The global automotive engine market size is calculated at USD 143.75 billion in 2025 and is expected to reach around USD 244.28 billion by 2034, growing at a CAGR of 6.53% from 2024 to 2034.

Ottawa, April 10, 2025 (GLOBE NEWSWIRE) -- The global automotive engine market size was valued at USD 133.53 billion in 2024 and is predicted to hit around USD 244.28 billion by 2034, a study published by Towards Automotive a sister firm of Precedence Research.

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Market Overview:

The automotive engine market is a vital part of the worldwide automotive industry, covering internal combustion engines, hybrid engines, and crucial components that influence vehicle performance. As the automotive industry progresses with technological innovations, there is an increasing demand for engines that are more efficient, powerful, and eco-friendly. Manufacturers are pouring substantial resources into research and development to create engines with improved fuel efficiency, reduced emissions, and greater durability.

Technologies such as turbocharging, direct fuel injection, and variable valve timing are becoming increasingly popular in both passenger and commercial vehicles. At the same time, consumer preferences are shifting toward high performance and fuel economy, encouraging the adoption of hybrid and advanced ICEs. The market is also experiencing a rise in the incorporation of digital technologies and electronic control systems, enhancing engine management and improving vehicle performance. Although the popularity of electric vehicles is on the rise, ICEs remain prevalent in many areas, ensuring ongoing demand for both conventional and hybrid engine innovations.

Major Key Trends in the Automotive Engine Market:

• Surge in Turbocharged Engines: Manufacturers are progressively opting for turbocharged engines because of their capacity to improve fuel efficiency while ensuring power output remains robust. These engines allow for a smaller displacement without sacrificing performance, aligning with worldwide emissions standards and consumer enthusiasm for efficient vehicles.
• Electrification of Powertrains: The merging of hybrid technology with traditional combustion engines is a significant trend. Mild hybrid and plug-in hybrid engines provide better fuel economy and lower emissions, assisting automakers in transitioning to sustainable mobility while still utilizing ICE technologies.
• Use of Advanced Engine Materials: Automakers are adopting lightweight and heat-resistant materials such as aluminum alloys and composites in engine manufacturing. This shift enhances fuel efficiency and aids in reducing overall vehicle weight, which is essential for adhering to environmental regulations.
  

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Limitations & Challenges in the Automotive Engine Market:

• Strict Emission Regulations: Intensifying environmental policies and emission standards in various regions are compelling manufacturers to invest significantly in R&D. Adhering to these regulations often results in increased production costs, which can impact the profitability of traditional internal combustion engines.
• Elevated Costs of Advanced Engine Technologies: The implementation of contemporary technologies like turbocharging, hybrid systems, and emission control devices increases the overall expenditures related to engine development and manufacturing. These higher costs can pose challenges, particularly for price-sensitive markets and smaller companies.
• Increasing Shift Toward Electrification: The rapid uptake of electric vehicles presents a substantial challenge to the automotive engine market. Government incentives for EVs, progress in battery technology, and a rising consumer preference for cleaner options are progressively diminishing the demand for conventional automotive engines.
  

Exploring Market Opportunities

The automotive engine market's opportunity lies in the rising demand for hybrid and alternative fuel engines. As global concerns regarding the environment and regulatory pressures grow stronger, manufacturers are dedicating more resources to cleaner and more efficient engine technologies. Hybrid powertrains that integrate internal combustion engines with electric motors provide better fuel efficiency and lower emissions, addressing both regulatory requirements and consumer preferences. Moreover, advancements in biofuels, hydrogen combustion, and high-speed engines are unlocking avenues for market growth. This shift represents a significant chance for market participants to innovate and tap into new segments centered on sustainability and next-generation mobility solutions.

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Regional Analysis:

North America’s Dominance in the Market: What till 2030?

North America held the largest share of the automotive engine market in 2024. This is mainly due to its well-established automotive sector, advanced manufacturing capabilities, and the strong presence of major automakers such as Ford, General Motors, and Stellantis. The region’s high uptake of technologically advanced vehicles, along with an increasing demand for performance-driven and fuel-efficient engines, has sustained its position in the market.

Stringent fuel efficiency and emission regulations enforced by entities like the Environmental Protection Agency (EPA) and the California Air Resources Board (CARB) are compelling manufacturers to innovate and advance engine technologies. With a mature automotive aftermarket and consumer preferences leaning toward powerful vehicles, North America remains a crucial center in shaping the global automotive engine market.

Leading North American Countries Involved in Automotive Engine Production

• United States: The U.S. takes the lead in the North American market due to its extensive automotive manufacturing base, strong research and development ecosystem, and the presence of major players like Ford, GM, and Tesla. The country's commitment to fuel efficiency and engine innovation promotes ongoing advancements in engine technologies.
• Canada: Canada is significant player with its strong vehicle production capabilities, particularly in Ontario, and close trade relations with the U.S. The nation enjoys investments in hybrid and electric vehicle engine components, backed by governmental incentives supporting cleaner transportation technologies.

Asia Pacific: The Fastest-Growing Region

Asia Pacific is expected to experience the fastest growth in the market during the forecast period. This swift growth is mainly driven by the region’s burgeoning automotive industry, increasing consumer vehicle demand, and rising disposable incomes. Countries such as China, India, Japan, and South Korea are experiencing a significant rise in vehicle production and sales, which directly enhances the demand for advanced and efficient engine technologies.

Major Factors for the Market’s Expansion in Asia Pacific:

• Asia Pacific encompasses some of the top countries for automotive production, including China, India, and Japan. The rise in production of passenger and commercial vehicles to satisfy both domestic and export demand has significantly increased the need for advanced automotive engines.
• The rapid pace of urbanization and the expanding middle class have enhanced consumers' purchasing power throughout the Asia Pacific region. This shift has resulted in elevated automobile ownership rates, especially in developing nations, subsequently driving the demand for efficient and dependable engines.
• The region also hosts numerous global automotive leaders and engine manufacturers that continuously invest in research, development, and manufacturing capabilities.
• The growing emphasis on fuel efficiency and adherence to evolving emission standards is also encouraging automakers in the region to create more advanced, lightweight, and environmentally friendly engines.

Segment Outlook

Placement Type Insights

The in-line engine segment dominated the market with the largest share in 2024. This is mainly due to the simple design, cost efficiency, and easy manufacturing and maintenance processes of in-line engines. These engines are commonly utilized in passenger cars and light commercial vehicles because of their compact dimensions and smooth operation at lower speeds. Automakers prefer in-line configurations because they consist of fewer components and provide enhanced fuel efficiency relative to other engine types. Their even power delivery, reduced vibration levels, and compatibility with front-wheel drive systems further increase their widespread use across numerous vehicle categories.

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The V-type engines segment is projected to grow at a significant CAGR during the forecast period due to the rising demand for high-performance and luxury automobiles. V-type engines, marked by their “V” shaped cylinder arrangement, offer improved power-to-weight ratios and superior balance, making them well suited for sports cars and performance-focused models. Car manufacturers are increasingly incorporating V-type engines to cater to consumer desires for speed, power, and advanced driving experiences. Additionally, their capacity to provide high torque and enhanced performance in a compact engine bay is driving their increased integration in contemporary vehicles, particularly in the premium and high-performance vehicle categories.

Fuel Type Insights

The gasoline segment dominated the automotive engine market in 2024, primarily due to their widespread availability, affordability, and established infrastructure. Gasoline engines are favored for their smooth operation, quieter performance, and lower emissions when compared to diesel engines. They are commonly utilized in passenger vehicles, especially compact and mid-sized models, where fuel efficiency and reduced noise levels are highly prioritized. Across both developed and developing markets, gasoline engines continue to be the preferred option for consumers due to their lower initial costs and simpler maintenance requirements. The growing adoption of hybrid gasoline-electric engines is also contributing to the ongoing leadership of this segment.

The diesel segment is expected to grow at the fastest rate during the projection period. The segment growth can be attributed to the increasing demand for commercial vehicles, heavy-duty trucks, and SUVs. Diesel power engines are recognized for their superior fuel efficiency, increased torque, and extended operational lifespan, making them well-suited for long-distance travel and heavy-load applications. Moreover, advancements in diesel engine technology, including cleaner emissions and turbocharging capabilities, have enhanced their appeal in both on-road and off-road vehicles. Emerging markets, where cost-effectiveness and fuel economy are vital considerations, are further propelling the expansion of the diesel engine segment despite global trends shifting toward cleaner alternatives.

Recent Development

• In December 2024, Honda and Nissan merged to become the third-largest automobile sellers in the world. This strategic decision underscores a transformation in the automotive engine industry as manufacturers adapt to the decline of fossil fuels, concentrating on hybrid, electric, and advanced engine technologies to fulfill changing consumer preferences and regulatory demands.
  

Browse More Insights of Towards Automotive:

• Automotive Acoustic Engineering Services Market: https://www.towardsautomotive.com/insights/automotive-acoustic-engineering-services-market-sizing
• Automotive Engine Components Market: https://www.towardsautomotive.com/insights/automotive-engine-components-market-sizing
• Gas Engines Market: https://www.towardsautomotive.com/insights/gas-engines-market-sizing
• Heavy Duty Engine Market: https://www.towardsautomotive.com/insights/heavy-duty-engine-market-sizing
• Automotive Engine Cooling Systems Market: https://www.towardsautomotive.com/insights/automotive-engine-cooling-systems-market-sizing
• Jet Engines Market: https://www.towardsautomotive.com/insights/jet-engines-market-sizing
• Diesel Power Engine Market: https://www.towardsautomotive.com/insights/diesel-power-engine-market-sizing
• Small Marine Engine Market: https://www.towardsautomotive.com/insights/small-marine-engine-market-sizing
• High-speed Engine Market: https://www.towardsautomotive.com/insights/high-speed-engine-market-sizing
• Turboprop Engine Market: https://www.towardsautomotive.com/insights/turboprop-engine-market-sizing

Segments Covered in the Report

By Placement Type

• In-line Engine
• V-type Engine
• W Engine
  
  

By Fuel Type

• Gasoline
• Diesel
• Other Fuel
• By Vehicle Type
• Passengers Car
• Commercial Vehicle

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