Internal Combustion Engine Market - Global Industry Size, Share, Trends, Opportunity, and Forecast, Segmented, By Fuel Type (Petroleum, Natural Gas), By End-User (Automotive, Marine, Aircraft), By Region, By Competition, 2020-2030F

Market Overview

The Internal Combustion Engine Market was valued at USD 283.11 Billion in 2024 and is expected to reach USD 399.28 Billion by 2030 with a CAGR of 5.74%. The internal combustion engine (ICE) market refers to the global industry involved in the design, production, and distribution of engines that generate power through the combustion of fuel, typically gasoline or diesel, within a controlled chamber. These engines are used in a wide range of applications, including automotive vehicles, industrial machinery, marine vessels, and power generation equipment. ICEs operate on the principle of converting the chemical energy stored in fuels into mechanical energy, which is then used to drive vehicles, operate machines, or generate electricity.

Key Market Drivers

Growing Demand for Fuel-Efficient and High-Performance Vehicles:

The increasing demand for fuel-efficient and high-performance vehicles remains one of the key market drivers for the internal combustion engine (ICE) market. Consumers are becoming more conscious of fuel costs and environmental impacts, leading to a greater preference for vehicles that offer improved fuel efficiency without compromising on performance. ICE vehicles, particularly those powered by gasoline and diesel engines, have undergone significant advancements in technology, such as turbocharging, variable valve timing, and hybridization, to deliver better fuel economy and reduce emissions. These technological improvements enable ICE vehicles to meet stringent fuel efficiency standards set by governments while delivering high power output, making them attractive to a wide range of consumers, from compact cars to high-performance sports vehicles.

In addition, ICE vehicles are still perceived as offering superior driving experience, including faster acceleration, smoother power delivery, and better range compared to electric vehicles, especially in markets with less charging infrastructure. As a result, despite the growth of electric vehicles, the demand for ICE vehicles continues to be robust, particularly in regions where internal combustion engines remain the dominant powertrain technology due to lower initial costs, higher fuel availability, and established service networks. The advancements in ICE technology, combined with regulatory support to improve fuel economy, ensure that internal combustion engines remain a preferred choice for consumers seeking performance and practicality in their vehicles. The market for fuel-efficient vehicles is expected to exceed USD 900 billion by 2030, growing at a CAGR of 6–8% from 2023. Over 70% of global car buyers in recent surveys prioritize fuel efficiency as one of their top three decision-making factors. By 2030, more than 80 countries are expected to implement or tighten fuel economy and emission standards, driving increased demand for efficient vehicle technologies.

Expansion of Automotive Infrastructure and Affordability of ICE Vehicles:

The ongoing expansion of automotive infrastructure and the relatively lower affordability of internal combustion engine vehicles compared to electric vehicles are significant drivers of growth for the ICE market. In many parts of the world, particularly in developing economies, ICE vehicles remain the most viable option due to their widespread availability, lower upfront costs, and the extensive fueling infrastructure in place. Gasoline and diesel fuel stations are more prevalent than electric charging stations, especially in rural or less developed areas, making ICE vehicles a more practical choice for consumers in these regions. The global availability of affordable ICE vehicles, combined with an extensive network of service centers and repair shops, supports continued market growth.

ICE vehicles are often seen as more reliable and easier to maintain, which further enhances their appeal to budget-conscious consumers. This makes internal combustion engines particularly dominant in entry-level and mid-range vehicle segments, where affordability is a key consideration for a large portion of the population. While electric vehicles (EVs) are gaining traction, their higher purchase price, range limitations, and dependence on charging infrastructure in many regions continue to limit their widespread adoption. Additionally, for fleet operators and businesses, ICE vehicles are often considered more cost-effective due to the affordability of the vehicles and the established maintenance ecosystem. As automotive infrastructure continues to expand globally, especially with the development of electric vehicle charging networks, ICE vehicles will remain a key part of the transportation mix in regions where infrastructure for EVs is still in its nascent stages. Combined global sales of hybrid and electric vehicles—key segments known for fuel efficiency—are projected to reach over 60 million units annually by 2030, accounting for nearly 50% of total vehicle sales. New-generation fuel-efficient vehicles can deliver 20–40% better mileage compared to older internal combustion models, resulting in significant lifetime fuel cost savings for consumers.

Technological Advancements in Internal Combustion Engines:

Technological advancements in internal combustion engine (ICE) design and functionality are a crucial driver of market growth. Over the years, there have been significant innovations aimed at improving the efficiency, performance, and environmental friendliness of ICE vehicles. Key developments such as turbocharging, direct fuel injection, and advanced emission control technologies have significantly enhanced engine power while reducing fuel consumption and greenhouse gas emissions. Modern ICEs now offer greater performance and efficiency, aligning with both consumer demands for better driving experiences and stricter regulatory standards. Additionally, the integration of hybrid systems, where internal combustion engines work in tandem with electric motors, has allowed for improved fuel economy and reduced carbon footprints without sacrificing vehicle performance.

The growing adoption of these technologies in passenger cars, trucks, and commercial vehicles is spurring market growth, as consumers seek vehicles that offer both performance and lower operational costs. These technological advancements are not only making ICE vehicles more fuel-efficient but also extending their relevance in an increasingly environmentally-conscious market. Furthermore, research and development efforts continue to focus on enhancing ICE technology, exploring alternative fuels like hydrogen and biofuels, and improving engine durability and reliability. These advancements ensure that the internal combustion engine remains a competitive and viable option, even as the market shifts toward electric vehicles. By continually improving engine performance, fuel efficiency, and emissions, the ICE market remains resilient and continues to meet the demands of both consumers and regulatory bodies globally.

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Key Market Challenges

Environmental Regulations and Shift Toward Sustainable Alternatives

The internal combustion engine (ICE) market faces increasing challenges due to stringent environmental regulations and the global push toward sustainable energy alternatives. Governments worldwide are implementing stricter emission standards and regulations aimed at reducing carbon footprints, which significantly impacts the viability of traditional ICE-powered vehicles. Regulatory bodies, particularly in Europe, North America, and Asia, are enforcing limits on CO2 emissions, nitrogen oxide (NOx), and particulate matter, pushing automotive manufacturers to transition toward cleaner technologies. These regulations force companies to invest heavily in research and development of fuel-efficient and low-emission engines, while also increasing production costs. Additionally, the growing demand for electric vehicles (EVs) is driving automakers to shift their focus toward the development of alternative powertrains, including electric and hydrogen fuel cell vehicles.

This transition poses a challenge for the internal combustion engine market as it faces increasing competition from EVs, which are seen as a more sustainable option in the long term. The infrastructure for electric vehicles, such as charging stations, is expanding rapidly, making them more accessible and attractive to consumers.

This shift in consumer preference towards environmentally friendly vehicles further undermines the demand for traditional internal combustion engines, as consumers increasingly prioritize sustainability and lower emissions. Consequently, manufacturers in the ICE market must adapt to evolving regulations, which include investing in new technologies and complying with emissions standards, or risk facing penalties and losing market share to electric and hybrid alternatives. Additionally, the shift away from fossil fuels, combined with the global trend towards decarbonization, presents a long-term challenge to the ICE market, as it becomes increasingly difficult for traditional engine manufacturers to meet the rising demand for more sustainable and energy-efficient solutions.

Rising Fuel Prices and Operational Costs

Another significant challenge facing the internal combustion engine (ICE) market is the rising cost of fuel and the associated operational expenses for both consumers and manufacturers. The price of crude oil, a key input for gasoline and diesel, is subject to fluctuations driven by geopolitical events, supply chain disruptions, and shifts in global demand, leading to increased fuel prices. Higher fuel costs directly affect the affordability of operating ICE-powered vehicles, making them less attractive to consumers, particularly in regions where fuel prices are volatile. As a result, the cost of ownership for ICE vehicles increases, which can lead to reduced demand, particularly in price-sensitive markets. Additionally, fuel inefficiencies in traditional combustion engines exacerbate this challenge, as these engines generally consume more fuel per mile compared to electric or hybrid powertrains.

Consumers are increasingly seeking vehicles with better fuel efficiency and lower total cost of ownership, further eroding the competitive position of ICE vehicles. On the manufacturer side, rising fuel prices can increase production costs, as fuel price volatility often impacts the cost of raw materials, logistics, and transportation. Manufacturers may also face increased pressure to develop more fuel-efficient engines or to transition to alternative powertrain technologies that can reduce dependence on fossil fuels. In response to higher fuel costs, automakers may be forced to increase the prices of ICE vehicles, which could reduce demand further. While some manufacturers are investing in hybrid or electric vehicle technologies to counter this challenge, the transition requires significant capital investment and poses risks in terms of market acceptance, especially in regions with lower consumer awareness or preference for electric alternatives.

Rising fuel costs can lead to a shift in consumer behavior, where individuals increasingly opt for public transportation, shared mobility solutions, or electric vehicles as a more cost-effective and environmentally conscious alternative. These dynamics, fueled by fluctuating fuel prices and rising operational costs, present ongoing challenges for the internal combustion engine market as it faces an uncertain future driven by both economic and environmental factors.

Key Market Trends

Transition to Cleaner and More Efficient Internal Combustion Engines (ICEs)

The internal combustion engine (ICE) market is experiencing a significant trend towards the development of cleaner and more efficient engines in response to increasing environmental concerns, stricter emission regulations, and growing demand for sustainability in the automotive and transportation sectors. In response to stringent global emissions standards, such as those imposed by the European Union’s Euro 6 regulations and the U.S. Environmental Protection Agency’s Tier 3 standards, automakers are focusing on advanced technologies that reduce harmful emissions while maintaining engine performance and fuel efficiency. Innovations such as turbocharging, variable valve timing, and direct fuel injection are being integrated into ICEs to optimize fuel consumption and reduce carbon dioxide (CO2) and nitrogen oxide (NOx) emissions. Additionally, manufacturers are incorporating hybrid technologies, where ICEs are paired with electric drivetrains, to achieve greater fuel efficiency and lower emissions, contributing to a reduction in overall vehicle carbon footprints.

This trend is further supported by consumer demand for vehicles that meet eco-friendly standards, driven by a growing awareness of climate change and the need for energy-efficient solutions. As a result, traditional ICEs are being redesigned to meet the evolving standards of sustainability while ensuring that performance, reliability, and affordability remain at the forefront of consumer expectations. Moreover, the development of alternative fuels such as biofuels, liquefied petroleum gas (LPG), and compressed natural gas (CNG) is enhancing the environmental profile of ICEs, allowing them to operate more efficiently and with fewer greenhouse gas emissions compared to conventional gasoline or diesel-powered engines. These advancements signal a shift towards a more sustainable internal combustion engine market, with increasing collaboration between automotive manufacturers, fuel suppliers, and regulatory bodies to create a more environmentally friendly and energy-efficient transportation ecosystem.

Integration of Smart Technologies and Connectivity in Internal Combustion Engines

A significant trend in the internal combustion engine (ICE) market is the increasing integration of smart technologies and connectivity features that enhance engine performance, safety, and overall driving experience. As the automotive industry increasingly adopts digitalization, ICEs are being equipped with advanced sensors, embedded software, and data analytics to optimize engine operations, improve fuel efficiency, and enhance real-time diagnostics. Smart technologies, such as predictive maintenance and engine control units (ECUs), are enabling more efficient fuel consumption, reducing emissions, and improving vehicle performance. These systems use sensors to monitor engine conditions, detect potential failures before they occur, and alert drivers or service centers to necessary repairs, reducing downtime and maintenance costs. Furthermore, connectivity features, including vehicle-to-everything (V2X) communication and integration with telematics systems, are enhancing the interaction between vehicles, infrastructure, and other road users, improving safety and traffic management.

This trend is particularly prominent in the development of advanced driver-assistance systems (ADAS) and autonomous driving technologies, where ICEs must be optimized to work seamlessly with electric and hybrid powertrains in fully connected ecosystems. Additionally, the data generated by smart ICEs is being leveraged for research and development purposes, allowing manufacturers to fine-tune engine performance and continuously improve fuel efficiency, emissions, and overall driving dynamics. This integration of connectivity is also paving the way for enhanced consumer experiences, with features like remote diagnostics, over-the-air (OTA) updates, and personalized driving modes that enable drivers to adjust engine performance to their preferences. The increasing demand for connected vehicles is influencing automakers to integrate these advanced technologies into their ICE-powered models, making them smarter, more efficient, and more aligned with the expectations of modern consumers.

Adoption of Downsized and Electrified Internal Combustion Engines

Another significant trend in the internal combustion engine (ICE) market is the growing adoption of downsized and electrified engines as manufacturers strive to meet fuel efficiency standards, reduce carbon emissions, and improve performance. Downsized engines typically feature smaller displacement and reduced cylinder counts, yet incorporate technologies like turbocharging to maintain or even enhance power output. This downsizing trend is driven by increasing regulatory pressures on automakers to reduce fleet-wide CO2 emissions while maintaining the performance characteristics that consumers expect from traditional ICE vehicles.

Downsized engines offer the dual benefit of lower fuel consumption and reduced CO2 emissions without sacrificing the driving experience, making them an attractive option for both manufacturers and consumers. In addition to downsizing, the integration of electrification into traditional ICEs is becoming increasingly prevalent. Hybrid electric vehicle (HEV) and plug-in hybrid electric vehicle (PHEV) technologies combine internal combustion engines with electric motors and batteries, allowing for greater fuel efficiency, reduced emissions, and an overall cleaner driving experience.

These hybrid systems provide the flexibility of both an electric powertrain for short trips and an internal combustion engine for longer journeys, appealing to consumers who seek a compromise between sustainability and convenience. The electrification of ICEs is further supported by advancements in battery technology, which have improved the range and performance of hybrid vehicles. This trend is particularly prominent in the passenger vehicle segment, where consumer demand for fuel-efficient and environmentally friendly vehicles is on the rise. As the global automotive industry transitions toward more sustainable mobility solutions, the adoption of downsized and electrified ICEs is poised to play a key role in meeting stringent emission targets while providing the performance and range expected by consumers.

Segmental Insights

Fuel Type Insights

The Petroleum segment held the largest Market share in 2024. The internal combustion engine (ICE) market within the petroleum segment is primarily driven by the enduring demand for efficient, cost-effective, and reliable energy solutions across various industries, including transportation, manufacturing, and power generation. Petroleum-based fuels, such as gasoline and diesel, continue to be the primary energy source for ICEs, largely due to their high energy density, ease of distribution, and established infrastructure. The global reliance on petroleum fuels for vehicles, machinery, and industrial equipment ensures that ICEs remain a dominant technology in the energy and transportation sectors, despite the growing shift toward alternative powertrains.

The petroleum industry’s well-established supply chains and logistical networks ensure the continuous availability of fuels, further supporting the dominance of ICEs. Within the automotive sector, the high demand for light-duty vehicles, particularly in emerging economies, coupled with a preference for gasoline and diesel-powered engines, drives substantial growth in the petroleum segment of the ICE market. Moreover, the expanding middle-class population and rapid urbanization in regions such as Asia-Pacific and Latin America have spurred a surge in vehicle ownership, thus driving the need for petroleum-based fuels. The durability and high-performance capabilities of ICEs, especially in heavy-duty applications such as trucks, construction machinery, and agricultural equipment, further solidify their position in the petroleum market.

The transportation industry, particularly the freight and logistics sectors, continues to rely heavily on ICE-powered vehicles, which provide the range and power necessary for long-haul operations. Additionally, the petroleum segment benefits from significant investments in refining technologies, leading to improved fuel quality, increased engine efficiency, and reduced emissions, all of which enhance the performance of ICEs. The ongoing optimization of combustion technologies, such as turbocharging, direct fuel injection, and variable valve timing, further improves the efficiency and power output of petroleum-fueled ICEs, making them more competitive in the market despite the rise of electric and hybrid alternatives. Furthermore, the petroleum segment is supported by a favorable policy environment in many countries, where governments continue to incentivize the development of more efficient ICEs through emissions regulations, fuel economy standards, and subsidies for research and innovation in engine technologies.

These regulations foster technological advancements that lead to improved fuel efficiency, reduced emissions, and longer engine lifecycles, ensuring the continued viability of ICEs in the petroleum sector. Additionally, petroleum's role as a key energy resource for power generation, particularly in remote and off-grid regions, ensures a steady demand for ICE-powered generators and machinery. Despite the growing adoption of renewable energy sources, petroleum remains a critical component in the energy mix, particularly in regions where infrastructure for electric vehicles (EVs) and renewable energy technologies is underdeveloped. As a result, the ICE market in the petroleum segment remains a vital part of the global energy landscape, driven by the ongoing demand for reliable, efficient, and versatile energy solutions.

The development of alternative fuels, such as biofuels and synthetic fuels, also contributes to the sustained relevance of ICEs, offering a cleaner, more sustainable option within the petroleum market. Ultimately, the continued reliance on petroleum fuels, coupled with technological advancements and the strategic integration of renewable energy sources, ensures the ongoing growth and importance of ICEs in the petroleum segment.

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Regional Insights

Largest Region

North America region held the largest market share in 2024. A key market driver for the internal combustion engine (ICE) market in the North America region is the sustained demand for light trucks, SUVs, and commercial vehicles, which continue to dominate vehicle sales across the United States and Canada, thereby supporting the ongoing relevance and development of ICE technologies. Despite the global momentum toward electrification, the North American automotive landscape remains heavily influenced by consumer preferences for powerful, versatile, and long-range vehicles—attributes that internal combustion engines currently deliver more cost-effectively and reliably than many electric alternatives.

This strong demand, particularly in rural and suburban regions, is further bolstered by the continent’s extensive road infrastructure, relatively low fuel prices, and a well-established ecosystem of fueling, servicing, and parts supply, making ICE-powered vehicles a practical choice for both consumers and commercial operators. Furthermore, commercial fleet operators and logistics companies continue to favor ICE vehicles due to their high payload capacity, long refueling range, and minimal infrastructure dependencies, which are critical for long-haul trucking and last-mile delivery operations. As a result, original equipment manufacturers (OEMs) in North America are heavily investing in enhancing ICE technologies to meet increasingly stringent emission regulations while delivering greater fuel efficiency and performance.

Technological advancements such as turbocharging, direct fuel injection, cylinder deactivation, and improved combustion management systems are helping manufacturers bridge the gap between environmental compliance and performance expectations. In parallel, the growth of hybrid ICE-electric platforms is gaining traction, with North American automakers increasingly integrating mild hybrid and plug-in hybrid systems into their lineups. These platforms offer a practical transition for consumers who are not yet ready to adopt fully electric vehicles but are interested in lower emissions and better fuel economy. Additionally, regulatory incentives and R&D funding from government programs, such as the U.S. Department of Energy’s Vehicle Technologies Office, are supporting innovation in cleaner and more efficient ICE designs. Another factor propelling the ICE market in North America is the region’s strong manufacturing base, which includes global leaders in engine production, a skilled workforce, and a mature supply chain that facilitates efficient production and innovation cycles.

Advancements in biofuels and alternative fuel technologies such as compressed natural gas (CNG) and renewable diesel are further extending the lifecycle and environmental compatibility of ICEs in the North American market. Industrial and agricultural sectors, particularly in regions like the Midwest and Texas, also rely heavily on ICE-powered machinery and equipment, which contributes to steady demand outside of the passenger vehicle segment.

As policies continue to evolve and infrastructure for electric vehicles gradually expands, the internal combustion engine remains deeply entrenched in North American transportation, logistics, and industry, ensuring its continued importance in the short to medium term. This dynamic blend of consumer preference, commercial utility, technological innovation, and supportive policy measures positions the North American ICE market for continued relevance and gradual evolution, rather than rapid obsolescence, making it a critical driver of regional automotive and industrial activity.

Emerging region:

South America is the emerging region in Internal Combustion Engine Market. The internal combustion engine (ICE) market in South America’s emerging region is being strongly driven by the increasing demand for affordable personal and commercial transportation, rapid urbanization, and expanding industrial activities, all of which are fueling the growth of the automotive and transportation sectors across key economies such as Brazil, Argentina, Colombia, and Chile.

As populations continue to grow and urban centers expand, the need for reliable and cost-effective mobility solutions is rising sharply, and ICE-powered vehicles remain the most accessible and widely adopted option due to their relatively low purchase cost, well-established fueling infrastructure, and proven reliability in diverse terrain and climatic conditions. In rural and remote areas, where electric vehicle (EV) infrastructure is scarce or non-existent, internal combustion engines are indispensable for both personal transportation and logistics, supporting regional trade, agriculture, and resource extraction industries. Moreover, the robust demand for commercial vehicles powered by ICEs—such as trucks, buses, and agricultural machinery—is further reinforced by ongoing government investments in road development, infrastructure modernization, and economic recovery programs aimed at boosting domestic production and logistics efficiency.

South America's abundant supply of biofuels, particularly ethanol and biodiesel, also plays a crucial role in supporting the ICE market, as these renewable fuels are compatible with existing ICE technologies and offer a more sustainable alternative to traditional fossil fuels. Brazil, in particular, has a long-standing ethanol-blending program that significantly reduces greenhouse gas emissions from internal combustion engines while maintaining their economic viability. Additionally, the region’s favorable policy environment, including import tariffs on electric vehicles and limited government subsidies for EV adoption, creates a competitive edge for ICE-powered vehicles in terms of affordability and availability.

Automotive manufacturers are responding by investing in regional assembly plants and optimizing ICE designs to comply with evolving fuel efficiency and emission standards, ensuring that vehicles remain both compliant and competitive. While global trends are shifting toward electrification, the high upfront cost of EVs, insufficient charging infrastructure, and energy grid limitations in many South American countries make ICEs the most practical solution in the short to medium term. Furthermore, the presence of major automakers with strong market penetration—such as Volkswagen, General Motors, Fiat, and Toyota—supports the continued development of ICE technologies tailored to local market needs, including flex-fuel engines and smaller displacement turbocharged engines that balance performance with fuel economy.

These factors, combined with the growing middle-class population, rising income levels, and increasing vehicle ownership rates, are expected to sustain strong demand for internal combustion engines across both consumer and commercial segments. In summary, the South American ICE market is being driven by a confluence of economic, geographic, and policy-related factors that make internal combustion engines the preferred powertrain option for a broad range of applications. With ongoing innovation, strong fuel supply chains, and infrastructure readiness, the ICE market in South America is well-positioned for continued growth despite the global momentum toward vehicle electrification.

Recent Developments 

• In May 2025, Toyota Industries Corporation is reportedly preparing to accept a tender offer from Toyota Motor Corporation. Both Toyota Motor and Toyota Industries, a key auto parts supplier, declined to comment on the report, stating that no official announcements have been made regarding the tender offer or related developments.
• In April 2025, Bosch showcased its comprehensive range of mobility solutions at the Advanced Clean Transportation (ACT) Expo in Anaheim. Highlighted innovations included new hydrogen injectors, compact fuel cell power modules, updated thermal management systems, and the Bosch Rexroth CryoPump enabling efficient liquid hydrogen refueling for up to 600 miles. Emphasizing a multi-technology approach, Bosch reaffirmed its commitment to supporting diverse commercial vehicle applications while advancing sustainability and reducing emissions.
• In February 2025, General Motors completed its acquisition of GM Cruise Holdings LLC, making Cruise a wholly-owned subsidiary. The integration aims to enhance GM’s Super Cruise system, currently operational on 750,000 miles of roads across North America. GM and Cruise will collaborate to advance autonomous and assisted-driving technologies, expand Super Cruise to urban streets, and accelerate progress toward personal autonomous vehicles by uniting Cruise’s expertise with GM’s software and engineering capabilities.

Key Market Players

• Volkswagen AG
• Toyota Industries Corporation
• Robert Bosch GmbH
• Shanghai Diesel Engine Co., Ltd.
• BMW AG
• General Motors
• AB Volvo
• AGCO Corporation

Report Scope:

In this report, the Global Internal Combustion Engine Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• Internal Combustion Engine Market, By Fuel Type:

o   Petroleum

o   Natural Gas  

• Internal Combustion Engine Market, By End-User:

o   Automotive

o   Marine

o   Aircraft  

• Internal Combustion Engine Market, By Region:

o   North America

§  United States

§  Canada

§  Mexico

o   Europe

§  France

§  United Kingdom

§  Italy

§  Germany

§  Spain

o   Asia-Pacific

§  China

§  India

§  Japan

§  Australia

§  South Korea

o   South America

§  Brazil

§  Argentina

§  Colombia

o   Middle East & Africa

§  South Africa

§  Saudi Arabia

§  UAE

§  Kuwait

§  Turkey

Competitive Landscape

Company Profiles: Detailed analysis of the major companies presents in the Global Internal Combustion Engine Market.

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