Automotive Off-Highway Engine Market Size

Market Size Snapshot

Note – Market size depicts the revenue generated over the financial year

The global market for the off-highway engines of automobiles is estimated to reach $ 24.38 billion in 2023. It is expected to rise to $ 30.4 billion by 2032. This growth rate represents a CAGR of 2.48 % from 2024 to 2032. The market growth is mainly due to the growing demand for off-road vehicles in the construction, agricultural and mining sectors, which is driving the need for more powerful and efficient engines. Also, technological innovations such as the integration of hybrid and electric engines into the powertrain, which meet stricter emissions standards and increase fuel efficiency, will further support market growth. The main players in the market, such as Cummins Inc., Caterpillar Inc. and Volvo Penta, are actively investing in research and development to improve their product offerings. Strategic initiatives, such as the launch of new engine models that meet the latest environmental standards, are expected to play a key role in maintaining their market positions. These companies are therefore well positioned to benefit from the latest market trends and the needs of the consumers, thereby ensuring sustained growth in the coming years.

Regional Market Size

Regional Deep Dive

The market for Off-Highway Engines is characterized by diverse dynamics across different regions, which is mainly driven by varying economic conditions, regulatory frameworks and technological advancements. In North America, the market is driven by the strong agricultural and construction industries, while in Europe, stringent regulations on emissions have pushed the demand for cleaner engine technology. Asia-Pacific, on the other hand, is characterized by rapid urbanization and industrialization, which is driving the demand for off-highway engines. The Middle East and Africa are characterized by strong oil and gas exploration activities, while Latin America is slowly embracing new engine technology in the face of challenging economic conditions. Each region has its own growth potential, which is largely influenced by the characteristics of the local market.

Europe

• Compared to the rest of the world, Europe has been at the forefront in regulating exhaust emissions. It is the European Union’s upcoming tier 5 standard, which imposes a drastic reduction in particulate matter and nitrogen dioxide emissions, that has forced manufacturers like JCB and Volvo to develop cleaner engines.
• The rise of automation and smart technologies in agriculture and construction is pushing companies to develop advanced off-highway engines that integrate IoT capabilities, enhancing efficiency and performance.

Asia Pacific

• The construction machinery industry in the Asia-Pacific region is experiencing a boom, mainly due to the development of urbanization and the building of roads. Major manufacturers such as Hitachi and Komatsu have increased their production capacity to meet this demand.
• Government initiatives in countries like China and India, aimed at boosting the manufacturing sector, are leading to increased investments in off-highway vehicle production, further driving the demand for advanced engine technologies.

Latin America

• Latin America is experiencing a gradual shift towards adopting more efficient off-highway engines, driven by economic recovery efforts and increased agricultural activities, with companies like AGCO and CNH Industrial leading the way.
• Government programs aimed at modernizing agricultural practices are encouraging the use of advanced off-highway vehicles, which in turn is boosting the demand for high-performance engines.

North America

• The American market is changing. Caterpillar and John Deere are developing hybrid and electric off-road engines to meet the requirements of the environment and the consumers' demand for sustainable solutions.
• Recent infrastructure initiatives, such as the U.S. Infrastructure Investment and Jobs Act, are expected to boost demand for off-highway vehicles, particularly in construction and transportation sectors, thereby driving engine sales.

Middle East And Africa

• The Middle East is heavily investing in oil and gas exploration, which is driving demand for robust off-highway engines, with companies like Perkins and Cummins providing specialized engines for this sector.
• Regulatory frameworks in the region are gradually evolving, with a focus on sustainability, prompting manufacturers to adapt their engine technologies to meet new environmental standards.

Did You Know?

“Did you know that off-highway vehicles account for approximately 30% of the total engine market, highlighting their significant role in various industries such as agriculture, construction, and mining?” — Global Engine Market Analysis Report 2023

Segmental Market Size

The Automotive Off-Highway Engine Market is currently growing at a steady rate, driven by the increasing demand for efficient and powerful engines in the agriculture, construction and mining industries. The need for improved fuel efficiency and performance, along with stringent emission regulations, is driving the market. Furthermore, the shift towards hybrid and electric engines is reshaping engine designs, thereby addressing both the need for greater efficiency and the growing concern for the environment. The market is currently in a mature phase of adoption, with Caterpillar and John Deere leading the way in integrating advanced engine technology. In the North American and European regions, engines complying with the latest emission standards are being widely adopted. The key applications are in the agricultural, construction and mining industries, where reliable and powerful engines are required. In addition, trends such as sustainable development and government regulation for reduced emissions are driving the market. Technological developments such as telematics and engine management systems are shaping the evolution of this market.

Future Outlook

The off-highway engine market is expected to grow at a steady rate from 2023 to 2032, from $24.38 billion to $30.4 billion, with a CAGR of 2.48%. The demand for off-road vehicles is expected to increase in agriculture, construction, and mining, where the need for power and efficiency is great. The global urbanization process is accelerating, and the construction of public works is increasing. The demand for off-road engines will increase, and the penetration rate will increase. In 2032, the penetration rate of off-road engines in emerging economies with a high degree of development will be about 15%. The key technology, especially in terms of engine efficiency and emissions, will play a significant role in shaping the market. The use of hybrid and electric drive systems is expected to be popularized by stricter emissions regulations and the growing trend of green development. The use of IoT and smart technology will increase the efficiency of off-road vehicles and reduce their downtime, which will also drive market growth. The manufacturers have adapted to these trends and have made significant investments in R&D. In the next ten years, they will have opportunities for innovation and differentiation in the field of off-highway engines.