Engine and Exhaust System Market 2024 – Market Size & Segments Analysis, Industry Trends, Manufacturers Analysis, Opportunities and Forecast 2034

The engine is the heart of the vehicle that transforms fuel into mechanical energy. An engine exhaust system is a complex system of pipes and devices that collects exhaust gases from an engine, removes harmful substances, reduces noise, and discharges the purified gases away from the vehicle's occupants. The exhaust system collects the exhaust gases from the cylinders, removes harmful substances, reduces the level of noise and discharges the purified exhaust gases at a suitable point of the vehicle away from its occupants.

MARKET OVERVIEW

The market valuation of engine and exhaust system market was valued at approximately USD 113.5 billion in 2023 and is projected to reach USD 158.9 billion in 2034 exhibiting a CAGR of 4.0% during the forecast period of 2024-2034. Engine and exhaust system are the backbone of vehicle propulsion mechanism. The market is aligned with automotive sector, which makes it a sustainable and growing market. 

GROWTH DRIVERS

The government stringent regulations worldwide are strict in order curb vehicles emissions. These regulations drives the market towards continuous innovation and adoption of advanced technologies. For instance, the European Union (EU) has strict emission regulations like Euro 6 to reduce greenhouse gas (GHG) emissions and help the EU reach its goal of climate neutrality by 2050. The regulations state that carbon emissions from large trucks and buses, including vocational vehicles, will have to be reduced by 45 percent from 2030, 65 percent from 2035, and 90 percent from 2040. New urban buses will need emissions reduced by 90 percent by 2030 and become zero-emission vehicles by 2035.

The advancements in engine technology like advanced engine technologies like turbocharging, direct fuel injection and variable valve timing enhances fuel efficiency and performance. The companies are investing heavily in such technologies which in turn boosts the demand of the market.  For instance, HCCI is the ultimate combustion method for achieving both CO2 reduction and clean exhaust using auto-ignition of gasoline, as in a diesel engine the ignition mechanism for HCCI combustion does not depend on spark plugs, it is necessary to control the auto-ignition timing and combustion duration. Nissan has newly developed technology to accurately simulate HCCI three-dimensionally, according to Nissan Motor Corporation.

The increasing popularity of hybrid vehicles necessitate the development of new types of engines and exhaust systems. The hybrid vehicles particularly require innovative exhaust systems to manage emissions effectively, which significantly drives the market towards growth. According to Bureau of Transportation Statistics, Hybrids captured 3.2% of the light vehicle market in 2013 and again 5.5% in 2021. All-electric vehicles accounted for 3.2% of the light vehicle market in 2021. The rise in automotive production in emerging economies drives the demand of the market significantly towards growth. In 2022, 85.4 million motor vehicles were produced around the world, an increase of 5.7% compared to 2021, according to European Automobile Manufacturers' Association.

The demand for fuel efficiency where rising fuel cost and environmental concerns drives the consumer demand for vehicles with better fuel efficiency. The engine and exhaust system manufacturers are responding by developing systems that optimize fuel consumption and reduce emissions. These innovations in this area are crucial for meeting both regulatory and consumer demands contributing towards market growth. Studies have shown that when gas prices are higher, people tend to buy smaller, more fuel-efficient cars instead of larger, less efficient ones. Demand for fuel-efficient used cars also increases when gas prices are high. Additionally, the automotive industry is shifting towards fuel-efficient vehicles due to consumer demand for greener transportation options and regulatory pressures, according to the Congressional Budget Office. 

MARKET SEGMENTATION:

·         By Component Type- Engine Components (Pistons, Camshafts, Valves, Crankshafts, Sensors, Others) and exhaust components (manifolds, catalytic converters, mufflers, tailpipes, sensors, downpipes, others)

·         By Vehicle Type- Passenger and Commercial Vehicles

·         By Sales Channel- OEM (original equipment manufacturer) and aftermarket

·         By Region- North America, Europe, Asia Pacific, Middle East and Africa, South America

Engine and Exhaust System Market Segment By Component Type Review:

In the engine components segment, pistons are initial components of internal combustion engines, converting the energy generated by the combustion of fuel into mechanical motion. They play a critical role in the engines power output and efficiency. The camshafts control the opening and closing of the engine wells, which is crucial for the intake of air and fuel and the expulsion of exhaust gases. The engine valves regulate the flow of gases into and out of the combustion chambers. The crankshafts convert the linear motion of pistons into rotational motion which drives the vehicles wheels.

The sensors are the integral mode part of the modern engine, providing real time data on various parameters like temperature, pressure, air and air fuel ratio. These sensors enables advanced engine management systems to optimize performance, fuel efficiency and emissions. In the exhaust components segment, the manifolds collect exhaust gases from the engine cylinders and direct them to the catalytic converter. The catalytic converters are critical for reducing harmful emissions from vehicles by converting toxic gases into less harmful substances.

The mufflers reduces the noise produced by the exhaust system. The innovations and muffler design have led to more effective noise reduction while minimizing the impact on engine performance. The tailpipes expels exhaust gases from vehicle into the atmosphere. The exhaust sensors, like oxygen sensors, monitors the composition of exhaust gases to ensure optimal engine performance and compliance with emission regulations. The downpipes connects the turbochargers to the rest of the exhaust systems, playing a crucial role in turbocharged engines.

Engine and Exhaust System Market Segment By Vehicle Type Review:

The passenger cars are designed primarily for the use for personal use, such as sedans, SUV, hatchbacks and coupes. The engine exhaust systems in these vehicles are tailored to provide balance between performance, fuel efficiency and emission compliance. The consumers in this segment seek a blend of power and efficiency. The innovations like variable valve timing, cylinder deactivation and lightweight materials are becoming standard to meet these expectations. The integration of advanced sensors and electronic control units in modern engine improves the fuel management emission control and overall vehicle performance. The commercial vehicle encompasses a variety of trucks, buses and vans used for transporting goods and passengers. These vehicles prioritize durability, performance and efficiency due to their intensive use and heavier load. The commercial vehicles require higher torque and power to handle heavy load and challenging terrains.

Engine and Exhaust System Market Segment By Sales Channel Review:

An original equipment manufacturer (OEM) is a company whose goods are used as components in the products of another company, known as a value-added reseller (VAR). The VAR works closely with the OEM, which often customizes designs based on the VAR’s needs and specifications. OEMs usually focus on business-to-business sales, while VARs sell to the public or other end users. The aftermarket encompasses all parts and systems that are not sourced from the OEM aftermarket parts are used for vehicle repairs, maintenance and upgrades after the original equipment is installed.

Engine and Exhaust System Market Regional Analysis:

North America is a significant market driven by the factors like emission standards by the US Environmental Protection Agency who sets rigorous emission regulations that drives the demand for advanced engine and exhaust technologies. This push for reduced emission encourages innovation and adoption of new systems. Europe is a valuable market driven by the factors like the presence of robust automotive manufacturing hub like Volkswagen, BMW, Daimler and more.

Aisa Pacific is a significant market driven by the factors like urbanization and rapid industrial growth in countries which drive the demand for commercial and passenger vehicles, boosting the demand for engines and exhaust systems market. The Middle East and Africa is a promising market driven by the factors like investments in infrastructure development which drive the demand for commercial vehicles, boosting the market for engines and exhaust systems coupled with strict emission regulations. South America is another promising market driven by the factors like urbanization and modernization.

Key Challenges:

One primary challenge is adhering to increasing stringent emission standards set by governments and regulatory bodies worldwide. These regulations necessitate significant investment in research and development in order to produce compliant engine and exhaust systems, which may increase production cost and reduce profit margins. The development of advanced engine and exhaust technologies to meet environmental standards involves substantial financial investments. These costs may be a barrier particularly for smaller manufacturers who may struggle to compete with larger and well-established companies. The growth in electric vehicles which do not require traditional exhaust systems poses a significant threat to engine and exhaust system market. The more the consumers and manufacturers move towards EV’s the demand for conventional engine and exhaust components is expected to decline.

Competitive Landscape:

In the highly competitive engine and exhaust system market, companies are investing heavily in research and development to innovate and improve the product and services. They are also collaborating, forming strategi partnerships, or acquiring other companies to gain access to new market segments, enhance distribution networks, and increase market share.  The news and development include -  In July 2023, Proton AG and AAPICO Hitech Public Company Limited formed a strategic partnership through a joint venture, Purem Aapico. This collaboration aims to supply exhaust emission control systems to Proton and other vehicle manufacturers in Thailand and the ASEAN market. In May 2023, Cummins Inc. announced the acquisition of FORVIA Faurecia's commercial automotive exhaust business in Europe and the U.S.

The manufacturing plants in Columbus, Indiana, and Roermond are included in this acquisition. In March 2023, Milltek Sport Ltd launched a new lineup of upgraded performance exhaust systems for the BMW M3 Touring. These exhaust systems are meticulously designed, developed, and manufactured at Milltek Sport's state-of-the-art advanced facility.  In March 2023, Vance & Hines announced a Vance & Hines HoleShot Series Cat-Back Performance Exhaust Systems for U.S. most popular truck models. The HoleShot Series offers exhaust systems designed to replace the original stock exhaust systems from the catalytic converter to the exhaust tips.

These systems retain all the emissions-control equipment while providing a richer exhaust sound through a turbo-chambered muffler design. In May 2022, Allied Distribution, a wholesale distributor specializing in exhaust, performance, and accessories, acquired Indy Exhaust Products, Incorporated, a distributor of automotive exhaust components. This strategic acquisition by Allied Distribution aims to capitalize on new opportunities, allowing them to expand their market reach and enhance their level of service even further.

Global Key Players:

·         Forvia

·         Tenneco Group

·         Continental AG

·         Eberspacher

·         Futaba Industrial

·         Sango

·         Friedrich Boysen GmbH & Co. KG

·         Yutaka Giken

·         Denso

·         Borgwarner

·         Other Players