Small Diesel Engines Market

The Global Small Diesel Engine market size is forecast to reach $4.1 billion by 2027, growing at a CAGR of 2.6% from 2022 to 2027. The small diesel engines are deployed in various end-user industry verticals, such as industrial organizations, cold chain transport systems, commercial and residential establishments and more for various applications in electricity and delivering refrigeration. Air intake and water are two of the most commonly used cooling types for small diesel and gas engines. Cooling plays a vital role in the efficient functioning of the engine as the interior of generators that make use of such engines need to be constantly cooled in order to protect it from damage and ensure its continuing operations. Growth in construction and manufacturing activities owing to the rapid economic recovery of major global economies after the COVID-19 pandemic have significantly increased the adoption of small diesel engine-powered generator systems. This is anticipated to directly boost the demand for small diesel engines during the forecast period. Typically, engines with more than 22kW of power utilize water cooling while smaller, portable diesel engines make use of air intake cooling. This is one of the factors that make engines below 20kW less expensive. Besides, engines with higher power and cylinder capacity also require noise-suppressing components to ensure the engine noise do not exceed acceptable decibel levels during operation. Therefore, engines with higher cylinder capacity and power ranges are anticipated to witness a greater increase in prices during the forecast period owing to the higher commodity costs, material procurement costs and labor costs necessary for manufacturing such equipment.

Report Coverage

The report: “Small Diesel Engine Industry Outlook - Forecast (2022-2027)” covers an in-depth analysis of the following segments in the Small Diesel Engine industry.

• By Engine Cylinder Capacity: Below 1 Liters, 1-1.3 Liters, 1.4-1.6 Liters, 1.7-2.0 Liters
• By Power Range: Below 10kW, 10.1-20kW, 20.1-30kW, Above 30.1kW
• By Cooling Type: Air Cooled, Water Cooled
• By Speed Category: Constant Speed, Variable Speed
• By Application: Industrial Equipment, Refrigerated Cold Chain Vehicles, Generators, Others
• By End User: Industrial, Cold Chain Transportation, Commercial and Residential, Others
• By Geography: North America (U.S, Canada, Mexico), Europe (U.K, Germany, Italy, France, Spain, Others), APAC (China, Japan, South Korea, India, Australia, Others), South America (Brazil, Argentina, Others), RoW (Middle East, Africa).

Key Takeaways

• APAC is analyzed to account for the fastest-growing region during the forecast period 2022-2027, due to government spending on solar power generation projects, penetration of wearable devices and others.
• Government initiatives or regulations towards promoting the use of solar technology along with rising research works harnessing solar energy within the clothing or textile industry is analyzed to drive the Small Diesel Engine industry outlook during the forecast period.
• Most of the solar cell present in the market is crafted out of 2D, planar amorphous silicon on a rigid/brittle glass substrate, though, these fiber-optic solar cells have a 3D cross-section and retain the glass fiber’s intrinsic flexibility.

Small Diesel Engine Market Segment Analysis - By Cooling Type

The Water-Cooled segment dominated the Small Diesel Engines market in 2021 with a revenue of $ 2,160.8 Million and is projected to reach a revenue of $ 2,417.7 million by 2027, growing at a CAGR of approximately 2.4% during the forecast period 2022-2027. The rapid growth of the segment can be attributed to the widespread use of water-cooling systems for small diesel engines with more than 22kW of power. This is because they are more effective at dissipating heat than air-cooled systems, thereby increasing product efficiency and lifespan. However, the air-cooled small diesel engines are set to be the fastest-growing segment with a CAGR of 2.8% during the forecast period 2022-2027. This growth can be attributed to the lower price of air-cooled small diesel engines, which makes them more affordable for the end-users. Besides, small diesel engines with power lower than 22kW do not typically require water cooling as the heat generated by their operation is not significantly high. Moreover, air intake cooling is sufficient for most diesel engines designed for residential use.

Small Diesel Engine Industry Segment Analysis - By Application

The generators segment dominated the global small diesel engines Market size in 2021 with revenue of $ 1,454.8 million and is forecast to reach $1,691.3 by 2027 growing at a CAGR of 2.7% during the forecast period 2022-2027. The higher share of the segment is attributed to the growth in the use of diesel-powered generator systems for industrial, commercial and residential use owing to the surge in the incidence of power outages in both developing and developed regions. However, the Refrigerated cold chain vehicles segment is predicted to register the fastest growth rate at a CAGR of 3.1% during the forecast period 2022-2027. The rapid growth of the segment is owing to the rise in the adoption of cold chain vehicles for the transportation and distribution of COVID-19 vaccines in 2021. The adoption of such refrigerated cold chain vehicles is projected to continue during the forecast period owing to the launch of additional booster doses by key vaccine manufacturers coupled with the increasing demand for vaccines in low and middle-income countries.

Small Diesel Engine Industry Segment Analysis - Geography

The Asia Pacific segment dominated the global small diesel engines market size in 2021 with revenue of $1,406.1 million and is forecast to reach $ 1,677.5 million by 2027 growing at a CAGR of 3.1% during the forecast period 2022-2027. Increasing manufacturing and construction activities in key Asia Pacific economies such as China, India and Japan post the COVID-19 pandemic is one of the major factors driving the adoption of small diesel engines in the region. For instance, according to the Chasing International Economic Institute, infrastructure construction contributed to around 8% of China’s economic growth during the first quarter of 2022. Small diesel engines are typically used for power generation or for operating various equipment present in construction sites or manufacturing plants. In addition, Asia Pacific region is also projected to be the fastest-growing market with a CAGR of approximately 3.1% during the forecast period.

Small Diesel Engine Market Drivers

The rise in the adoption of off-road diesel engines is propelling the market growth

According to the International Council of Clean Transportation (ICCT), annual demand for diesel engines is predicted to increase from 3.6 million units in 2018 to 3.9 million by 2024 in non-road applications. By that time, it is estimated that 97% of engines produced will fulfill Tier 3 or higher emissions regulations. The key players are focusing on developing, purchasing, and optimizing sophisticated NOX and PM after-treatment technologies for use in a new Tier 4 off-road diesel engine, with the goal of lowering NOX emissions by 90% and PM emissions by 75% below Tier 4 final regulations. The companies are also exploring methods to help reduce any associated fuel system economy penalties, providing CARB with an optimized low-NOX and low-PM configuration to support future Tier 5 standards, which is driving the growth of the small diesel engines market. To achieve the largest emission reductions, the Environment Protection Authority (EPA) has adopted numerous tiers of emission standards and implemented a comprehensive national program to minimize emissions from nonroad diesel engines by integrating engine and fuel system controls, which is propelling the manufacturers to develop highly-efficient diesel engines with low emissions. Similarly, the European Commission has put in place rules to limit air pollution from non-road mobile machines, thereby encouraging the usage of diesel engines off-highway. Companies across the world are developing new small diesel engines with enhanced pollution control systems to meet the Tier 4 emission criteria, which is further propelling the market growth. This is driving demand for diesel engines over gas engines An increase in the demand for diesel generators is enhancing the market growth

According to the International Energy Agency (IEA), worldwide energy demand will increase by over 60% by 2030. Over 1 billion people in developing countries have gained access to modern energy fuels such as coal, electricity, kerosene, liquefied petroleum gas (LPG), and natural gas in the last 25 years. The IEA also predicts that during the next 20 years, emerging countries' primary energy consumption will expand at a rate of 4% per year on average. Asia's energy demand is predicted to treble in the next 25 years, owing to economic and demographic expansion. Moreover, according to the International Energy Agency (IEA), Diesel generators are an excellent alternative for meeting home needs as well as high-energy demands in rural areas. Diesel generators are simple to install when compared to gas engines and can be utilized as stand-alone systems or in hybrid systems with other sources of energy such as solar power. The fundamental benefit of such a system is that depending on the operating environment and time of day, it can source electricity from the cheapest source. Emerging economies are invariably accompanied by a development in infrastructure. Diesel generators ensure round-the-clock power supply for the infrastructure development not only in remote locations but also in the event of a grid failure. Diesel generators have proven to be a versatile and long-lasting source of power in major developing countries, with applications including lighting, irrigation pumping, cottage industries, and rural processing facilities. For instance, India is estimated to have about 4 million small diesel engines just to run irrigation pumps.

Small Diesel Engine Market Challenges

An increase in the demand for alternative fuel energy sources is hampering the market growth

According to the US Department of Energy, In 2021, the United States utilized about 30.28 trillion cubic feet (Tcf) of natural gas, which is roughly 31.35 quadrillion British thermal units (quads) and accounts for nearly 32% of total energy consumption in the country. According to the Energy Information Administration's (EIA) annual survey of electric generators, Natural gas-based energy accounted for 43 percent of the U.S. power generating capacity. In 2019, natural gas has generated more electricity than any other source, accounting for 39 percent of total energy output. Combined-cycle technology, which surpassed coal-fired equipment in 2018 to become the technology with the greatest power generating capacity in the United States, is used in the majority of the natural gas-fired capacity built in recent decades. Natural gas (NG) energy sources are becoming more cost-competitive with diesel engines and have a better greenhouse gas emission profile. NG energy sources in the higher power rating range are typically either lean burning, where the air-to-fuel ratio is higher than the stoichiometric air-to-fuel ratio (16:1), resulting in a lower combustion temperature that minimizes NOx emissions, or rich burning, where the air-to-fuel ratio is lower, depending on the type of ignition and fuel system used.

Small Diesel Engine Industry Outlook

Product launches, acquisitions, and R&D activities are key strategies adopted by players in the Small Diesel Engine market. The key players in the Small Diesel Engine market include

• Kubota
• Yanmar Holdings
• Mitsubishi
• Kohler Co
• Cooper Corp
• Perkins Engine
• Toyota Industries Corporation
• Greaves Cotton Ltd.
• Motorenfabrik Hatz
• Taizhou Bison Machinery Co., Ltd

Recent Developments

• In October 2021, Motorenfabrik Hatz announced the acquisition of Inecosys, a technology startup which specializes in the development of control and electronic systems. Through this acquisition, Hatz aims to curb emissions from their diesel engines with the help of electronic control.
• In November 2021, Kohler announced the launch of a new range of small diesel engines for mobile and stationary applications. The new Kohler Small Displacement (KSD) engines will be offered in naturally aspirated, turbocharged and turbocharged charge-air cooled versions, and will have a maximum power output of 18.4 kW with an engine cylinder capacity of 1.391 liters.
• In March 2021, Kubota, through its subsidiary, Kubota UK Limited, a manufacturer of industrial Off-Highway, Diesel and Spark Ignited engines, entered into a Partnership with Lister Wilder Ltd, a UK-based leading Agriculture, Grounds Maintenance and Construction Equipment Dealer. Through the new Partnership, Lister Wilder will be responsible for the sale and servicing of Kubota’s Industrial diesel engines.

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