MEA ICE (Internal Combustion Engine) Market Outlook to 2028

MEA ICE (Internal Combustion Engine) Market Overview

The MEA ICE Market is currently valued at USD 18.6 billion, driven by high demand from the transportation, logistics, and industrial sectors. The market's expansion can be attributed to a growing need for heavy-duty and commercial vehicles across the region, particularly in construction, mining, and agriculture. Countries in the Middle East are also investing in infrastructure projects, which is expected to further push demand for ICE engines.

The market is dominated by countries such as Saudi Arabia and the UAE due to their significant investments in infrastructure development, automotive industries, and logistics. Additionally, Egypt and South Africa are emerging as key players in the region, owing to their automotive manufacturing capabilities and increasing domestic demand for passenger and commercial vehicles.

Governments in the MEA region are increasingly implementing stringent fuel economy standards to reduce carbon emissions from ICE vehicles. Instead, the existing Corporate Average Fuel Economy (CAFE) standards set targets for light-duty vehicles that range from 15.7 to 21.0 km/L for 2024. These regulatory changes directly affect the ICE market by pushing manufacturers to produce more fuel-efficient vehicles.

MEA ICE (Internal Combustion Engine) Market Segmentation

By Vehicle Type: The MEA ICE market is segmented by vehicle type into passenger cars, commercial vehicles, and heavy-duty vehicles. Recently, commercial vehicles have had a dominant market share under this segmentation. This is primarily due to the growing demand for transportation services, driven by the logistics and e-commerce boom across the Middle East and Africa. Furthermore, the expansion of infrastructure and the increasing demand for heavy-load carrying capacity in industries such as construction and mining have further solidified the importance of commercial vehicles in this market.

By Fuel Type: The market is segmented by fuel type into gasoline, diesel, and hybrid. Diesel engines continue to dominate the market under this segment, owing to their high torque, durability, and efficiency in commercial and heavy-duty applications. The preference for diesel-powered vehicles in sectors like agriculture, logistics, and construction, where fuel efficiency and cost-effectiveness are critical, has ensured the continued dominance of diesel engines. In contrast, gasoline engines have been more popular in passenger cars due to their affordability and lower emissions.

MEA ICE (Internal Combustion Engine) Market Competitive Landscape

The competitive landscape in the MEA ICE market is characterized by the strong presence of global automotive giants such as Cummins Inc., Ford Motor Company, and Toyota Motor Corporation. These companies have established strong supply chains, extensive aftermarket services, and research and development facilities to maintain their competitive edge. Additionally, local partnerships and collaborations play a significant role in expanding their presence in the MEA market.

MEA ICE (Internal Combustion Engine) Industry Analysis

Growth Drivers

Automotive Production and Demand (By Country, Vehicle Type): The automotive industry across the Middle East and Africa (MEA) region, particularly in countries like South Africa, Egypt, and the UAE, has witnessed robust demand for internal combustion engine (ICE) vehicles. In 2023, Morocco produced approximately 582,000 vehicles, surpassing South Africa's production of about 591,000 vehicles. The UAE also saw a steady demand for light-duty vehicles, while heavy-duty trucks and commercial vehicles remained crucial in Egypts transportation sector.

Rising Demand for Heavy-Duty and Commercial Vehicles: The demand for heavy-duty and commercial vehicles in the MEA region has risen, primarily driven by the transportation, construction, and mining industries. In 2023, South Africa and Saudi Arabia saw increased registrations of commercial vehicles. This surge in demand is attributed to large-scale construction projects, increased road transport, and the growing mining sector across the region, all of which rely heavily on ICE-powered machinery.

Growth of Transportation and Logistics Sector: The transportation and logistics sector in the MEA region, particularly in Saudi Arabia and Egypt, is growing due to expanding e-commerce and regional trade. This growth heavily relies on ICE-powered vehicles, such as trucks and commercial vehicles, to transport goods across long distances. In Egypt, rising road freight demand has driven increased use of heavy-duty trucks, further supporting ICE vehicle demand in logistics operations.

Market Challenges

Regulatory Stringencies on Emissions (Euro Emission Standards, Regional Regulations): Countries in the MEA region have been tightening emission regulations, impacting the ICE market. South Africa has adopted stricter emission standards, aligning with global regulations like Euro 6, which limit emissions from new ICE vehicles. Similarly, the UAE has introduced new rules to control emissions from diesel vehicles. These regulatory measures increase manufacturing compliance costs, potentially reducing demand for ICE vehicles, especially in the heavy-duty segment.

Shift Toward Electric Mobility (Impact on Demand): The growing shift toward electric vehicles (EVs) in the MEA region is gradually impacting the ICE market. Countries like the UAE and Saudi Arabia are heavily investing in EV infrastructure, promoting a move away from traditional ICE vehicles. Government incentives and infrastructure expansions for EVs are reducing ICE vehicle demand, particularly for passenger vehicles in urban areas. However, ICE vehicles still dominate the commercial and heavy-duty sectors.

MEA ICE (Internal Combustion Engine) Market Future Outlook

Over the next five years, the MEA ICE market is expected to show moderate growth, driven by continuous demand for commercial and industrial applications, despite increasing shifts toward electrification in the passenger vehicle segment. The sustained demand in sectors such as agriculture, logistics, and mining is expected to be a key growth driver. Hybrid technologies may also gain traction as the region looks to balance fuel efficiency with regulatory compliance regarding emissions.

Market Opportunities

Potential in Off-Highway Vehicle Market (Agriculture, Mining): Off-highway vehicles used in agriculture and mining offer a significant opportunity for ICE market growth in the MEA region. These sectors rely heavily on ICE-powered machinery like excavators, dump trucks, tractors, and harvesters due to their off-road capabilities and power requirements. Agriculture and mining in countries like Egypt and Nigeria continue to depend on ICE vehicles, making these industries crucial for sustaining ICE demand in the region.

Hybrid and Alternative Fuel ICE Engines (Biofuel, LPG, CNG): The growing focus on hybrid and alternative fuel ICE engines, such as those powered by biofuels, LPG, and CNG, presents new opportunities in the MEA region. Countries are promoting cleaner alternatives, integrating hybrid engines that combine traditional ICE power with electric propulsion. This trend is particularly important in areas with less-developed EV infrastructure, where hybrid and alternative fuel ICE engines serve as a viable solution for reducing emissions while maintaining engine performance.
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