Internal Combustion Engine (ICE) Market Size, Share & Trends Analysis Report By Fuel (Petroleum, Natural Gas), By End Use (Automotive, Aircraft, Marine), By Region, And Segment Forecasts, 2018 - 2025

Industry Insights

The global internal combustion engine (ICE) market demand was pegged at 157,105 thousand units in 2017 and is expected to exhibit a CAGR of 4.9% from 2018 to 2025. The market, over the last few years, has faced challenges due to heavy dependence on already limited reserves of fossil fuels and requirement for improvements in emission levels. However, the recent array of advanced technologies, including low temperature combustion engines and hybrid systems, have helped the industry gain traction, a trend expected to elevate industry growth over the forecast period.

With the advent of electric vehicle technology, IC engines are now pooled with hybrid electric powertrains to augment fuel economy. These engines are also combined with plug-in hybrid electric systems to expand the plug-in hybrid electric vehicles portfolio. These aforementioned benefits are expected to offer avenues for industry growth over the coming years.

Under strict legal requirements for fuel economy and exhaust emissions, industry players looking to develop high-speed and high-power engines with optimal customer satisfaction and minimal environmental effects. However, despite these efforts, government bodies across the world are tolling the bell for IC engines, particularly across the automotive sector. For example, U.K., France, Norway, India, and Netherlands are planning to ban ICE sales by 2025. Countries such as China and Germany are also planning to enforce a similar ban, although they have not specified any time frame to do so.

In an optimistic scenario, if electric vehicles live up to the expectations set up by leading EV manufacturers, the timeframe set by countries mentioned above to ban sales of new IC engines could turn into a reality. However, as of now, it seems highly unlikely that IC engines will go out of business anytime soon. Adoption of EVs will take considerable time for largescale adoption, largely owing to lack of sophisticated charging infrastructure across several countries and high price of these vehicles.

Fuel Insights

The ICE market is segmented into petroleum and natural gas on the basis of fuel. The petroleum segment dominated the market with a volume-based share of over 80.0% in 2017 and can be further segmented into diesel and gasoline. Gasoline engines accounted for more than 45.0% of the overall volume in 2017. This growth can be ascribed to benefits offered by gasoline engines such as less noise and vibration as well as low fuel prices.

Natural gas, although available in abundance and with considerable cost advantage, captured a lower market share in 2017 in the market. In comparison to petroleum, the fuel type will take years to witness widespread adoption since majority of vehicles run on diesel and gasoline. It is expected that the segment will register a CAGR of approximately 4.0% from 2018 to 2025.

End-use Insights

On the basis of end use, the internal combustion engine market is segmented into automotive, marine, and aircraft. The automotive segment accounted for more than 65.0% of the overall volume in 2017 and is expected to register the fastest growth over the forecast period. This growth is attributed to rising consumer disposable income, resulting in increasing adoption of vehicles worldwide. Technological developments resulting in improvements in IC engines in terms of fuel efficiency, emission, and performance will also spur product demand over the coming years.

The aircraft ICE segment is anticipated to expand at a moderate pace, registering a CAGR of over 4.5% from 2018 to 2025. The segment is primarily driven by favorable market dynamics impacting the commercial aviation industry. In addition, technological advancements such as multi-fuel capability that improves fuel mileage could propel demand. The International Air Transport Association (IATA) forecasts a rise in number of global passengers by 2030; to match this demand, the aviation industry is expected to raise its output, which will subsequently drive the aircraft engines segment.

Regional Insights

Asia Pacific captured a sizeable volume share of more than 40.0% in 2017. This is ascribed to high automobile production in the region. The aviation sector in Asia Pacific is also booming and offers avenues for growth of the aircraft engines segment over the forecast years.

North America is also anticipated to witness considerable growth over the forecast period owing to high car adoption rate in the region. Europe accounted for close to 25.0% of the overall market volume in 2017, which is expected to dip over the coming years. This may be attributed to stringent government regulations pertaining to CO₂ emissions, coupled with growing emphasis on use of electric vehicles in the region.

ICE Market Share Insights

The global internal combustion engine market is characterized by the presence of well-established players. Key companies include Volvo AB, Toyota Motor Corporation, Volkswagen AG, Rolls-Royce Holdings plc, Mahindra & Mahindra Limited, Renault SA, Mitsubishi Heavy Industries, MAN SE, General Motors, Ford Motor, Fiat SpA, Caterpillar Incorporated, Shanghai Diesel Engine Company Limited, Bosch, and AGCO Corporation.

Industry participants compete on the basis of price, new product development, and market presence. Manufacturers usually emphasize on strengthening their global footprint in order to enhance market presence and achieve a competitive advantage.

Report Scope

Segments Covered in the Report

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of latest industry trends in each of the sub-segments from 2014 to 2025. For the purpose of this study, Grand View Research has segmented the global ICE market report on the basis of fuel, end use, and region:

• Fuel Outlook (Volume, Thousand Units, 2014 - 2025)

  • Petroleum

    • Diesel

    • Gasoline

    • Others

  • Natural Gas

    • CNG

    • LNG

    • Others

• End-use Outlook (Volume, Thousand Units, 2014 - 2025)

  • Automotive

    • 50-200 HP

    • 200-300 HP

    • <300 HP

  • Marine

    • 258-1000 HP

    • 400-1400 HP

    • 730-1800 HP

  • Aircraft

• Regional Outlook (Volume, Thousand Units, 2014 - 2025)

  • North America

    • U.S.

    • Canada

  • Europe

    • U.K.

    • Germany

    • France

    • Italy

  • Asia Pacific

    • China

    • India

    • Japan

    • South Korea

  • Latin America

    • Brazil

    • Mexico

  • Middle East & Africa