Internal Combustion Engine Market Global Report 2026

The internal combustion engine market size has grown strongly in recent years. It will grow from $165.56 billion in 2025 to $178.96 billion in 2026 at a compound annual growth rate (CAGR) of 8.1%. Growth during the historic period was driven by increasing demand for transportation vehicles, rising utilization of industrial equipment, growing infrastructure development activities, expanding adoption of agricultural machinery, and increasing demand for reliable power generation systems.

The internal combustion engine market size is expected to see strong growth in the next few years. It will grow to $240.5 billion in 2030 at a compound annual growth rate (CAGR) of 7.7%. The growth in the forecast period can be attributed to the increasing demand for low-emission engine technologies, rising adoption of alternative fuel engines, growing development of hydrogen-fueled internal combustion engines, expanding demand for advanced engine efficiency solutions, and increasing need for sustainable combustion technologies. Major trends in the forecast period include the growing development of fuel-efficient internal combustion engines, increasing adoption of alternative fuel-compatible engine technologies, rising integration of advanced combustion optimization systems, increasing demand for high-performance engine components, and growing focus on engine emission reduction technologies.

The rising vehicle production is expected to propel the growth of the internal combustion engine market going forward. Vehicle production refers to the manufacturing of automobiles, including passenger cars, commercial vehicles, and two-wheelers, through the assembly of components such as engines, chassis, tires, and interior systems. The increase in vehicle production is driven by growing urbanization, which creates higher demand for personal vehicles and commercial transportation for daily commuting, goods distribution, and public mobility. Internal combustion engines power vehicles by converting fuel into mechanical energy, supporting efficient transportation and large-scale vehicle production through their reliable and widely adopted propulsion technology. For instance, in April 2026, according to the International Organization of Motor Vehicle Manufacturers, a France-based trade association, global vehicle production increased from 92.7 million units in 2024 to 96.4 million units in 2025, marking a 3.9% increase, while global vehicle sales rose from 95.3 million units to 99.8 million units, reflecting a 4.7% increase. Therefore, the rising vehicle production is driving the growth of the internal combustion engine market.

Major companies operating in the internal combustion engine market are focusing on developing innovative solutions, such as fuel-flexible engine platforms, to improve fuel efficiency, reduce emissions, and support the transition toward lower-carbon powertrain technologies. Fuel-flexible engine platforms are advanced internal combustion engine architectures built on a common base engine structure that can be adapted to operate on different fuels, including diesel, natural gas, and hydrogen, through fuel-specific cylinder heads and fuel systems, providing greater operational flexibility and sustainability than conventional single-fuel engines. For instance, in April 2024, Cummins Inc., a US-based engine and power solutions manufacturer, launched the Next Generation X15 Off Highway engine at Intermat 2024. The 15-liter engine, built on the Cummins HELM platform, delivers up to 700 horsepower and 3,200 Nm of peak torque while offering improved fuel efficiency, lower emissions, and maintenance intervals of up to 1,000 hours. The engine features a common base design that can be configured for advanced diesel, natural gas, or hydrogen operation, enabling customers to select the fuel option best suited to their operational requirements while reducing lifetime carbon emissions and operating costs. This innovation reflects the growing industry emphasis on flexible, lower-emission internal combustion technologies for heavy-duty applications.

In June 2026, Kim Long Motor Hue JSC, a Vietnam-based automotive manufacturer, partnered with ZF Friedrichshafen AG to establish a long-term strategic collaboration in drivetrain technology, automotive transmissions, and new-energy vehicle solutions. Through this partnership, Kim Long Motor and ZF Friedrichshafen AG aim to integrate ZF’s core components into both internal combustion engine and electric vehicles manufactured by Kim Long Motor, improve vehicle quality, operational stability, and fuel efficiency, advance automotive technologies, and develop an international-standard after-sales service ecosystem. ZF Friedrichshafen AG is a Germany-based automotive technology company specializing in driveline, chassis, transmission, and mobility solutions.

Major companies operating in the internal combustion engine market are Toyota Motor Corporation, Ford Motor Company, General Motors Company, Honda Motor Company, Hyundai Motor Company, Stellantis N.V., Mercedes-Benz Group AG, BMW Group, Nissan Motor Company, Caterpillar Inc, Volvo Group, Tata Motors Limited, Cummins Inc, Kubota Corporation, Mahindra & Mahindra Limited, Bajaj Auto Limited, Yanmar Holdings Co. Ltd., Rolls-Royce Power Systems AG, TVS Motor Company Limited, Everllence, Yamaha Motor Company Limited, Isuzu Motors Limited, Kohler Co, Deutz AG.

Asia-Pacific was the dominating region in the internal combustion engine market in 2025. Asia-Pacific is expected to be the rapidly growing region in the forecast period. The regions covered in the internal combustion engine market report are Asia-Pacific, South East Asia, Western Europe, Eastern Europe, North America, South America, Middle East, Africa.

The countries covered in the internal combustion engine market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Taiwan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

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