Global Automotive Engine Market 2025-2035

Automotive Engine Market Size, Share & Trends Analysis Report by Placement Type (In-line, V-type, W-type, Boxer / Flat, and Opposed-piston), by Fuel Type (Gasoline, Diesel, Natural Gas / CNG, Hybrid-ICE (Mild, Full, Plug-in), Alternative Fuels (Ethanol, LPG, e-Fuels), and Hydrogen ICE), by Vehicle Type (Passenger Cars, Light Commercial Vehicles, Medium and Heavy Commercial Vehicles, Two-Wheelers and Powersports, and Off-road / Agricultural / Construction), and by Engine Capacity (1 Below 1.5 L, 1.5 to 3 L, and Over 3 L), Forecast Period (2026-2035)

Industry Overview

Automotive engine market was valued at $128.3 billion in 2025 and is projected to reach $177.5 billion by 2035, growing at a CAGR of 3.3% during the forecast period (2026-2035). The automotive engine market is driving owing to growing support for continuous efficiency and durability improvement. Globally, original equipment manufacturers are focusing on optimizing combustion technologies to fulfill more stringent environmental regulations on emissions. Companies such as Cummins Inc. continue to launch sophisticated powertrain solutions addressing commercial and individual mobility requirements. Growing vehicle demand in emerging economies is driving volumes into production. The integration of electronic monitoring systems in automotive engines is driving market growth.

Market Dynamics

Integration of Hybrid Powertrains

The global automotive engine market is transforming with another trend, such as the incorporation of hybrid technologies into traditional internal combustion engines. Automakers are looking at using electric support with gasoline and diesel powertrains to develop efficiency and meet tightening emissions specifications. For instance, Ford Motor Company has boosted its hybrid ICE models, confirming both lower fuel consumption and enhanced driving performance.

Shift Toward Lightweight Engine Materials

In terms of engine efficiency, the industry is moving increasingly towards lightweight materials such as aluminum and advanced alloys, as a means of improving efficiency and reducing overall weight. To support global sustainability targets, for instance, Hyundai Motor Company has taken an active role in supporting light design for the engine parts. It improves vehicle efficiency even when managing environmental issues.

Market Segmentation

• Based on the placement type, the market is segmented into In-line, V-type, W-type, Boxer / Flat, and Opposed-piston.
• Based on the fuel type, the market is segmented into gasoline, diesel, natural gas / CNG, Hybrid-ICE (mild, full, plug-in), alternative fuels (ethanol, LPG, e-Fuels), and hydrogen ICE.
• Based on the vehicle type, the market is segmented into passenger cars, light commercial vehicles, medium and heavy commercial vehicles, two-wheelers and powersports, and off-road / agricultural / construction.
• Based on the engine capacity, the market is segmented into 1 below 1.5 L, 1.5 to 3 L, and over 3 L.

Gasoline Segment to Lead the Market with the Largest Share

Demand for gasoline engines continues strong, thanks to their lower prices and extensive service support. Producers are busy modifying fuel injection systems to be more performance-oriented while remaining cost-effective.

For instance, Toyota Motor Corp. has been leading the way with its sustained innovations in the design of gasoline engines, especially for compact and mid-sized passenger vehicles. Urban dwellers prefer gasoline engines owing to their combination of power and reduced initial outlay over other engines. Policy interventions are compelling manufacturers to improve thermal efficiency, which makes such engines more environmentally friendly.

Passenger Cars: A Key Segment in Market Growth

Passenger vehicles are among the most critical segments driving the market for automotive engines. Urbanization and increasing disposable income are motivating car purchases in both the developed and emerging economies globally.

For instance, Volkswagen AG has continued to build up its passenger car engine lineup, especially within the small and mid-size vehicle segment. Improvements in engine downsizing tied with turbocharging have enabled manufacturers to reconcile fuel efficiency with power. The trend toward premium technology in volume vehicles is fueling this demand.

Regional Outlook

The global automotive engine market is further divided by geography, including North America (the US and Canada), Europe (the UK, Germany, France, Italy, Spain, Russia, and the Rest of Europe), Asia-Pacific (India, China, Japan, South Korea, Australia and New Zealand, ASEAN Countries, and the Rest of Asia-Pacific), and the Rest of the World (the Middle East & Africa, and Latin America).

Growing Demand for Emission Management and Sustainability Solutions for mobility in Europe

The European automotive engine market is evolving with significant attention on emission management and sustainability solutions for mobility. Native manufacturers are exploring innovative engine designs to satisfy the new Euro 7 regulations.

For instance, BMW AG is among the manufacturers, constantly updating its internal combustion engines with increased efficiency and decreased emissions. The use of mild-hybrid technologies is becoming prevalent among European vehicle fleets. Luxury and compact automobile demand backed by consumer choice sustains demand for high-quality engines. This blend of regulation, innovation, and consumer behavior is dictating Europe's automotive engine market growth pattern.

Asia-Pacific Region Dominates the Market with Major Share

The Asia-Pacific is proving to be a robust growth center for automotive engines fueled by the region's huge consumer market and accelerated industrialization. Countries including China, India, and Japan are boosting market growth.

For instance, Honda Motor Co., Ltd. continues to offer a diverse range of engines to fulfill demand for both two-wheelers and passenger vehicles across the region. Increased levels of investment in local manufacturing plants mean that supply to local markets is uninterrupted. Better penetration rates of hybrid and efficient ICE technologies are having a deep impact on the respective product development.

Market Players Outlook

The major companies operating in the global automotive engine market include BMW AG, Cummins Inc., General Motors Co., Stellantis N.V., and Toyota Motor Corp., among others. Market players are leveraging partnerships, collaborations, mergers, and acquisition strategies for business expansion and innovative product development to maintain their market positioning.

Recent Developments

• In August 2025, BMW Group started series production of electric engines for Neue Klasse. The Gen6 electric engine for the sixth generation of BMW eDrive (Gen6) is the first all-electric drive train to be manufactured at the Steyr plant in Austria. There, it will be exported across the production network, supplying the drive train for the Neue Klasse. This broad experience and wealth of knowledge regarding drive trains render the engine plant the most suitable plant to manufacture the Gen6 electric engines.
• In August 2025, Hyundai Motor Company and General Motors announced their plans for their initial five jointly developed vehicles, a major milestone in their earlier announced strategic alliance. The partners continue to evaluate other joint vehicle development programs for world markets, as well as opportunities for collaboration in propulsion systems, including internal combustion engines, hybrid, battery electric, and hydrogen fuel cell technologies.
• In June 2023, Toyota Motor Corp. (Toyota) unveiled a series of new technologies backing its evolution as a mobility company. It is also researching and testing fuel cell electric vehicles (FCEVs), such as passenger vehicles, commercial buses and trucks, FC stationary generators, and hydrogen combustion engine-powered vehicles. Toyota is working on developing hydrogen tanks with simple installation and that support various vehicle types and sizes.
• In October 2022, Stellantis announced it would Produce Hydrogen-powered, Electric, and Combustion Engine Commercial Vehicles. These hydrogen-powered vehicles will be assembled on the site’s multi-energy line, which already produces the electric and combustion engine versions of the K-Zero daily. The usual stages of paintwork and assembly, on the same production line as combustion engine and electric vehicles, before they enter the new 8,000-m² facility that focuses solely on the final tuning.

The Report Covers

• Market value data analysis of 2025 and forecast to 2035.
• Annualized market revenues ($ million) for each market segment.
• Country-wise analysis of major geographical regions.
• Key companies operating in the global automotive engine market. Based on the availability of data, information related to new products and relevant news is also available in the report.
• Analysis of business strategies by identifying the key market segments positioned for strong growth in the future.
• Analysis of market-entry and market expansion strategies.
• Competitive strategies by identifying ‘who-stands-where’ in the market.

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