India Automotive Engine Market Overview, 2029

The Indian automotive engine market, a longstanding champion of affordability, is undergoing a fascinating shift towards compressed natural gas (CNG) technology. While traditional giants like diesel and gasoline continue to dominate, a unique confluence of factors is propelling CNG engines into the spotlight for players in the automotive industry. India boasts the world's fourth-largest refining capacity, yet it remains heavily reliant on imported crude oil. This translates to a precarious vulnerability to fluctuating global oil prices, a concern deeply felt by cost-conscious Indian consumers. CNG, however, offers a compelling alternative. Domestically produced and significantly cheaper than gasoline or diesel, CNG presents a substantial cost advantage at the pump. Recent news highlights this perfectly: in March 2024, the price differential between CNG and petrol reached a record high of nearly 60%, making CNG a highly attractive proposition for budget-minded car buyers. The allure of CNG extends beyond immediate cost savings. Government incentives, including tax breaks and subsidies for CNG vehicles, further enhance their affordability. Additionally, CNG engines are lauded for their lower emissions compared to their gasoline and diesel counterparts. This resonates with a growing environmentally conscious consumer base and aligns with stricter emission regulations being implemented by the Indian government. A recent study by a leading environmental research institute in India revealed that widespread adoption of CNG vehicles could lead to a significant reduction in particulate matter emissions in major cities, a major public health concern. Despite these compelling advantages, the CNG engine market faces some hurdles. Infrastructure limitations, particularly the availability of CNG refueling stations, can be a deterrent for potential buyers. However, the government is actively addressing this gap by investing heavily in expanding the CNG network across the country. Recent news reports indicate plans to triple the number of CNG stations by 2025, a move that is expected to significantly boost CNG adoption. According to the research report "India Automotive Engine Market Overview, 2029," published by Bonafide Research, the Indian Automotive Engine market is projected grow by more than 7% CAGR from 2024 to 2029. The Indian automotive engine market is a dynamic landscape fueled by a potent mix of demographic shifts, government regulations, and a growing emphasis on alternative fuels. On one hand, a burgeoning young population with rising disposable incomes is driving demand for passenger vehicles, particularly compact cars and SUVs. This segment, in turn, favors cost-effective and fuel-efficient petrol and diesel engines. However, stricter emission regulations, aligned with global trends, are pushing manufacturers to adopt cleaner technologies like Bharat Stage (BS) VI compliant engines. This necessitates significant investments in research and development to meet these stringent norms while maintaining affordability for the price-sensitive Indian consumer. The government further incentivizes this shift towards cleaner mobility through schemes like FAME II (Faster Adoption and Manufacturing of Electric Vehicles), promoting electric vehicles and hybrid powertrains. This policy push, coupled with growing environmental consciousness, is expected to disrupt the traditional petrol and diesel dominance, albeit at a gradual pace due to limited charging infrastructure and higher upfront costs of electric vehicles. On the other hand, India's robust two-wheeler industry thrives on a different set of demands. Here, affordability reigns supreme, with a strong preference for small, fuel-efficient engines. Manufacturers are constantly innovating in this segment, focusing on cost optimization and improved fuel efficiency to cater to the value-conscious customer. However, rising fuel prices and concerns around air quality in major cities are pushing for stricter emission regulations for two-wheeler engines as well. This presents a challenge for manufacturers to strike a balance between affordability and cleaner technology adoption. The Indian automotive engine market is not without its hurdles. A significant challenge lies in the country's dependence on imported components and technology for advanced engines. This can lead to fluctuations in production costs and limit domestic innovation. Additionally, the fragmented nature of the auto component industry, with a mix of large and small suppliers, creates complexities in ensuring quality and timely supply of parts. Furthermore, the global semiconductor chip shortage has disrupted production schedules across the industry, impacting engine production as well.

The first segmentation is on the basis of product type. Dominating the Indian market, in-line engines (both gasoline and diesel) are popular choices due to their affordability, ease of maintenance, and fuel efficiency. With a focus on maximizing mileage, smaller capacity in-line engines (1.0 - 1.5 liters) reign supreme in passenger cars like hatchbacks and compact SUVs, particularly in the budget-conscious A and B segments. For higher power demands in C-segment sedans and compact SUVs, larger in-line engines (1.2 - 2.0 liters) are offered, often with turbocharging for a balance of performance and efficiency. In the commercial vehicle segment, in-line engines with larger displacements (up to 6.0 liters and above) power workhorses like trucks and buses, prioritizing durability and torque for hauling heavy loads. Technological advancements like multi-point fuel injection and variable valve timing have further enhanced their fuel efficiency and emission control, making them compliant with stricter regulations. However, a growing demand for power, especially in SUVs and some premium sedans, is leading to a rise in the adoption of 6-cylinder in-line engines. While not as widespread as in-line engines, V-type engines find favor in premium passenger cars (C and D segments) and some utility vehicles (SUVs) due to their inherent advantages. Their compact V-shaped design allows for larger engine capacities within a limited space, enabling them to deliver superior power and torque compared to in-line engines of similar displacement. This caters to a growing segment of Indian consumers who prioritize performance and driving experience. However, their higher complexity translates to increased manufacturing costs and slightly higher maintenance requirements, limiting their widespread adoption in a price-sensitive market like India. W-type engines are a rare sight in the Indian market due to their extreme performance orientation and high production costs. These engines are typically found in luxury performance cars and are not suited to the typical driving conditions and infrastructure limitations in India. Their complex design and power delivery characteristics cater to a niche segment of enthusiasts who prioritize raw power and handling over fuel efficiency and affordability. Their bulky design makes them unsuitable for most passenger cars and commercial vehicles where space optimization is crucial. The next segmentation is based on fuel type. Despite a global push towards alternative fuels, gasoline engines continue to hold the dominant position in the Indian automotive engine market, particularly in passenger cars (A, B, and C segments) and two-wheelers. This dominance is driven by several factors: the extensive network of gasoline refueling stations across the country, the lower upfront cost of gasoline vehicles compared to diesel or electric alternatives, and the perception of gasoline engines being smoother and offering better refinement. However, rising gasoline prices and stricter emission regulations are putting pressure on this segment. Advancements in engine technology like direct injection and turbocharging are helping gasoline engines remain competitive in terms of fuel efficiency and performance. Diesel engines have traditionally held a strong position in the Indian market, particularly for commercial vehicles (trucks, buses) and utility vehicles (SUVs). Their high torque output and superior fuel efficiency over longer distances make them ideal for hauling heavy loads and long commutes. However, stricter emission regulations, particularly for Bharat Stage (BS) VI norms, have necessitated the adoption of expensive after-treatment technologies like Selective Catalytic Reduction (SCR) systems, pushing up the acquisition and maintenance costs of diesel vehicles. Additionally, a recent government policy shift towards electric vehicles for public transportation and potential bans on older diesel vehicles in major cities could dampen the future growth of this segment. The "Other Fuel" segment in the Indian market is on the rise, driven by government initiatives promoting alternative fuel sources for cleaner transportation. This segment includes: CNG offers a significantly lower cost of operation compared to gasoline and diesel, making it an attractive option for budget-minded consumers, particularly in the taxi and three-wheeler segment. The growing network of CNG filling stations across major cities is also aiding its adoption. Similar to CNG, LPG offers a cost-effective alternative fuel option. However, its lower range and limited availability of filling stations compared to CNG restrict its widespread use. The electric vehicle (EV) segment in India is still in its nascent stage, but it is witnessing rapid growth due to government incentives, falling battery prices, and increasing environmental awareness. Electric engines are primarily being adopted in two-wheelers and compact passenger cars, catering to urban commuters seeking a clean and economical mode of transportation. However, range anxiety due to limited charging infrastructure and higher upfront costs of EVs remain key challenges for wider adoption. Biofuels like ethanol blended gasoline are being explored as a renewable alternative to reduce dependence on fossil fuels. However, limited production capacity and infrastructure bottlenecks hinder their widespread use. Passenger cars, integral to India's urban and semi-urban landscape, form the cornerstone of the automotive engine market, with segmentation based on size and features. Small cars, encompassing A and B segments, emphasize affordability and fuel efficiency, sporting engines of 1.0-1.2 liters to navigate congested cityscapes, catering to price-conscious consumers. Mid-size cars, in the C segment, strike a balance between cost and features with slightly larger engines (1.2-1.5 liters), appealing to the burgeoning middle class seeking comfort and performance. Executive cars and SUVs, from D segment onwards, prioritize luxury and power, employing engines above 1.5 liters with advanced technologies to deliver premium driving experiences to affluent clientele. Meanwhile, motorcycles, pivotal for both rural and urban commute, exhibit a diverse engine market catering to varied capacities and needs. Commuter motorcycles up to 150cc focus on extreme fuel efficiency, while executive motorcycles (150cc-250cc) offer a blend of power and efficiency for comfortable rides. Premium motorcycles above 250cc target enthusiasts craving power and prestige, boasting advanced features for thrilling experiences. In the realm of commercial vehicles, engines are tailored for endurance and load-bearing, with light commercial vehicles (LCVs) emphasizing fuel efficiency and maneuverability, and medium to heavy commercial vehicles (M&HCVs) prioritizing reliability and efficiency over long distances through advanced technologies. Buses, essential for public transport, feature engines designed for durability and power, catering to diverse needs from intra-city shuttles to intercity coaches traversing long distances. Considered in this report • Historic year: 2018 • Base year: 2023 • Estimated year: 2024 • Forecast year: 2029

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Aspects covered in this report • Automotive Engine market Outlook with its value and forecast along with its segments • Various drivers and challenges • On-going trends and developments • Top profiled companies • Strategic recommendation By Product Type • In-line Engine • V-type Engine • W Engine By Fuel Type • Gasoline • Diesel • Other Fuel

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By Vehicle Type • Passengers Car • Motorcycles • Commercial Vehicles (Trucks, Buses, Etc) • Special Purpose Vehicles (Construction machinery, agricultural machinery, etc) The approach of the report: This report consists of a combined approach of primary and secondary research. Initially, secondary research was used to get an understanding of the market and list the companies that are present in it. The secondary research consists of third-party sources such as press releases, annual reports of companies, and government-generated reports and databases. After gathering the data from secondary sources, primary research was conducted by conducting telephone interviews with the leading players about how the market is functioning and then conducting trade calls with dealers and distributors of the market. Post this; we have started making primary calls to consumers by equally segmenting them in regional aspects, tier aspects, age group, and gender. Once we have primary data with us, we can start verifying the details obtained from secondary sources. Intended audience This report can be useful to industry consultants, manufacturers, suppliers, associations, and organizations related to the Automotive Engine industry, government bodies, and other stakeholders to align their market-centric strategies. In addition to marketing and presentations, it will also increase competitive knowledge about the industry.