Automotive Engine Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Automotive Engine Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The automotive engine market was valued at over USD 350 billion in 2020, and it is expected to reach over USD 460 billion by 2026, registering a CAGR of more than 4% during the forecast period (2021 - 2026).

The COVID-19 pandemic had a swift and negative impact on the globally integrated automotive industry. Automobile engine and component manufacturing plants are being shuttered, and consumer footfalls in showrooms have fallen sharply because of lockdowns and travel restrictions across the world.

However, the automotive engine market is expected to witness significant growth during the forecast period, as manufacturers are focusing on new technologies like the replacement of engine control units to increase the average life of vehicles, thereby, improving the lifecycle of engines. The growing demand for fuel-efficient and lightweight vehicles is likely to create lucrative opportunities for players in the market during the forecast period.

Factors, such as rigid fuel economy, regulatory norms, and growing demand for technologically advanced powered engines for the better performance of vehicles, are expected to augment the demand in the market. Recently the automobile giant Audi developed a TFSI 4-cylinder engine which the company claims to be the most efficient 2-liter gasoline engine on par. Such technological developments will certainly boost the market growth, which will pave the way for better fuel-efficient vehicles.

The Asia-Pacific region is anticipated to continue as a major market for automotive engines throughout the forecasted period. It is anticipated that about 40% of the hybrid and electric vehicles sales reported by the year 2025 in the Asia-pacific region. North America and Asia-Pacific both regions dominate the global automotive engine market as several environmental norms being employed in both North America, Europe, and Asia-Pacific.

Key Market TrendsIncreasing Investment in Building Better Emission Control Equipment

A key factor driving the growth of the automotive engine market is the development of new engine technologies such as variable displacement engines (VDEs) and hybrids. Automotive manufacturers are developing new types of engines, such as hybrid engines and variable displacement engines (VDEs), which deliver high performance and fuel efficiency.

Although hybrid engines are the most widely used engine in the automotive industry, the demand for VDEs is expected to increase considerably during the forecast period. This is because hybrid engines are expensive, and the presence of various electrical components in their powertrain makes them less reliable. Moreover, hybrid engines are fuel-efficient in heavy traffic conditions only.

Car manufacturers try to stay ahead of the competition by building the most compact engines that are lightweight, have greater power output, and higher fuel economy. OEMs downsize vehicle engines to decrease the overall curb weight of the vehicle and reduce emissions.

Most of the OEMs have downsized vehicle engines for complying with the real-world emission testing standards as well as the emission standards. Companies such as Volkswagen, Renault, and General Motors plan to eliminate certain compact passenger models from their product portfolio in 2019 to maintain a fleet that complies with the latest emissions and testing procedures. Many companies are in the process of evaluating the levels of emissions produced by their downsized compact vehicles.

The Asia-Pacific Region is Expected to Lead the Market

The Asia-Pacific region is expected to dominate the automotive engine market, followed by Europe and North America during the forecast period. The developments in the field of engine technology are increasing significantly, along with the rising emission norms across the globe. A large amount of OEMs profit is likely to come from developing economies like India and China.

The Asia-Pacific region is likely to attract major players in the market, as customers' preference toward electric vehicles is increasing significantly. However, as switching to electric mobility is associated with high cost, electrification of vehicles and adoption of electric vehicles at the local level will continue to maintain the relevance of IC engines. A large number of electric vehicles are hybrid electric vehicles; IC engines will be produced until the electric car market see full electrification of vehicles.

Europe and North America are expected to be active regions in the market after Asia-Pacific, due to the presence of long-established original equipment manufacturers, which provide a strong base for the robust development and growth of the automotive engine market in the region.

OEMs have been focusing on developing technologically advanced powered engines to gain high torque and performance. The emergence of multi-fuel engine technology is expected to provide lucrative opportunities to the active market players in the automotive engine market. For example, the Volvo multi-fuel car has a 2.0-liter engine that runs on five different fuels, namely, hythane, methane, bioethane, CNG, and petrol.

Competitive Landscape

The automotive engine market is fairly fragmented due to the presence of numerous players in the market. The companies are launching more technologically advanced products in the market to gain a competitive edge over other players. For instance:

• In January 2019, Cummins Inc. launched its next-generation 6.7L turbo diesel engine, with a first-in-class 1,000 pound-feet of torque. It also has a higher horsepower output, taking the 2500 and 3500 heavy-duty RAM pickup trucks to the next level of performance.
• In May 2019, MAN Energy Solutions added variable turbine area (VTA) technology to its TCA turbochargers for the MAN 51/60 engine type. VTA has nozzle rings with adjustable vanes that adjust the airflow amount with injected fuel at different loads. This makes the engine more responsive and fuel-efficient.
• Audi has developed the first turbocharged direct-injection engine TFSI 4-cylinder engine, which is claimed to be the most efficient 2-liter engine. This engine has improved responsiveness, and active noise control and engine mounts suppress vibrations and noise.

Some of the key players in the market include Cummins Inc., Toyota Motor Corporation, Fiat Automobiles SpA, Volkswagen AG, MAN Energy Solutions, and General Motors.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

Companies Mentioned

IBM Corporation
Oracle Corporation
Internap Corporation
Packet Inc. (An Equinix Inc. Company)
Scaleway Inc.
Amazon Web Services Inc
Rackspace Inc.
CenturyLink, Inc.
LightEdge Solutions, Inc

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