Automotive Engine Market Size & Outlook, 2025-2033

Automotive Engine Market Size

The global  automotive engine market size was valued at USD 101.69 billion in 2024 and is projected to grow from USD 104.46 billion in 2025 to reach USD 129.47 billion by 2033, growing at a CAGR of 2.72% during the forecast period (2025-2033).

Automobile engines are created with real-world vehicle operation requirements, enhancing engine cycle processes and torque curve shape. In addition, it seeks to minimize parasitic losses and fuel consumption. The drivetrain design focuses on increasing drivetrain efficiency, decreasing resistance forces, and choosing transmission ratios that are compatible with the engine. New engine technologies such as Variable Displacement Engines (VDEs), hydrogen, and hybrids are driving the expansion of the automobile engineering industry. VDE and hybrid engines provide excellent performance and fuel economy. The market for automotive engines is expected to expand due to the increasing demand for luxury vehicles and powerful engines in racing.

Numerous companies are currently evaluating the emission levels of their reduced compact vehicles. The demand for better engine performance and fuel efficiency to meet government regulations has led to the development of pollution-free engines. In developing nations, the demand for passenger vehicles has increased due to automobile manufacturers' competitive pricing.

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Automotive Engine Market Growth Factor

Enhanced Engine Performance and Fuel Economy

The increased need for improved engine performance and greater fuel efficiency to meet governmental regulations to reduce vehicle emissions has led to the development of pollution-free engines. These laws attempt to reduce the number of harmful pollutants produced by vehicles. Variable displacement engines (VDEs), also known as hybrid engines, are featured in some of these cars. In addition, ongoing initiatives to replace engines in existing vehicle fleets are a primary driver of growth in the worldwide automotive engine market. The increased demand for passenger cars in developing nations is partly due to automakers' low prices for their goods.

Higher Production of Cars

The number of automobiles that are manufactured has a direct bearing on the demand for automobile engines. As a result, rising industry demand is driven by increased sales of passenger and commercial vehicles and emerging economies. The market is growing due to several factors, such as stringent regulations for fuel efficiency and increased demand for engines with advanced technology for better vehicle performance. Customers' demand for high-performance and fuel-efficient cars, along with extensive innovations and prototypes from significant automakers and OEMs, are all factors in the market's growth.

Market Restraint

Increasing Demand for Electric Vehicles

Significant financial investments in research and development are necessary to create new technologies. Research and development (R&D) involves testing and retesting various technological components at various levels. As a result, the significant time commitment required by the substantial investments in developing an entirely new class of engines slows market growth. The increasing demand for electric automobiles and the extensive research and development expenses associated with creating new technology will undoubtedly hinder the sector's growth. There will undoubtedly be obstacles in the way of the growth of the electric car business if significant amounts of money are spent on research and development when developing new technology.

Market Opportunities

Manufacturers Concentrate on Cutting-Edge Technologies

It is anticipated that the value of the automotive engine market will increase significantly during the forecast period. This is because manufacturers are concentrating on developing cutting-edge technologies, such as engine control unit replacement, on increasing the average vehicle's lifespan and engine's lifecycle. It is anticipated that market participants will have opportunities to make a profit throughout the time in question due to the growing demand for automobiles that consume less fuel and weigh less.

Regional Analysis

North America accounted for the largest revenue share in the global automotive engine market. North America is home to advanced economies like the United States and Canada. In North America, the demand for commercial vehicles is predicted to be driven by rising infrastructure investments, technological advancements in propulsion, and the continued growth of regional to global supply chain networks.

Asia-Pacific is projected to increase at a CAGR of 3.34% during the projection period. Market expansion will be driven by the development of the automotive industry in emerging markets such as China and India. The Made in India campaign is anticipated to attract significant automotive industry investments, as India offers numerous advantages, such as inexpensive raw materials and labor. Moreover, countries like China and India have extensive logistics networks and supply chains and are among the world's fastest-growing economies.

Placement Type Insights

The in-line sector has the largest market share and is the most prevalent engine type for passenger cars. These engines can be found in various vehicles, from family hatchbacks to high-end sedans like BMW and Mercedes, because of their straightforward, low-cost production and simple installation. Therefore, it is a recommended option for OEM. The W-engine segment is anticipated to grow at a CAGR of 3.35% during the forecast period. A W-engine can link three or four cylinders to one or two crankshafts. W-engines are used in heavy-duty trucks and premium automobiles because they use less room and provide more power. V-shaped engines are the most common in high-performance automobiles. Almost all manufacturers of high-performance automobiles, including Ferrari, Alfa Romeo, and Mercedes-Benz, opt for the V-engine arrangement.

Fuel Type Insights

Gasoline has the most dominant market share due to the advantages of gasoline engines, such as less noise and vibration and cheap fuel prices. Due to their efficiency, cost-effectiveness, and lightweight advantages, gasoline engines are most typically seen in passenger vehicles. Thus, these are the primary growth drivers for gasoline engine usage. Diesel engines are utilized in various vehicles and equipment, including medium-duty trucks, international cruise ships, and power generators. Diesel engines are favored for their excellent fuel efficiency, resulting in low operating costs and dependability. Diesel engines run significantly slower Revolutions Per Minute (RPM), resulting in minor wear and tear and longer engine life. These technical benefits have made diesel engines the favored option for manufacturers, fueling the segment's growth.

Vehicle Type Insights

Passenger cars held the largest market share in the vehicle type segment. As vehicle ownership rises across the globe, original equipment manufacturers (OEMs) are producing a variety of engines for various passenger car sectors. Multi-fuel engines, Variable Valve Technology (VVT), turbocharger technology, and Common Rail Direct Injection (CRDI) are examples of technological advances in automotive engines that provide the high horsepower and torque required for luxury vehicles. OEMs are developing lightweight engines that are also capable of providing high output. The expansion of commercial vehicles is attributable to the increased demand for vehicles in the logistics industry. Logistics is one of the most critical sectors for transporting products. Significant increases in the utilization of trucks and trailers to transport goods have been observed. Due to changing lifestyles and urbanization, people are increasingly likely to have items and products delivered to them.

List of key players in Automotive Engine Market

1. General Motors
2. Ford Motor Company
3. Volkswagen Group
4. AB Volvo
5. Cummins Inc.
6. Honda
7. Hyundai Motor Company
8. Fiat S.PA.
9. Mitsubishi Heavy Industries
10. Scania AB
11. Mercedes-Benz
12. Renault Group.

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Recent Developments

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