Industrial Engine Market Size - By Fuel Type (Diesel and Gasoline), By Operation (Two-stroke Engine, and Four-stroke Engine), By Cooling Type, By Power Range, By End Use, By Distribution Channel, Forecast 2024 – 2032

Industrial Engine Market Size

Industrial Engine Market was valued at around USD 125.1 billion in 2023 and is anticipated to grow at a 4.5% CAGR between 2024 and 2032, due to industrialization, advancements in technology, rising energy demands, and economic growth. Innovations in engine technology, such as enhancements in fuel efficiency, emissions control, and power output, are fueling market expansion. The incorporation of Internet of Things (IoT) and automation technologies into industrial engines further improves their performance and efficiency, leading to increased investment.
 

With global energy demands surging, especially in developing regions, the need for reliable power generation solutions, notably industrial engines in generators, is on the rise. Furthermore, the drive for enhanced agricultural productivity is propelling the demand for advanced agricultural machinery, often powered by industrial engines. The Food and Agriculture Organization (FAO) reports that global agricultural productivity needs to increase by 70% by 2050 to meet the growing food demand, necessitating the adoption of sophisticated engines in modern farming equipment.
 

The tightening of environmental regulations and emission standards in different regions necessitates significant changes to engine designs, which can increase compliance and adaptation costs. Varying environmental standards across countries and regions pose challenges for manufacturers in achieving global product standardization and compliance.
 

The development and integration of advanced technologies, including hybrid and electric engines or those using alternative fuels, require considerable investment in research, development, and production. This can be particularly challenging for smaller market players. Moreover, adopting new technologies often demands upgrades to existing infrastructure and supply chains, adding to the complexity and expense.
 

Industrial Engine Market Trends

In response to stricter global emission standards and environmental regulations, there is a growing need for industrial engines that are cleaner and more efficient. Moreover, with global emission standards tightening and environmental regulations becoming more stringent, the demand is shifting towards cleaner and more efficient industrial engines. The International Energy Agency (IEA) reports that global energy-related CO2 emissions must decline by 40% by 2030 to meet climate goals, underscoring the need for cleaner technologies. Notably, there's a promising avenue in developing engines that run on alternative fuels like biofuels, hydrogen, and natural gas offering both reduced emissions and enhanced environmental credentials.
 

Industrial Engine Market Analysis

Based on type, the diesel engine segment accounts for revenue of around USD 70.9 billion in 2023 and is expected to reach USD 91.3 billion by 2032. Diesel engines, known for their robustness, dependability, and high torque, excel in heavy-duty tasks and challenging conditions. They outperform gasoline engines in fuel efficiency, a key advantage for commercial and industrial applications.
 

The gas engine segment is set to register about 6.2% CAGR up to 2032. Heightened emission regulations are driving a shift towards cleaner gas engines over diesel and other fossil fuel options. This move aligns with the global push for reduced carbon footprints and cleaner energy sources, elevating the demand for natural gas engines.
 

According to the U.S. Environmental Protection Agency (EPA), natural gas engines emit up to 90% fewer pollutants compared to diesel engines. The U.S. Energy Information Administration (EIA) reports that natural gas production in the United States reached 34 trillion cubic feet in 2023, highlighting its availability. With nations diversifying their energy portfolios and reducing reliance on traditional fuels like oil and coal, gas engines are emerging as a compelling choice for both power generation and industrial applications.
 

Based on end use, the automotive segment held a significant market share of around 26% in the year 2023, due to the rising prominence of hybrid and electric vehicles (EVs). Manufacturers are now focusing on developing technologies that either supplement or entirely replace traditional internal combustion engines (ICEs). This shift is primarily driven by stringent global emission regulations, which are pushing automakers to create cleaner and more efficient engines.
 

Consequently, there's a notable surge in the adoption of advanced technologies and alternative fuels. Governments worldwide are also mandating higher fuel efficiency standards, further incentivizing the development of engines that are not only more efficient but also emit lower levels of pollutants.

The energy & power segment is expected to grow at 7% CAGR through 2032. Economic growth, especially in emerging markets, spurs heightened energy consumption. This surge is fueled by both burgeoning industrial operations and elevated living standards. According to the International Energy Agency (IEA), global energy demand is projected to increase by 4% annually through 2030, with emerging markets accounting for the majority of this growth. The quest for engines is further propelled by the imperative to bolster power generation setups, exemplified by the rising adoption of combined heat and power (CHP) plants and backup systems.

Asia Pacific: Asia Pacific dominated the industrial engine market with a significant market share of around 42% in 2023 and is predicted to grow over 5.8% during 2024 to 2032. The Asia-Pacific region is witnessing a surge in industrial activities, fueling a heightened demand for engines in sectors like manufacturing, construction, and mining. According to the Asian Development Bank, the region's industrial output is projected to grow by 5.5% annually through 2025. With rapid urbanization, the region is pushing for extensive infrastructure development, especially in power generation and transportation, further amplifying the demand for engines.

The International Energy Agency reports that Asia-Pacific's energy demand is expected to increase by 35% by 2030, necessitating significant investments in power generation infrastructure, spanning both traditional and renewable sources. The World Bank notes that the middle class in nations like China and India is expanding rapidly, with China alone expected to have 600 million middle-class citizens by 2025, significantly boosting demand for both passenger and commercial vehicles.

North America: The industrial engine market in North America was crossed at USD 31.9 billion in 2023 and is projected to reach USD 42.7 billion in 2032. North America’s rigorous emission regulations promote the use of cleaner and more efficient engines, leading to increased demand for advanced engine technologies. Government initiatives focused on reducing greenhouse gas emissions and enhancing sustainability further drive the need for engines that adhere to higher environmental standards. The shift towards engines utilizing alternative fuels such as natural gas, hydrogen, and biofuels reflects the region’s commitment to cleaner energy solutions.
 

Industrial Engine Market Share

With several key players competing for market share. Companies such as Caterpillar, Cummins Inc., Deere & Company, Detroit Diesel Corporation, and Kawasaki Heavy Industries, Ltd.  were among the prominent players in this market. They are expected to hold a market share of around 10% in 2023 in the global market. There are large number of players operating in the market. However, consumers are more inclined towards branded and high-quality products across the world.
 

Industrial Engine Market Share

Some of the key players profiled in the industrial engine industry report include:

• Caterpillar
• Cummins Inc.
• Deere & Company
• Detroit Diesel Corporation
• HDHyundai Heavy Industries Engine & Machinery
• Honda Motor Co., Inc.
• Jeemar Power Co.,Ltd 
• Kawasaki Heavy Industries, Ltd. 
• Kirloskar
• Kohler 
• KUBOTA Corporation
• MITSUBISHI
• Perkins Engines Company Limited
• Siemens Energy
• YANMAR HOLDINGS CO., LTD. 
   

Industrial Engine Industry News

• In April 2024, Cummins Inc. launched a new 15L diesel engine for the Off Highway market at Intermat 2024. This new product is displayed alongside a wide range of Cummins off-highway technologies on Booth 5a D063 at Intermat, in Paris, France April 24-27, 2024.
   
• In March 2023, Yanmar, a global leader in industrial machinery and power solutions, showcased two industrial diesel engines in the US for the first time at CONEXPO 2023, North America's largest exhibition for construction equipment and industrial machinery, March 14 to 18 in Las Vegas, NV.
   
• Cummins Inc. launched its most efficient heavy-duty diesel engine ever. As the next product in the Cummins HELM 15-litre fuel agnostic platform, the diesel X15 will be compliant with U.S. EPA and CARB 2027 aligned regulations at launch. The next generation X15 diesel engine in North America will serve the heavy-duty on-highway market.
   

This industrial engine market research report includes in-depth coverage of the industry with estimates & forecast in terms of revenue (USD Billion) and Volume (Million Units) from 2018 to 2032, for the following segments:

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Market, By Fuel Type

• Diesel
• Gas      

Market, By Operation

• Two-stroke Engine
• Four-stroke Engine

Market, By Cooling Type

• Water Cooled Engine
• Air Cooled Engine 

Market, By Power Range

• Up to 100 HP
• 100 to 500 HP
• Above 500 HP

Market, By End Use

• Oil & Gas
• Mining & Metallurgy
• Automotive & Transportation
• Agriculture
• Energy & Power
• Industrial Equipment & Machinery
• Others (Marine, Healthcare, etc.)

Market, By Distribution Channel

• Direct Sales
• Indirect Sales

The above information is provided for the following regions and countries:

• North America
  • U.S.
  • Canada
• Europe
  • Germany
  • UK
  • France
  • Italy
  • Spain
  • Russia
  • Rest of Europe
• Asia Pacific
  • China
  • Japan
  • India
  • South Korea
  • Australia
  • Rest of Asia Pacific 
• Latin America
  • Brazil
  • Mexico
  • Rest of Latin America 
• MEA
  • Saudi Arabia
  • UAE
  • South Africa
  • Rest of MEA