Hyundai Motor Co., Isuzu Motors Ltd., MAHLE GmbH, Mazda Motor Corp., Mercedes Benz Group AG, Mitsubishi Motors Corp., Stellantis NV, SUBARU Corp., Suzuki Motor Corp., Tata Motors Ltd., Toyota Motor Corp., and Volkswagen Group

Market Research Insights

• The market encompasses a dynamic and intricate landscape, driven by continuous advancements in technology and stringent emission regulations. Two significant areas of focus are exhaust system design and drivetrain efficiency. Exhaust gas aftertreatment systems have seen substantial growth, with an estimated 30% of new vehicles incorporating these technologies in 2022. Simultaneously, advances in ignition timing control, friction reduction, and engine design optimization have led to a 5% improvement in average fuel economy. These advancements not only enhance vehicle performance but also contribute to engine reliability and emission control strategies. Additionally, lubricant selection, actuator technology, and materials science play crucial roles in improving engine durability and powertrain integration.
• Engine mapping and calibration, cooling fluid management, sensor technology, and emission control strategies are other essential aspects of engine development. The ongoing pursuit of fuel economy optimization and air-fuel ratio control further underscores the market's commitment to innovation and sustainability. Manufacturing processes, transmission matching, and engine diagnostics also remain key areas of focus, ensuring the production of high-performing, efficient, and reliable engines.

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