Industrial Engines Market Size, Share, and Industry Analysis, By Type (Diesel, Gasoline, and Natural Gas), By Application (Power Generation, Material Handling, Construction, Agriculture and Others), and Regional Forecast, 2026-2034

The global industrial engines market size was valued at USD 61.6 billion in 2025. The market is projected to grow from USD 65.6 billion in 2026 to USD 108.5 billion by 2034, exhibiting a CAGR of 6.49% during the forecast period.

The global industrial engines market is set to grow steadily owing to the growing demand for various propelling systems in different industries, such as mining, agriculture, construction, and heavy equipment. Also, the steadily growing demand for advanced power generation systems in the backup power industry is bolstering demand in the long term.

The COVID-19 pandemic impacted the business negatively owing to minimal investments in new industrial machinery and industrial assets. Also, declined demand and hampered supply chain situations globally have impacted industries' revenues and significantly stopped engine order growth in the short term.

• For instance, according to the Oxford Economic Report, the global construction sector investment was USD 9.7 trillion in 2022, projected to reach USD 13.9 trillion by 2037.

Impact of Generative AI on the Industrial Engines Market

Post-pandemic prominent manufacturers have incorporated advanced machine learning and AI technology into their industrial engines for effective power generation management, which has bolstered demand for advanced Industrial Engines. Also, modern industrial engines are mostly incorporated with AI for effective fuel and power management in advance heavy equipment for material handling and other operations to bolster demand in the long term.

Industrial Engines Market Driver

Growing Technological Advancement and Industrialization Drive Market Growth

Industries are emphasizing developing more advanced gasoline and natural gas engines for optimal material handling operation with minimal downtime, which has supported demand. Also, prominent players are focusing on developing an optimal advanced solution that can be digitally controlled for monitoring engine performance, and maintenance activities have bolstered demand in the long term. Furthermore, the expansion of mining and manufacturing sectors in developing nations, particularly in India, Vietnam, Singapore, South Africa, Italy, and other parts of the world, has bolstered demand for industrial engines in material handling and heavy operations globally.

• For instance, in January 2024, according to the China Association of Automobile Manufacturers (CAAM), the automotive sector growth in China increased by 12% in 2023 compared to 2022.

Industrial Engines Market Restraint

Market Fragmentation and Competitive Pricing Hampered the Market Growth

The presence of numerous small and medium-sized players in the commercial engine segment is offering imported industrial engines in domestic markets at a competitive price, which hampers growth with market fragmentation. Also, prominent players' high part replacement and repair costs create a market gap for new players to penetrate the market with competitive prices and better operational life.

Industrial Engines Market Opportunity

Easy Refurbishment and Penetration in Emerging Markets to Create Business Opportunities

Globally, the demand for standard industrial engines that offer fuel efficiency and performance is growing progressively. Also, the high demand for automotive and substantial use of heavy equipment in material handling and commercial operations in Asian countries has created business opportunities for industrial engine manufacturers in the long term.

• For instance, in January 2024, CNH Industrial, a prominent Italian-American off-road engine manufacturer, announced the commercial production of Tier-4 and Trem 5 industrial engines in their new Noida, India production plant. The company has invested USD 25-30 million in the plant and has an annual capacity of 10,000 engines, which can be expanded to 40,000.

Segmentation

Key Insights

The report covers the following key insights:

• Micro Macro Economic Indicators
• Drivers, Restraints, Trends, and Opportunities
• Business Strategies Adopted by the Key Players
• Impact of Generative AI on the Global Industrial Engines Market
• Consolidated SWOT Analysis of Key Players

Analysis by Type

By type, the market is divided into diesel, gasoline, and natural gas.

Diesel industrial engines for commercial heavy equipment are growing significantly over the forecast period owing to growing demand for mining equipment and increasing investment in infrastructure development in economically growing regions such as China, India, Vietnam, Indonesia, and Others.

Analysis by Application

By application, the market is divided into power generation, material handling, construction, agriculture, and others.

Industrial engines are used predominantly in heavy construction operations for structure lifting and infrastructure works such as excavation, commercial loading, and other heavy construction activities. This heavy industrial equipment backed by industrial engine power packs enables faster job completion and minimal downtime, significantly driving the demand for industrial engines in mining equipment applications.

Regional Analysis

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In terms of geography, the global market is segmented into North America, Europe, Asia Pacific, South America, and Middle East & Africa.

Asia Pacific accounted for the largest share of the global industrial engines market owing to the presence of major players in the region and high production volumes generated in countries such as China, Japan, India, and other countries. Also, Chinese players are gaining commercial advantage due to increasing infrastructure projects and competitive price drive demand across the commercial equipment industry.

North America is the second-largest market based on consumer base and higher demand for quality industrial engines across countries such as the U.S. and Canada. Prominent players' acquisition strategies to expand portfolios and sales are increasing demand for commercial and industrial engines in the long term.

European countries' emphasis on developing sustainable products helps businesses conduct research for advanced fuel efficiency and less carbon emission technology. Also, the presence of prominent established players in this region and stable domestic demand benefits businesses in the long term.

• For instance, in June 2023, Rolls Royce Power Systems, a unit of Rolls Royce, opened its new assembly plant for its MTU 2000 series marine diesel engines. The new plant in Germany is constructed with an investment of USD 32.6 million for the development of MTU series engine projects.

Key Players Covered

The global industrial engines market is fragmented, with the presence of a large number of group and standalone providers. These prominent players in the global market account for just ~57% of the market.

The report includes the profiles of the following key players:

• Caterpillar (U.S.)
• John Deere (U.S.)
• Yanmar (Japan)
• Volvo Penta (Sweden)
• FTP Industrial (Italy)
• MAN (India)
• Toyota Industries (Japan)
• General Motors (U.S.)
• Weichai (China)
• DEUTZ (Germany)
• Cummins (U.S.)
• Isuzu (Japan)
• Yuchai (Germany)
• Kubota (Japan)
• Kohler Power (U.S.)

Key Industry Developments

• In July 2024, TAFE Motors, a prominent Indian firm, partnered with Deutz AG, a German engine manufacturer for tractors, industrial applications, and generators. The collaboration marks an expansion of Deutz AG to the Indian markets.
• In January 2024, a prominent industrial equipment manufacturer, Kubota, introduced two new engine solutions for OEM forestry and agricultural sectors. The new product line includes a 3.8 liter 210 hp hydrogen engine that eliminates carbon dioxide emission by using hydrogen as fuel.