Internal Combustion Engine Market Size 2024-2028

The internal combustion engine market is estimated to increase by USD 28.3 billion, growing at a CAGR of 8.09% between 2023 and 2028. In today's world, there is a growing demand to enhance vehicle performance in response to increasing traffic congestion and the need for greater fuel efficiency. With the expanding vehicle population, there is also a high growth volume for the premium vehicle segment, as consumers seek out vehicles that offer superior driving experiences. To meet these demands, automotive companies are investing heavily in research and development to produce vehicles with advanced technologies, such as hybrid and electric engines, lightweight materials, and improved aerodynamics. These innovations not only boost performance but also contribute to reducing emissions and improving fuel economy. The future of the automotive industry lies in creating vehicles that offer superior performance, sustainability, and comfort, making the driving experience more enjoyable and efficient for consumers.

What will be the Size of the Market During the Forecast Period?

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Market Customer Landscape

The 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 report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.

Global Market Customer Landscape

Market Dynamics

The market continues to navigate challenges and opportunities amidst evolving energy landscapes and emission regulations. While passenger vehicles traditionally relied on ICEs, advancements in electric powertrains and EV infrastructure are reshaping the automotive sector. Industries such as shale gas production and industrial engines drive demand for versatile flex-fuel engines and efficient natural gas engines, while innovations like hydrogen-fueled combustion engines and low-temperature combustion (LTC) aim to reduce CO2 emissions and comply with stringent emission norms. Despite fluctuations in crude oil prices, ICEs persist in addressing transportation needs, albeit concerns over noise pollution and environmental impact. The future of the ICE market hinges on technological adaptation and regulatory compliance within the dynamic energy and power industry landscape. The automotive industry is exploring the potential of both Flex-fuel engine and hydrogen-fueled combustion engine to diversify fuel options and reduce environmental impact. Our researchers analyzed the data with 2023 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 

The growing demand to improve vehicle performance is the key factor driving the global market growth.  Flat automotive engines still have applications in industries such as aerospace, in addition to the internal combustion engine (ICE) market. The advantages inherent in the boxer engine design are driving the growth of the market. A key design feature of the boxer engine is its low center of gravity (COG) due to its horizontal placement within the vehicle or motorcycle compared to other traditional engine designs such as in-line or V-shaped.

Additionally, the low profile of the flat engine brings the engine orientation closer to the vehicle's powertrain orientation, resulting in smoother and better gearing. In addition, this engine design contributes to the superior performance of the vehicle while producing less unburned fuel for better fuel economy. Therefore, from an OEM perspective, such factors are expected to drive the growth of the market during the forecast period. 

Significant Market Trends

The growing development in engine technologies will fuel the global market growth. The demand for improved fuel efficiency and performance in the automotive industry has led to the constant development of new internal combustion engines with more demanding performance. Some of these engines are hybrid engines and VDE. Hybrid engines are more common than VDE in the automotive industry. However, VDE is expected to grow in popularity during the forecast period as hybrid engines are fuel efficient only in heavy traffic and do not affect highway fuel economy. Additionally, hybrid engines are more expensive and less reliable due to the addition of various electrical components to the powertrain.

Companies are pursuing inorganic growth strategies that are expected to lead to the development of engine technology. A key concept in the development of VDE is that the vehicle requires less power at constant speed than at high speed. Based on this, the VDE deactivates half of the engine's cylinders at low loads and reactivates them when more power is needed. VDE has been on the market since 2004. Hence, it is expected to boost the demand for internal combustion engines and is expected to drive the growth of the internal combustion engine (ICE) market during the forecast period. 

Major Market Challenge

The imposition of stringent emission and fuel economy standards can majorly impede the growth of the market. Rising amounts of greenhouse gases around the world and declining supplies of conventional fuels are forcing national legislatures to introduce emissions and fuel consumption standards. Vehicle emissions contribute to environmental air pollution. According to a study conducted at the Massachusetts Institute of Technology, harmful vehicle emissions cause approximately 53,000 premature deaths in the United States each year. According to the US EPA, vehicles are responsible for 56% of the country's carbon monoxide emissions. Governments around the world have strict regulations governing fuel emissions and consumption, and OEMs must comply with these requirements.

OEMs have attempted to build improved and more efficient engine management systems to meet these standards. EMS monitors the proper functioning of the engine by controlling fuel injection to ensure proper combustion. This reduces fuel consumption and reduces emissions. Leading OEMs are involved in the research and development of advanced engine management systems, allowing vehicles to operate with minimal fuel consumption and emissions. Consumers now tend to buy environmentally friendly vehicles that consume less fuel. Such factors are expected to hinder the growth of the market during the forecast period.  

Who are the Major Market Companies?

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 XC 60 twin-engine internal combustion engine which produces quick torque for acceleration pick-up. It also manufactures, develops, and sells trucks.

Caterpillar Inc: The company offers C0.5 industrial diesel engines which are used for different types of small and off-road applications.

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

• Cummins Inc.
• DEUTZ AU
• Hyundai Motor Co.
• Mahindra and Mahindra Ltd.
• Mercedes Benz Group AG
• Mitsubishi Heavy Industries Ltd.
• Navistar International Corp.
• Renault SAS
• Robert Bosch GmbH
• Rolls Royce Holdings Plc
• Shanghai Diesel Engine Co. Ltd.
• Toyota Industries Corp.
• Volkswagen AG
• Wacker Neuson SE
• Wartsila Corp.
• Yamaha Motor Co. Ltd.
• Yanmar Holdings Co. Ltd.
• Siemens AG

The report offers clients a deeper understanding of the market and its players through a combined qualitative and quantitative analysis of the companies. The market growth analysis classifies companies into categories based on their business approach, including pure-play, category-focused, industry-focused, and diversified. companies are specially categorized into dominant, leading, strong, tentative, and weak to understand the dos and don’ts of business which in turn can help a client make the best decision

Market Segmentation

By End-user 

The automotive segment will contribute a major share of the market, due to increasing demand for vehicles, investments by various automakers, and increasing advancements in engine technology. The automotive engine segment is expected to witness steady growth during the forecast period as the automotive industry increasingly requires continuous innovation in products and manufacturing processes. Therefore, the automobile engine will continue to play an important role as a component of the vehicle. Industry innovations and advancements are increasing the need for advanced automotive engines, driving the market during the forecast period. 

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The automotive segment showed a gradual increase in market share with USD 29.20 billion in 2018. The automotive industry is experiencing booms in several regions. APAC is the fastest-growing automotive market in terms of production and consumption. Therefore, improvements in existing manufacturing facilities and the rapid addition of manufacturing facilities in APAC will have a positive impact on the market during the forecast period. Moreover, the Indian auto sector is now aiming to increase auto exports by five times from 2016 to 2026. Total vehicle exports from India in 2022 were 5,617,246 units. APAC's high growth rate presents a tremendous opportunity for automotive companies. India and China are expected to remain the major target markets for automotive companies during the forecast period due to the increasing consumption of automobiles by the domestic populations of these countries. Such factors are anticipated to drive the automotive segment growth during the forecast period.  

By Type 

Gasoline engines are more fuel efficient than petrol engines. However, they emit particulate matter and nitrogen oxide compounds (NOx). The uneven growth in gasoline engines is due to irregular sales growth in commercial vehicles and narrowing price differentials between gasoline and oil. Gasoline engine components have to withstand higher pressures than gasoline engines due to their different operating cycles. Because gasoline burns at a very low temperature, it produces more exhaust emissions than gasoline engines. Therefore, the gasoline engine segment is expected to grow moderately over the forecast period. Most modern petrol engines offered by OEMs are turbocharged. Stringent emission standards are forcing OEMs to produce more fuel-efficient vehicles, increasing demand for turbocharged gasoline applications worldwide. For example, new US fuel efficiency standards require that by 2025 vehicles must travel an average of 54.5 miles per gallon. Such criteria are expected to help boost sales of gasoline vehicles significantly during the forecast period.

By Region

APAC is estimated to contribute 41% to the growth by 2028. Technavio’s analysts have elaborately explained the regional market growth and trends that are expected to shape the market during the forecast period.  

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In terms of production volume, China and India hold the largest share of the APAC auto engine market due to the presence of large automobile manufacturing bases. Due to lower component prices and the availability of more stable and advanced systems during the forecast period, low-cost manufacturers are expected to enter the market in the Asia-Pacific region, especially China. Factors such as rising living standards and increasing disposable income have increased the demand for automobiles in the region. This will prompt for increased vehicle production in the region. The above factors will lead to increased demand for automotive engines as well as boost the growth of the internal combustion engine (ICE) market in the APAC region during the forecast period. 

Segment Overview

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

• End-user Outlook
  • Automotive
  • Aircraft
  • Marine

• Type Outlook 
  • Petroleum
  • Natural gas

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

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Market Analyst Overview

The market remains pivotal in the global automotive and industrial sectors despite advancements in hybrid vehicle technologies and the push towards electrification of vehicles like EVs. With significant contributions from IC engine manufacturers and OEMs, ICEs powered by fossil fuel reserves and natural gas continue to dominate fleets, balancing maintenance costs and greenhouse gas emissions against evolving environmental compliances and regulatory presence. Innovations such as flex-fuel engines, duct fuel injection, and hydrogen-fueled combustion engines are addressing concerns over nitrogen oxides (NOx) and particulate matter (PM) emissions, supported by government funding and incentives promoting cleaner fuels and fuel cell technology. In regions like the Asia Pacific, growth in the commercial aviation and petroleum segments underscores the market's resilience amid ongoing technology advancements and consumer disposable income impacts on EV adoption and automotive preferences.

The Indian government is actively promoting environment compliances and alternative fuels in response to global trends and regional needs, influencing sectors such as the petroleum segment, natural gas segment, and commercial aviation industry in the Asia Pacific region. Innovations like flex-fuel engines and hydrogen-fueled combustion engines are addressing vehicle requirements and carbon neutrality goals, with OEMs integrating artificial intelligence and machine learning into heavy-duty trucking powertrains and gas-based engines. Technologies such as duct fuel injection and X15N engines enhance internal combustion engines (ICEs), while electronic motors and Infinity VC-T advance electric vehicles (EVs) and hydrogen-based ICEs. These developments align with RDE norms and underscore the industry's commitment to sustainable transportation solutions like the Mini.

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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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