Diesel Engines Market Size, Share, Growth, Analysis

[277 Pages Report] The global diesel engines market in terms of revenue was estimated to be worth $63.9 billion in 2023 and is poised to reach $78.8 billion by 2028, growing at a CAGR of 4.3% from 2023 to 2028. Boost in production and manufacturing demand in the medium to long term will generate demand for continuous and reliable power supply. However, the loss of consistent power supply would result in plant downtime and hence heavy losses. The performance of power generation and oil & gas plus mining industries is expected to drive the growth of the diesel engine market.

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Diesel Engines Market Dynamics

Driver: Increasing urbanization and industrialization

According to the UN, as of 2022, 50% of the global population lives in urban areas and is projected to increase to 68% by 2050. North America, South America, and Europe remain the most urbanized regions, while rapid urbanization is expected in Africa and Asia Pacific during the forecast period. Urbanization requires the development of basic support infrastructure and power T&D networks. The rising demand for modern infrastructure in urban areas has increased activity in the construction, chemical & petrochemical, food & beverage, and utilities sectors. Power reliability is one of the key growth factors for the industries, which can be achieved using diesel engines as a primary or backup source of power generation.

Restraint: High fuel costs and operation & maintenance costs

Diesel fuel is costly compared to alternatives such as gasoline and other fuels, especially for longer-duration operations. Preventive maintenance requires regular servicing and refilling of the lubrication, cooling, fueling systems, starting batteries, and fuel filters. These costs add up to the total operating and maintenance costs of diesel engines and are higher than the operating cost of renewable technologies. Moreover, factors such as extreme temperatures, weather, and saltwater (in marine applications) can increase the frequency of maintenance activities. On the contrary, new emerging technologies, such as battery energy systems for backup power solutions, have no fuel costs and are easy to maintain and operate. With the growing competition from these emerging technologies, high fuel costs and operation and maintenance costs of diesel engines can be major restraints for market growth.

Opportunity: Growth in hybrid power generation in rural and remote locations

Hybrid power generation can meet the power requirement of remote areas or off-grid locations, such as remote industrial units, telecom towers, small villages and islands. Most off-grid sites are located in developing regions such as Africa and Asia Pacific, where electrification is not absolute. However, the growing power demand can be met by deploying hybrid power systems designed according to the individual power requirements of residential and non-residential customers. Diesel generators are combined with renewable sources (wind, solar, or both) by the hybrid power systems  to ensure a 24*7 power supply to off-grid sites with fewer interruptions. For example, the wind-diesel system generates electricity using wind turbines and diesel generators. This system helps reduce fuel consumption and operating costs. Therefore, hybrid power generation is expected to gain momentum during the forecast period for an adequate and reliable power supply.

Challenge: Rising demand for natural gas in power generation applications

The advancement of oil & gas drilling and extraction technologies in the recent past has made shale gas more economical. This advancement has also resulted in abundant natural gas production, resulting in a sharp downturn in the natural gas prices in the US market and price corrections in the global market. The low natural gas prices compared to diesel prices have encouraged the increased use of natural gas engines for electricity generation. Utilities have since embraced natural gas-fired power plants as the cheapest sources of large-scale electricity generation. Most of capacity growth would take place at the expense of coal and nuclear power generation, whose share is expected to reduce.

Diesel Engines Ecosystem

Prominent companies in this diesel engine market include well-established raw material providers/suppliers, component manufacturers, diesel engine manufacturers/assemblers, distributors, end users, and post-sales services. These companies have been operating in the market for several years and possess state-of-the-art technologies, substabtial R&D investments, a diversified product portfolio, and strong global sales and marketing networks. Caterpillar (US), Cummins Inc. (US), Volvo Penta (Sweden), Hyundai Heavy Industries (South Korea), and MAN Energy Solutions (Germany) are some of the prominent companies in this market.

By speeds, high-speed engines followed by medium-speed engines are expected to be the fastest-growing market segment during the forecast period.

This report segments the diesel engines market based on speed into low, medium, and high. 720–1,200 rpm is considered under the medium-speed diesel engines. High speed is bifurcated into two segments, 1200–1800 rpm and above 1800 rpm. High-speed diesel engines have wide applications in marines, power generation, and other sectors. Medium- and slow-speed engines are known for fuel flexibility and can operate on low-grade fuels. Medium-speed engines are common on smaller ships and power plants, driving electrical generators and propellers. The medium-speed marine diesel engine is usually used on amphibious warfare ships like landing craft utility (LCU), main auxiliary engineering ships, and Tugboats.

By End User, the power generation segment is expected to be the largest during the forecast period

The diesel engine market has been categorized based on end-users into power generation, marines, locomotives, mining, oil & gas, construction, and others. Diesel engines are used for emergency standby, prime/continuous, and peak shaving operations across the end users as needed. Increasing demand for uninterrupted power supply to support manufacturing and processing activities is expected to aid the demand growth for diesel engines for power generation applications.

“Asia Pacific is projected to be the fastest-growing region during the forecast period”

Asia Pacific is expected to fastest growing region in the diesel engines market between 2023–2028, followed by North America and Europe. The rising number of boats, crafts, and vessels will contribute to the growth of propulsion systems and small marine engines in the Asia Pacific region. The demand for small marine engines in the defense sector is also expected to increase because of the ongoing territorial conflicts among countries such as China, the Philippines, North Korea, Japan, India, Vietnam, Pakistan, and Afghanistan, thereby driving the diesel engine market in the region for marine applications. Hence, these factors are expected to fuel the growth of the diesel market in the Asia Pacific region.

Key Market Players

Global players dominate the market. The major players in the diesel engines market are Caterpillar (US), Cummins Inc. (US), Volvo Penta (Sweden), Hyundai Heavy Industries (South Korea), and MAN Energy Solutions (Germany). Strategies such as product launches, agreements, and contracts are followed by these companies to capture a significant diesel engine market share.

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Scope of the Report

This research report categorizes the diesel engine market by speed, power rating, end user, and region.

On the basis of speed, the diesel engines market has been segmented as follows:

• Low (Up to 720 rpm)
• Medium (720–1200 rpm)
• High (1200–1800 rpm, Above 1800 rpm)

On the basis of power rating, the diesel engine market has been segmented as follows:

• Below 0.5 MW
• 0.5–1.0 MW
• 1.1–2.0 MW
• 2.1–5.0 MW
• Above 5.0 MW

On the basis of end user, the diesel market has been segmented as follows:

• Power generation
• Marines
• Locomotives
• Oil & Gas
• Mining
• Construction
• Others

On the basis of region, the diesel market has been segmented as follows:

• Asia Pacific
• Europe
• North America
• South America
• Middle East & Africa

Recent Developments

• In March 2023, Caterpillar announced the development of the CAT C13D, a new 13-liter diesel engine platform designed to achieve best-in-class power density, torque, and fuel efficiency for optimizing the performance of heavy-duty off-highway applications. The C13D would meet the emissions standards of higher regulated markets, such as EU stage v, US EPA tier 4 final, China non-road IV, Korea stage V, and Japan 2014, with models available for lesser regulated markets.
• In June 2022, WinGD and Hyundai Heavy Industries’ Engine Machinery Division (EMD) collaborated on delivering the first WinGD engine capable of running on ammonia, providing a vital step in shipping’s progress toward decarbonization.
• In February 2021, Cummins provided Isuzu with midrange B6.7 diesel platforms for medium-size trucks to meet global customer needs. Cummins and Isuzu would closely work together to integrate the engine with Isuzu’s chassis and to meet Japan’s emission regulations.

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