Key Insights

The European Internal Combustion Engine (ICE) market, valued at €45.81 billion in 2025, is projected to experience steady growth with a Compound Annual Growth Rate (CAGR) of 4.10% from 2025 to 2033. This growth, while moderate, reflects the ongoing demand for ICE vehicles, particularly in specific segments. Several factors contribute to this sustained market performance. The continued prevalence of diesel vehicles in commercial fleets, particularly heavy-duty trucks and buses, within Europe ensures a substantial market segment resisting immediate electrification. Furthermore, the established infrastructure for gasoline and diesel fuel distribution and the relatively lower initial cost of ICE vehicles compared to electric alternatives maintain market traction, particularly within the lower capacity engine segments (50-200cm³). However, stringent emission regulations, increasingly stringent fuel efficiency standards, and the burgeoning electric vehicle (EV) market represent significant headwinds. The market segmentation reveals a clear disparity; larger engine capacity segments (801-3000cm³) are likely to experience slower growth due to stricter emission norms and the faster adoption of electric alternatives in passenger cars and vans. Geographic variations exist within Europe as well. Germany, France, Italy, and the United Kingdom are expected to remain key contributors, driven by their established automotive industries and large vehicle fleets. However, the growth rate will likely be lower in these regions than in others due to the more aggressive adoption of EVs and the increasing focus on sustainable transportation solutions.

The competitive landscape features prominent players like Volvo AB, Hyundai Motors, Toyota Motor Corporation, BMW, Volkswagen Group, and MAN SE. These manufacturers are strategically adapting their offerings, focusing on improved fuel efficiency and emission reduction technologies within ICE vehicles to maintain competitiveness and comply with the ever-tightening regulatory environment. Success in the coming years hinges on a nuanced approach that balances the continued demand for affordable and reliable ICE technology with the inevitable transition to sustainable powertrains. Future growth in this sector will rely heavily on the development of advanced internal combustion technologies focused on improved fuel efficiency and reduced emissions, allowing this market to occupy a niche alongside the growing dominance of electric vehicles.

This comprehensive report provides a detailed analysis of the Europe Internal Combustion Engines market, offering invaluable insights for industry professionals, investors, and strategic decision-makers. We delve into market dynamics, growth trends, segment performance, and the competitive landscape, projecting market evolution from 2019 to 2033. The report utilizes data from 2019-2024 as the historical period, 2025 as the base and estimated year, and 2025-2033 as the forecast period. This analysis incorporates data measured in Million units.

Europe Internal Combustion Engines Market Dynamics & Structure

The European Internal Combustion Engine (ICE) market is experiencing a complex interplay of factors influencing its structure and growth. Market concentration is moderate, with several major players holding significant shares, but a fragmented landscape of smaller specialized manufacturers also exists. Technological innovation is driven by the need for improved fuel efficiency, reduced emissions, and enhanced performance, though the pace is slowing due to the rise of electric vehicles. Stringent regulatory frameworks, particularly regarding emissions (Euro standards), are reshaping the market, incentivizing the development of cleaner ICE technologies and pushing some manufacturers to exit the market. Competitive substitutes, primarily electric and hybrid powertrains, pose a significant challenge, impacting market size and growth potential. End-user demographics, including the shift towards smaller, more fuel-efficient vehicles, influence demand patterns. M&A activity has been relatively low in recent years, as companies prioritize investment in alternative powertrain technologies.

• Market Concentration: Moderate (xx%), with top 5 players holding xx% market share.
• Technological Innovation: Focus on fuel efficiency, emission reduction, and advanced combustion technologies. Barriers include high R&D costs and the rapid shift towards electrification.
• Regulatory Framework: Stringent Euro emission standards are driving technological advancements but also limiting market growth.
• Competitive Substitutes: Electrification is the primary competitive threat.
• End-User Demographics: A shift towards smaller vehicles is impacting engine size demand.
• M&A Activity: Low in recent years (xx deals in the past 5 years).

Europe Internal Combustion Engines Market Growth Trends & Insights

The European ICE market witnessed a decline in recent years (2019-2024) due to stricter emission regulations and increased adoption of electric vehicles. The market size in 2024 was estimated at xx Million units, exhibiting a negative CAGR of xx% during the historical period. However, the market is expected to stabilize in the coming years with a projected CAGR of xx% during the forecast period (2025-2033), reaching xx Million units by 2033. This stabilization is partly attributed to continued demand in niche segments (e.g., commercial vehicles, off-highway equipment) and technological advancements enabling ICEs to meet stringent emission norms. Consumer behavior shifts, such as the preference for SUVs and larger vehicles in specific segments, are also influencing market growth. Technological disruptions such as the adoption of mild-hybrid and 48V systems are creating new opportunities within the ICE market, though their overall impact remains limited compared to the electrification trend. Market penetration for specific technologies, such as gasoline direct injection, is expected to increase in the coming years.

Dominant Regions, Countries, or Segments in Europe Internal Combustion Engines Market

Germany, France, and the UK remain the dominant markets for ICEs in Europe, accounting for xx% of the total market share in 2024. Within engine capacity segments, the 801 cm3 to 1500 cm segment holds the largest market share (xx%), followed by the 1501 cm3 to 3000 cm segment (xx%). In terms of fuel type, gasoline engines currently dominate (xx%), followed by diesel engines (xx%). However, the market share of gasoline engines is expected to increase gradually due to tighter regulations on diesel emissions.

• Key Drivers for Dominant Regions: Robust automotive manufacturing sectors, well-developed infrastructure, and established supply chains.
• Key Drivers for Dominant Segments: Continued demand from commercial vehicles and off-highway equipment for larger engine capacities, and the affordability of gasoline engines.
• Growth Potential: While overall market size is declining, specific niches (e.g., specialized commercial vehicles) present growth opportunities.

Europe Internal Combustion Engines Market Product Landscape

The product landscape is characterized by continuous improvements in fuel efficiency, emission control, and performance. Manufacturers are focusing on advanced combustion technologies (e.g., high-pressure direct injection, variable valve timing), downsizing strategies to improve fuel economy, and the integration of mild-hybrid systems to enhance performance and reduce emissions. Unique selling propositions focus on meeting stringent emission standards while maintaining power and efficiency. Technological advancements emphasize reducing emissions without significantly impacting performance.

Key Drivers, Barriers & Challenges in Europe Internal Combustion Engines Market

Key Drivers:

• Stringent regulations are pushing for technological improvements, although they may also limit overall market growth.
• Continued demand from commercial vehicles and off-highway machinery.
• Advancements in fuel efficiency and emission control technologies.

Key Challenges:

• Rising competition from electric vehicles.
• Increasingly stringent emission regulations.
• Supply chain disruptions due to geopolitical factors and the semiconductor shortage (estimated impact of xx Million units in 2024).

Emerging Opportunities in Europe Internal Combustion Engines Market

Emerging opportunities lie in the development of alternative fuels (e.g., biofuels, synthetic fuels) for ICEs, enabling reduced emissions and a longer lifespan for this technology. Further optimization of existing technologies to meet more stringent emission standards will remain an important avenue for growth. Growth in specific niche markets such as off-highway vehicles and marine engines also presents considerable potential.

Growth Accelerators in the Europe Internal Combustion Engines Market Industry

Long-term growth will depend on technological innovation to reduce emissions even further and increase fuel efficiency. Strategic partnerships between ICE manufacturers and developers of alternative fuels are vital for market expansion. The development of cost-effective technologies to meet stricter emission regulations while maintaining engine performance will also drive further growth.

Key Players Shaping the Europe Internal Combustion Engines Market Market

• Volvo AB
• Hyundai Motors
• Toyota Motor Corporation
• BMW
• Volkswagen Group
• MAN SE

Notable Milestones in Europe Internal Combustion Engines Market Sector

• 2021: Introduction of Euro 7 emission standards impacting engine technology.
• 2022: Several key players announce significant investments in alternative fuel technologies.
• 2023: Increased focus on the development of mild-hybrid and 48V systems.

In-Depth Europe Internal Combustion Engines Market Market Outlook

The future of the European ICE market is intricately linked to the pace of electrification and the continued development of cleaner ICE technologies. While facing significant headwinds from electric vehicles, the market is expected to remain relevant for niche segments and continue its shift toward greater fuel efficiency and reduced emissions. Strategic opportunities lie in focusing on efficient and cost-effective technologies that meet increasingly stringent regulatory demands. Growth will largely depend on the success of implementing technologies that minimize emissions, improving fuel efficiency, and developing strategies that leverage the existing infrastructure and expertise while gradually transitioning to alternative powertrains.

Europe Internal Combustion Engines Market Segmentation

• 1. capacity
  • 1.1. 50 cm3 to 200 cm3
  • 1.2. 201 cm3 to 800 cm3
  • 1.3. 801 cm3 to 1500 cm3
  • 1.4. 1501 cm3 to 3000 cm3
• 2. Fuel Type
  • 2.1. Gasoline
  • 2.2. Diesel
  • 2.3. Others

Europe Internal Combustion Engines Market Segmentation By Geography

• 1. United Kingdom
• 2. Italy
• 3. France
• 4. Germany
• 5. Russia
• 6. NORDIC
• 7. Turkey
• 8. Rest of Europe