Demand for Diesel Engines to Exceed $19 Billion in 2013

Demand for diesel engines and related products is forecast to rise 6.2 percent annually to $19.5 billion in 2013.  Gains will be driven by the recovering US heavy truck market.  Rebounding consumer confidence and loosening credit standards will encourage truck fleet owners and managers to purchase new vehicles, virtually all of which are outfitted with diesel engines.  Further advances will be led by continued emissions control regulations, which will increase the cost of diesel engines by several thousand dollars.  As these regulations become more stringent, transportation specialists must either remanufacture existing engines to meet the new standards, or opt to purchase new engines.  Finally, as the large numbers of truck engines purchased as part of the 2006 pre-buy are subject to wear and tear, these engines will have to be replaced.  Many fleet owners and managers will choose to install newer diesel engines, which generally offer enhanced fuel economy with reduced maintenance needs. These and other trends, including market share and product segmentation, are presented in Diesel Engines & Related Parts, a new study from The Freedonia Group, Inc., a Cleveland-based industry research firm.

Demand for diesel engines and related parts in the motor vehicle market as a whole is projected to advance 8.5 percent annually to $10.7 billion in 2013.  In addition to the heavy truck market, increased use of diesel engines in recreational vehicles, light trucks and passenger cars will also spur demand gains.  Consumers will increasingly opt for diesels due to their fuel economy and superiority over gasoline engines for towing and hauling.  Further advances will be promoted by increased sales of medium-duty trucks and specialty vehicles, such as ambulances and dump trucks, of which the majority is equipped with diesels.

In the non-motor vehicle segment of the diesel engine market, demand for engines and related parts is forecast to rise 3.7 percent annually to $8.8 billion in 2013.  Advances will be derived from increased construction spending, which will boost demand for diesel-powered construction and mining equipment.  Further gains will be promoted by the implementation of Tier 4 emissions control standards for off-road diesels.  These regulations, which are scheduled to be fully phased in by 2014, will force many owners of diesel-powered equipment to upgrade their engines to meet the new standards, or purchase new, more environmentally friendly diesel engines.

The Freedonia Group is a leading international business research company, founded in 1985, that publishes more than 100 industry research studies annually. This industry analysis provides an unbiased outlook and a reliable assessment of an industry and includes product segmentation and demand forecasts, industry trends, demand history, threats and opportunities, competitive strategies, market share determinations and company profiles.