Marine Propulsion Engine Market Analysis APAC, Europe, North America, Middle East and Africa, South America - China, South Korea, Japan, Germany, US - Size and Forecast 2024-2028

Marine Propulsion Engine Market Size 2024-2028

The marine propulsion engine market size is forecast to increase by USD 1.25 billion at a CAGR of 3.2% between 2023 and 2028. The market is experiencing significant growth, driven by the increase in maritime trade and fleet size. This expansion is fueled by the rising demand for efficient and eco-friendly propulsion systems. A key trend in the market is the prospective incorporation of intelligent propulsion systems, which offer improved fuel efficiency, reduced emissions, and enhanced operational performance. Additionally, stringent MARPOL regulations mandating the reduction of sulphur oxide emissions from marine vessels are pushing the market towards the adoption of cleaner fuel options, such as liquefied natural gas (LNG) and hybrid propulsion systems. Overall, the market is poised for robust growth, with a focus on sustainability, efficiency, and regulatory compliance.

Market Forecasting and Size

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Market Segmentation

By Application 

The passenger segment will contribute a major share of the market. The passenger segment is an important segment in the market. This segment includes passenger ships, ferries, cruise ships, and other types of vessels designed to carry people across various waterways.  Engines used in the passenger segment are designed to provide high levels of reliability, efficiency, and passenger comfort while ensuring compliance with stringent environmental regulations.

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The passenger segment showed a gradual increase in the market share with USD 3.69 billion in 2018. Marine propulsion engines are typically classified by horsepower, fuel type, and technology. For example, diesel engines,  known for their fuel efficiency and reliability, are commonly used on passenger ships. Similarly, electric drive systems are gaining importance in the passenger segment due to their low noise and emission levels. The passenger segment also includes different types of vessels with different performance requirements,  from small ferries to large cruise ships. These engines used in the passenger segment are therefore available in a wide power range from hundreds of kilowatts to several megawatts. The demand is expected to continue to grow, driven by the growing demand for environmentally friendly and efficient propulsion solutions. Such factors drive the growth of the passenger segment in the market during the forecast period. 

By Region

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APAC is estimated to contribute 58% to the growth during the forecast year.  Technavio's analysts have provided extensive insight into the market forecasting, detailing the regional trends and drivers influencing the market's trajectory throughout the forecast period.

The shift in mass production of commodities to APAC due to the comparative cost advantages offered by the region was facilitated by the increasing size of container ships. As global trade expands, so does the demand for new vessels, especially containerships and tankers capable of transporting oil, natural gas, and more. The APAC countries such as China, Japan, and South Korea hold the highest share of the market. However, Japan has implemented strategies and plans to account for about one-third of the global shipbuilding industry in terms of ships completed by the end of the forecast period. These countries will continue to adopt heavy investments and technologies to increase their market share during the forecast period. 

Market Dynamics

The market is witnessing a transformation driven by concerns over fossil fuel consumption and environmental sustainability. Ship owners are increasingly exploring alternatives such as biofuels and synthetic fuels to replace traditional Heavy Fuel Oil. Moreover, advancements in exhaust gas aftertreatment systems and sensors enable better emission control and efficiency. Advanced controls and remote monitoring technologies optimize engine performance and maintenance. Electric propulsion, utilizing electrical motors, propellers, and pump jets, is gaining traction, reducing reliance on internal combustion engines. As the industry moves towards greener solutions, the focus remains on efficient utilization of natural resources and minimizing environmental impact in both consumer supplies and container ship sectors. Our researchers analyzed the data with 2022 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.

Key Market Driver

An increase in maritime trade and fleet size is the key factor driving the market. International maritime trade shows healthy growth every year. Rapid industrialization and economic liberalization are the two key drivers of maritime trade volume, facilitating trade between nations. The development of multi-fuel engines and increased fuel efficiency have made ships a viable means of transportation. Demand for shipping trade is the largest among developing countries in Asia. Population growth in emerging markets has increased the demand for commodities and raw materials from these regions. For this reason, there is an increasing demand for building bulk cars, containers, or cargo ships.

Additionally, large ships are essential for efficient trade. The size of a ship has a direct effect on increasing the number of goods carried on a voyage. The expansion of maritime trade and an increase in the number of ocean-going ships will lead to an increase in CO2 emissions. The growing interest in reducing marine emissions and tightening emissions regulations have led to increased adoption of low-carbon ships. Such factors are anticipated to drive the market during the forecast period. 

Significant Market Trends

Technology focus shifting toward the development of dual-fuel engines will fuel the market. As the name suggests, a dual-fuel engine is one that uses both diesel and gas as fuel sources to power a vessel's engine. These engines draw natural gas into the compression chamber along with air. Diesel is used to ignite the mixture, and gas serves as the primary fuel source. Diesel is commonly a standby fuel and is used when the gas supply to the engine is restricted. A major advantage of fuel switching to natural gas is the effective reduction of emissions compared to diesel engines and other engine technologies that only reduce specific emissions.

For example, Wartsila's low-pressure dual-fuel engine is renowned for its significant environmental benefits, reducing NOx emissions by 85%, SOx emissions by 99%, particulate matter by up to 99%, and lowering carbon dioxide emissions by 20% to 30%. These engines combine the high energy efficiency, reliability, torque, and power characteristics of diesel engines while offering operational cost savings by utilizing gas instead of diesel. The adoption of dual-fuel engines is particularly advantageous for merchant shipping lines seeking to cut fuel costs and reduce emissions simultaneously. These technological and commercial advancements are poised to drive market growth across diverse industries and regions during the forecast period, as companies prioritize sustainability and seek efficient alternatives to traditional diesel engines. The versatility and environmental advantages of dual-fuel engines position them as pivotal solutions in the global drive towards cleaner energy technologies. 

Major Market Challenge

Volatility in crude oil and natural gas prices can majorly impede the growth of the market.  Crude oil involves a complex value chain from production to distribution and supply and demand in the oil and gas industry, making accurate price forecasting extremely difficult. Oil prices have fluctuated many times over the past decade, making them a highly volatile commodity. Past and present oil price volatility has vaguely followed what is now called the 'oil price cycle'. However, it is difficult to predict oil prices.

Furthermore, increasing demand for natural gas will expose consumers to higher natural gas prices over time. Fluctuations in the prices of crude oil and natural gas affect the profits of oil and gas companies, creating a domino effect. Therefore, if the selling price falls, production will also fall. Some vessels, such as tankers, rely heavily on transporting crude oil and natural gas to refineries, end-users, and other stakeholders in the value chain, so the decline in production will affect the shipping industry. This will adversely affect the growth of the market during the forecast period. 

Key Companies & Market Insights

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

• AB Volvo: The company offers different types of marine propulsion engines such as inboard shaft, penta IPS, and automatic stendrive diesel.
• ABB Ltd: The company offers different types of diesel and gas marine propulsion engines.

We also have detailed analyses of the market’s competitive landscape and offer information on 18 market companies, including:

AB Volvo, ABB Ltd., BAE Systems Plc, Beta Marine Ltd., Caterpillar Inc., Cummins Inc., Daihatsu Diesel Mfg. Co. Ltd., General Electric Co., Hyundai Heavy Industries Group, IHI Corp., Kawasaki Heavy Industries Ltd., Kongsberg Gruppen ASA, Leonardo DRS Inc., Mitsubishi Heavy Industries Ltd., Porsche Automobil Holding SE, Rolls Royce Holdings Plc, Shandong Heavy Industry Group Co. Ltd., Steyr Motors Betriebs GmbH, Wartsila Corp., and Yanmar Holdings Co. Ltd.

Segment Overview

The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2024 to 2028, as well as historical data from 2018 to 2022 for the following segments.

• Application Outlook
  • Passenger
  • Commercial
  • Defense

• Type Outlook 
  • Diesel
  • Gas

• Region Outlook 
  • North America
    • The U.S.
    • Canada
  • Europe
    • The U.K.
    • Germany
    • France
    • Rest of Europe
  • APAC
    • China
    • India
  • South America
    • Chile
    • Argentina
    • Brazil
  • Middle East & Africa
    • Saudi Arabia
    • South Africa
    • Rest of the Middle East & Africa

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Market Analyst Overview

The market is undergoing significant transformation due to factors such as Heavy Fuel Oil (HFO) regulations, stringent emission standards, and the shift towards carbon-neutral fuels. Shipbuilders, fuel suppliers, and regulators are pivotal in shaping this transition. Technologies like electric propulsion engines and gas turbines are gaining traction, driven by concerns over greenhouse gas emissions and fuel efficiency. Initiatives like the International Maritime Organization (IMO) emission regulations and tax incentives for eco-friendly solutions are driving investment in intelligent ships and alternative fuels such as bio-methane and algal oils. Key players, including engine manufacturers like HSD Engine, are focusing on developing low-sulfur engines and waste heat reduction systems to meet Sulfur Emission Control Areas standards and reduce environmental impact. The market encompasses a wide range of vessels, from containerships to LNG carriers, each demanding efficient propulsion solutions to navigate the evolving regulatory landscape and meet 20,000 HP power requirements.

Additionally, the market is undergoing a paradigm shift driven by various factors, including regulatory pressures such as Sulfur Emission Control Areas, which necessitate the adoption of cleaner fuels and technologies to reduce sulfur oxides and nitrogen oxides (NOx) emissions. Engine manufacturers are innovating with advanced designs like gas turbines, dual-fuel diesel, and natural engines to meet stringent environmental standards while maintaining fossil fuel usage efficiency. Technological advancements such as artificial intelligence (AI) are enhancing propulsion systems' efficiency and reliability. These developments are crucial for the maritime industry, encompassing various sectors like international trade, shipping businesses, and defense applications, which rely on marine propulsion engines for efficient transportation of manufactured products, agricultural goods, automobiles, and other commodities while mitigating environmental impact and ensuring load capacity optimization.

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What are the Key Data Covered in this Market Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the market growth and forecasting of the market between 2024 and 2028
• Precise estimation of the size of the market size and its contribution to the parent market
• Accurate predictions about upcoming market trends and analysis and changes in consumer behavior
• Growth of the market industry across Europe, North America, APAC, South America, and Middle East and Africa
• Thorough market growth analysis of the market’s competitive landscape and detailed information about companies
• Comprehensive market analysis and report on the factors that will challenge the market research and growth of market companies

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