The global automotive engine market was valued at USD 94.8 billion in 2021 and is projected to grow at a compound annual growth rate (CAGR) of 2.5% from 2022 to 2030. Market demand closely aligns with automotive production levels. As such, rising sales of passenger and commercial vehicles, particularly in emerging economies, are fueling market expansion. Additionally, stringent fuel efficiency regulations and increasing demand for advanced engines that enhance vehicle performance are contributing to growth. Consumers are showing a strong preference for high-performance, fuel-efficient vehicles, and significant innovations and prototypes from major automakers and OEMs are further driving the market.

The COVID-19 pandemic disrupted numerous industries in 2020, with lingering effects expected to impact the market throughout the forecast period. Temporary shutdowns at manufacturing facilities and widespread supply chain disruptions caused by global lockdowns significantly affected automotive production. This led to delays in shipments and declining production volumes, which negatively influenced overall engine output. Consequently, reduced sales of both passenger and commercial vehicles had a notable effect on the engine market.

During the pandemic, production capacities were curtailed, and semiconductor shortages hindered the manufacturing of automotive engines and other components. However, the post-pandemic period saw a resurgence in automotive demand. Manufacturers have since turned to innovations such as engine control unit (ECU) upgrades to extend vehicle lifespan and enhance engine performance, thereby boosting demand for automotive engines.

Placement Type Insights

In 2021, the in-line engine segment dominated the market with a share of 45.04%. In-line engines are widely used in passenger vehicles, from compact hatchbacks to luxury sedans like those produced by BMW and Mercedes. Their straightforward and cost-effective manufacturing process, combined with ease of installation, makes them a preferred option for OEMs.

Fuel Type Insights

Gasoline engines held the largest market share in 2021, accounting for over 35%. This is due to their lower noise and vibration levels, as well as the relatively low cost of gasoline. These engines are commonly found in passenger vehicles thanks to their efficiency, affordability, lightweight design, and high acceleration capabilities, making them a popular choice.

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Vehicle Type Insights

Passenger cars represented more than 65% of the market share in 2021. With global vehicle ownership on the rise, OEMs are developing various engines tailored to different passenger car segments. Innovations such as multi-fuel engines, Variable Valve Timing (VVT), turbocharging, and Common Rail Direct Injection (CRDI) technologies are delivering the high power and torque needed for luxury vehicles. The demand for lightweight, high-performance engines and increasing sales of passenger cars continue to drive growth in this segment.

Regional Insights

North America accounted for over 30% of global revenue in 2021. The presence of well-established OEMs and a strong manufacturing base have played a key role in the region’s growth. Investments in infrastructure, advancements in drive technology, and the shift from local to global supply chains are expected to further drive demand for commercial vehicles in North America.

Asia Pacific is projected to grow at a CAGR of 3.2% during the forecast period. Rapid development in the automotive sector in countries like China and India is expected to propel market growth. Initiatives such as India’s "Make In India" campaign are attracting investment into the automotive industry, supported by advantages like affordable raw materials and labor. Additionally, robust logistics and supply chain networks, along with rapid economic growth, position China and India as key markets for automotive engine demand.

Key Players in the Global Automotive Engine Market:

  • AB Volvo

  • Cummins Inc.

  • Fiat Automobiles S.p.A

  • Volkswagen AG

  • Ford Motor Company

  • Mitsubishi Heavy Industries, Ltd.

  • General Motors

  • Honda Motor Co., Ltd.

  • Mercedes-Benz

  • Renault Group

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