Off-Highway Vehicle Engine Market Size and Outlook 2031

Report Description

Forecast Period	2027-2031
Market Size (2025)	USD 32.08 Billion
CAGR (2026-2031)	6.51%
Fastest Growing Segment	51-80 HP
Largest Market	Asia Pacific
Market Size (2031)	USD 46.84 Billion

Market Overview

The Global Off-Highway Vehicle Engine Market will grow from USD 32.08 Billion in 2025 to USD 46.84 Billion by 2031 at a 6.51% CAGR. The Global Off-Highway Vehicle Engine Market encompasses the development and manufacturing of internal combustion and alternative propulsion systems designed for non-road mobile machinery, including construction, agricultural, and mining equipment. The primary drivers fueling growth in this sector are the substantial increase in government investments toward infrastructure development and the rising mechanization of agriculture to support global food security. According to the Indian Construction Equipment Manufacturers Association, in 2024, construction equipment sales volume increased by 26 percent driven by government infrastructure initiatives. These factors collectively ensure a sustained demand for high-performance power units capable of operating in rigorous industrial environments.

However, a significant challenge impeding market expansion is the stringent enforcement of emission standards such as EU Stage V and US Tier 4 Final. Compliance with these rigorous environmental mandates requires manufacturers to incur high research and development costs to produce cleaner engine technologies. This financial burden often results in increased equipment prices which can deter price-sensitive buyers in developing regions and forces manufacturers to continuously balance regulatory adherence with competitive pricing strategies to maintain profitability.

Key Market Drivers

The expansion of global construction and infrastructure development activities serves as a primary catalyst for the off-highway vehicle engine market. As nations prioritize urbanization, energy transition projects, and transportation networks, there is a sustained requirement for heavy machinery such as excavators and haulers equipped with high-durability powertrains. While some mature regions face cyclical adjustments, emerging markets continue to demonstrate robust demand for construction equipment, which directly sustains engine manufacturing volumes. For instance, according to Volvo Construction Equipment, January 2025, in the 'Fourth Quarter and Full Year 2024 Results', net sales in South America increased by 19 percent in the fourth quarter of 2024, underscoring the regional resilience supporting engine procurement. This continued investment in infrastructure ensures a baseline of demand for diverse engine ratings suitable for varying load requirements.

Simultaneously, increasing mechanization in the agricultural sector is significantly influencing market dynamics. The pressing need to enhance crop yields and address labor shortages is accelerating the adoption of tractors and harvesters, particularly in developing economies where manual labor is being replaced by machinery. This shift propels the production of agricultural engines designed for high torque and fuel efficiency to meet the operational needs of modern farming. According to CNH Industrial, February 2025, in the 'Fourth Quarter and Full Year 2024 Results', tractor demand in the Asia Pacific region increased by 10 percent in the fourth quarter of 2024. The overall health of the propulsion sector remains strong despite sectoral variations; according to Cummins Inc., in 2024, the company achieved record full-year revenues of $34.1 billion, reflecting the enduring value of advanced engine technologies across these industrial applications.

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Key Market Challenges

Strict enforcement of emission standards represents a substantial hurdle for the off-highway vehicle engine market. Compliance with rigorous mandates, such as EU Stage V and US Tier 4 Final, necessitates significant capital expenditure on research and development to engineer cleaner propulsion systems. Manufacturers must integrate complex exhaust after-treatment technologies, which directly increases the production cost of power units. This financial pressure often forces companies to raise the final price of machinery, which can discourage investment from price-sensitive buyers and slow fleet renewal rates in cost-conscious sectors.

The adverse effect of these rising costs and broader economic pressures is reflected in recent industry performance. According to the Association of Equipment Manufacturers, in 2024, total sales of agricultural tractors in the United States declined by approximately 14 percent compared to the previous year. This contraction in sales volume indicates that the higher costs associated with modern, compliant equipment can negatively impact buyer purchasing power. Consequently, manufacturers face the ongoing difficulty of maintaining sales volume while managing the costs required to meet environmental regulations.

Key Market Trends

The development of Hydrogen Internal Combustion Engines (H2-ICE) has emerged as a critical trend for powering heavy-duty machinery where battery-electric solutions face limitations regarding energy density and operational uptime. Manufacturers are increasingly modifying existing internal combustion architectures to run on hydrogen, providing a cost-effective zero-emission pathway that utilizes established supply chains and service knowledge. This approach allows off-highway fleets to decarbonize without the substantial weight penalties associated with large battery packs, making it particularly suitable for energy-intensive construction and mining operations. Demonstrating the commercial viability of this technology, according to JCB, January 2025, in the 'Landmark start to 2025 as JCB’s Hydrogen engine approved for use' press release, the company secured regulatory certification from 11 licensing authorities across Europe for its hydrogen combustion engines, enabling the immediate deployment of this technology in real-world industrial applications.

Simultaneously, the industry is shifting toward fuel-agnostic engine architectures, designed to maximize manufacturing flexibility and adapt to uncertain future fuel availability. This trend involves engineering a common base engine platform that can be fitted with different cylinder heads and fuel systems to operate on diesel, natural gas, or hydrogen depending on regional requirements. By adopting this modular strategy, Original Equipment Manufacturers (OEMs) can streamline production processes and offer customers a range of propulsion options without altering the fundamental equipment design. Highlighting the advancement of such future-proof platforms, according to AGCO Power, November 2025, in the 'AGCO Power Unveils Next-Generation Engines and Clean-Energy Vision at Agritechnica' press release, the newly launched CORE80 engine delivers 252 kW of power and is specifically engineered to support the transition to alternative fuels while maintaining high performance for agricultural machinery.

Segmental Insights

The 51-80 HP segment is currently experiencing the most rapid expansion within the Global Off-Highway Vehicle Engine Market, primarily driven by the surging demand for medium-duty agricultural tractors. This growth is heavily concentrated in the Asia-Pacific region, where widespread farm mechanization initiatives are compelling the adoption of machinery that balances efficiency with sufficient power for mid-sized cultivation. Unlike developed markets that often prioritize heavy-duty equipment, emerging economies increasingly rely on this versatile power band to modernize agricultural operations. Consequently, this specific requirement for medium-output engines in high-growth regions serves as the fundamental catalyst propelling the segment ahead of other power ranges.

Regional Insights

Asia Pacific leads the Global Off-Highway Vehicle Engine Market, primarily driven by robust infrastructure development and rapid industrialization in key economies like China and India. This dominance is further supported by the widespread mechanization of agriculture to address growing food production demands. Additionally, the implementation of stringent environmental mandates, such as the China IV non-road standards enforced by the Ministry of Ecology and Environment and India’s Bharat Stage norms overseen by the Ministry of Road Transport and Highways, promotes the adoption of advanced engine technologies. These combined factors solidify the region's status as the central force in global market expansion.

Recent Developments

In November 2024, Deutz AG joined a research consortium known as the PoWer project to advance the development of hydrogen engines for off-highway applications. Led by an automotive component manufacturer and supported by €5.1 million in funding from the German Federal Ministry for Economic Affairs and Climate Protection, the initiative aimed to explore hydrogen drive concepts for the construction and agricultural industries. The collaboration involved partners from vehicle manufacturing and research institutes who planned to test exhaust gas aftertreatment systems and analyze vehicle concepts to establish the viability of hydrogen combustion technology in non-road mobile machinery.
In May 2024, Volvo Penta presented its electric driveline technologies and battery energy storage subsystems for off-road machinery at the ACT Expo in Las Vegas. The company highlighted its collaboration with utility partners to provide scalable energy storage units intended to support both mobile charging and stationary power requirements. This initiative aimed to facilitate the adoption of electric heavy-duty vehicles by addressing infrastructure challenges. The display included practical applications of these subsystems, demonstrating the company's commitment to supporting the transition toward zero-emission power solutions in the construction and industrial sectors.
In April 2024, Cummins Inc. launched its Next Generation X15 diesel engine for the off-highway market during the Intermat trade fair in Paris. The new 15-liter engine was introduced as part of the company's HELM platform, which utilized a common base architecture to support multiple fuel types, including advanced diesel, natural gas, and hydrogen. This design allowed original equipment manufacturers to integrate different fuel systems with minimal changes to the machine's design. The engine was optimized to reduce total cost of ownership and emissions for heavy-duty construction machinery.
In February 2024, Perkins Engines demonstrated its latest power solutions for the rental and off-highway sectors at the ARA Show in New Orleans. The company showcased the 2600 Series, a new 13-liter diesel engine platform engineered to provide high power density and torque for heavy-duty applications. This platform featured eight power ratings ranging from 340 to 515 kW and was capable of delivering up to 3,200 Nm of peak torque. Perkins also highlighted its portfolio of engines certified for EU Stage V and U.S. EPA Tier 4 Final standards, designed to support construction and material handling equipment.

Key Market Players

Caterpillar, Inc.
Cummins, Inc.
Deere & Company
J C Bamford Excavators Ltd.
Mahindra & Mahindra Ltd.
Scania AB
KUBOTA Corporation
Volkswagen AG
Hitachi Construction Machinery Co., Ltd.
Komatsu Ltd.

By Construction & Mining Equipment Engines Power Output	By Agriculture Tractor Engines Power Output	By Engine Capacity	By Fuel Type	By Region
<100 HP 101-200 HP 201-400 HP and >400 HP	<30 HP 31-50 HP 51-80 HP 81-140 HP and >140 HP	<5l Engines 5l-10l Engines and >10l Engines	Diesel Gasoline and Others	North America Europe Asia Pacific South America Middle East & Africa

Report Scope:

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

Off-Highway Vehicle Engine Market, By Construction & Mining Equipment Engines Power Output:

<100 HP
101-200 HP
201-400 HP and >400 HP

Off-Highway Vehicle Engine Market, By Agriculture Tractor Engines Power Output:

<30 HP
31-50 HP
51-80 HP
81-140 HP and >140 HP

Off-Highway Vehicle Engine Market, By Engine Capacity:

<5l Engines
5l-10l Engines and >10l Engines

Off-Highway Vehicle Engine Market, By Fuel Type:

Diesel
Gasoline and Others

Off-Highway Vehicle Engine Market, By Region:

North America

United States
Canada
Mexico

Europe

France
United Kingdom
Italy
Germany
Spain

Asia Pacific

China
India
Japan
Australia
South Korea

South America

Brazil
Argentina
Colombia

Middle East & Africa

South Africa
Saudi Arabia
UAE

Competitive Landscape

Company Profiles: Detailed analysis of the major companies present in the Global Off-Highway Vehicle Engine Market.

Available Customizations:

Global Off-Highway Vehicle Engine Market report with the given market data, TechSci Research offers customizations according to a company's specific needs. The following customization options are available for the report:

Company Information

Detailed analysis and profiling of additional market players (up to five).

Global Off-Highway Vehicle Engine Market is an upcoming report to be released soon. If you wish an early delivery of this report or want to confirm the date of release, please contact us at [email protected]

Table of content

1. Product Overview

1.1. Market Definition

1.2. Scope of the Market

1.2.1. Markets Covered

1.2.2. Years Considered for Study

1.2.3. Key Market Segmentations

2. Research Methodology

2.1. Objective of the Study

2.2. Baseline Methodology

2.3. Key Industry Partners

2.4. Major Association and Secondary Sources

2.5. Forecasting Methodology

2.6. Data Triangulation & Validation

2.7. Assumptions and Limitations

3. Executive Summary

3.1. Overview of the Market

3.2. Overview of Key Market Segmentations

3.3. Overview of Key Market Players

3.4. Overview of Key Regions/Countries

3.5. Overview of Market Drivers, Challenges, Trends

4. Voice of Customer

5. Global Off-Highway Vehicle Engine Market Outlook

5.1. Market Size & Forecast

5.1.1. By Value

5.2. Market Share & Forecast

5.2.1. By Construction & Mining Equipment Engines Power Output (<100 HP, 101-200 HP, 201-400 HP and >400 HP)

5.2.2. By Agriculture Tractor Engines Power Output (<30 HP, 31-50 HP, 51-80 HP, 81-140 HP and >140 HP)

5.2.3. By Engine Capacity (<5l Engines, 5l-10l Engines and >10l Engines)

5.2.4. By Fuel Type (Diesel, Gasoline and Others)

5.2.5. By Region

5.2.6. By Company (2025)

5.3. Market Map

6. North America Off-Highway Vehicle Engine Market Outlook

6.1. Market Size & Forecast

6.1.1. By Value

6.2. Market Share & Forecast

6.2.1. By Construction & Mining Equipment Engines Power Output

6.2.2. By Agriculture Tractor Engines Power Output

6.2.3. By Engine Capacity

6.2.4. By Fuel Type

6.2.5. By Country

6.3. North America: Country Analysis

6.3.1. United States Off-Highway Vehicle Engine Market Outlook

6.3.1.1. Market Size & Forecast

6.3.1.1.1. By Value

6.3.1.2. Market Share & Forecast

6.3.1.2.1. By Construction & Mining Equipment Engines Power Output

6.3.1.2.2. By Agriculture Tractor Engines Power Output

6.3.1.2.3. By Engine Capacity

6.3.1.2.4. By Fuel Type

6.3.2. Canada Off-Highway Vehicle Engine Market Outlook

6.3.2.1. Market Size & Forecast

6.3.2.1.1. By Value

6.3.2.2. Market Share & Forecast

6.3.2.2.1. By Construction & Mining Equipment Engines Power Output

6.3.2.2.2. By Agriculture Tractor Engines Power Output

6.3.2.2.3. By Engine Capacity

6.3.2.2.4. By Fuel Type

6.3.3. Mexico Off-Highway Vehicle Engine Market Outlook

6.3.3.1. Market Size & Forecast

6.3.3.1.1. By Value

6.3.3.2. Market Share & Forecast

6.3.3.2.1. By Construction & Mining Equipment Engines Power Output

6.3.3.2.2. By Agriculture Tractor Engines Power Output

6.3.3.2.3. By Engine Capacity

6.3.3.2.4. By Fuel Type

7. Europe Off-Highway Vehicle Engine Market Outlook

7.1. Market Size & Forecast

7.1.1. By Value

7.2. Market Share & Forecast

7.2.1. By Construction & Mining Equipment Engines Power Output

7.2.2. By Agriculture Tractor Engines Power Output

7.2.3. By Engine Capacity

7.2.4. By Fuel Type

7.2.5. By Country

7.3. Europe: Country Analysis

7.3.1. Germany Off-Highway Vehicle Engine Market Outlook

7.3.1.1. Market Size & Forecast

7.3.1.1.1. By Value

7.3.1.2. Market Share & Forecast

7.3.1.2.1. By Construction & Mining Equipment Engines Power Output

7.3.1.2.2. By Agriculture Tractor Engines Power Output

7.3.1.2.3. By Engine Capacity

7.3.1.2.4. By Fuel Type

7.3.2. France Off-Highway Vehicle Engine Market Outlook

7.3.2.1. Market Size & Forecast

7.3.2.1.1. By Value

7.3.2.2. Market Share & Forecast

7.3.2.2.1. By Construction & Mining Equipment Engines Power Output

7.3.2.2.2. By Agriculture Tractor Engines Power Output

7.3.2.2.3. By Engine Capacity

7.3.2.2.4. By Fuel Type

7.3.3. United Kingdom Off-Highway Vehicle Engine Market Outlook

7.3.3.1. Market Size & Forecast

7.3.3.1.1. By Value

7.3.3.2. Market Share & Forecast

7.3.3.2.1. By Construction & Mining Equipment Engines Power Output

7.3.3.2.2. By Agriculture Tractor Engines Power Output

7.3.3.2.3. By Engine Capacity

7.3.3.2.4. By Fuel Type

7.3.4. Italy Off-Highway Vehicle Engine Market Outlook

7.3.4.1. Market Size & Forecast

7.3.4.1.1. By Value

7.3.4.2. Market Share & Forecast

7.3.4.2.1. By Construction & Mining Equipment Engines Power Output

7.3.4.2.2. By Agriculture Tractor Engines Power Output

7.3.4.2.3. By Engine Capacity

7.3.4.2.4. By Fuel Type

7.3.5. Spain Off-Highway Vehicle Engine Market Outlook

7.3.5.1. Market Size & Forecast

7.3.5.1.1. By Value

7.3.5.2. Market Share & Forecast

7.3.5.2.1. By Construction & Mining Equipment Engines Power Output

7.3.5.2.2. By Agriculture Tractor Engines Power Output

7.3.5.2.3. By Engine Capacity

7.3.5.2.4. By Fuel Type

8. Asia Pacific Off-Highway Vehicle Engine Market Outlook

8.1. Market Size & Forecast

8.1.1. By Value

8.2. Market Share & Forecast

8.2.1. By Construction & Mining Equipment Engines Power Output

8.2.2. By Agriculture Tractor Engines Power Output

8.2.3. By Engine Capacity

8.2.4. By Fuel Type

8.2.5. By Country

8.3. Asia Pacific: Country Analysis

8.3.1. China Off-Highway Vehicle Engine Market Outlook

8.3.1.1. Market Size & Forecast

8.3.1.1.1. By Value

8.3.1.2. Market Share & Forecast

8.3.1.2.1. By Construction & Mining Equipment Engines Power Output

8.3.1.2.2. By Agriculture Tractor Engines Power Output

8.3.1.2.3. By Engine Capacity

8.3.1.2.4. By Fuel Type

8.3.2. India Off-Highway Vehicle Engine Market Outlook

8.3.2.1. Market Size & Forecast

8.3.2.1.1. By Value

8.3.2.2. Market Share & Forecast

8.3.2.2.1. By Construction & Mining Equipment Engines Power Output

8.3.2.2.2. By Agriculture Tractor Engines Power Output

8.3.2.2.3. By Engine Capacity

8.3.2.2.4. By Fuel Type

8.3.3. Japan Off-Highway Vehicle Engine Market Outlook

8.3.3.1. Market Size & Forecast

8.3.3.1.1. By Value

8.3.3.2. Market Share & Forecast

8.3.3.2.1. By Construction & Mining Equipment Engines Power Output

8.3.3.2.2. By Agriculture Tractor Engines Power Output

8.3.3.2.3. By Engine Capacity

8.3.3.2.4. By Fuel Type

8.3.4. South Korea Off-Highway Vehicle Engine Market Outlook

8.3.4.1. Market Size & Forecast

8.3.4.1.1. By Value

8.3.4.2. Market Share & Forecast

8.3.4.2.1. By Construction & Mining Equipment Engines Power Output

8.3.4.2.2. By Agriculture Tractor Engines Power Output

8.3.4.2.3. By Engine Capacity

8.3.4.2.4. By Fuel Type

8.3.5. Australia Off-Highway Vehicle Engine Market Outlook

8.3.5.1. Market Size & Forecast

8.3.5.1.1. By Value

8.3.5.2. Market Share & Forecast

8.3.5.2.1. By Construction & Mining Equipment Engines Power Output

8.3.5.2.2. By Agriculture Tractor Engines Power Output

8.3.5.2.3. By Engine Capacity

8.3.5.2.4. By Fuel Type

9. Middle East & Africa Off-Highway Vehicle Engine Market Outlook

9.1. Market Size & Forecast

9.1.1. By Value

9.2. Market Share & Forecast

9.2.1. By Construction & Mining Equipment Engines Power Output

9.2.2. By Agriculture Tractor Engines Power Output

9.2.3. By Engine Capacity

9.2.4. By Fuel Type

9.2.5. By Country

9.3. Middle East & Africa: Country Analysis

9.3.1. Saudi Arabia Off-Highway Vehicle Engine Market Outlook

9.3.1.1. Market Size & Forecast

9.3.1.1.1. By Value

9.3.1.2. Market Share & Forecast

9.3.1.2.1. By Construction & Mining Equipment Engines Power Output

9.3.1.2.2. By Agriculture Tractor Engines Power Output

9.3.1.2.3. By Engine Capacity

9.3.1.2.4. By Fuel Type

9.3.2. UAE Off-Highway Vehicle Engine Market Outlook

9.3.2.1. Market Size & Forecast

9.3.2.1.1. By Value

9.3.2.2. Market Share & Forecast

9.3.2.2.1. By Construction & Mining Equipment Engines Power Output

9.3.2.2.2. By Agriculture Tractor Engines Power Output

9.3.2.2.3. By Engine Capacity

9.3.2.2.4. By Fuel Type

9.3.3. South Africa Off-Highway Vehicle Engine Market Outlook

9.3.3.1. Market Size & Forecast

9.3.3.1.1. By Value

9.3.3.2. Market Share & Forecast

9.3.3.2.1. By Construction & Mining Equipment Engines Power Output

9.3.3.2.2. By Agriculture Tractor Engines Power Output

9.3.3.2.3. By Engine Capacity

9.3.3.2.4. By Fuel Type

10. South America Off-Highway Vehicle Engine Market Outlook

10.1. Market Size & Forecast

10.1.1. By Value

10.2. Market Share & Forecast

10.2.1. By Construction & Mining Equipment Engines Power Output

10.2.2. By Agriculture Tractor Engines Power Output

10.2.3. By Engine Capacity

10.2.4. By Fuel Type

10.2.5. By Country

10.3. South America: Country Analysis

10.3.1. Brazil Off-Highway Vehicle Engine Market Outlook

10.3.1.1. Market Size & Forecast

10.3.1.1.1. By Value

10.3.1.2. Market Share & Forecast

10.3.1.2.1. By Construction & Mining Equipment Engines Power Output

10.3.1.2.2. By Agriculture Tractor Engines Power Output

10.3.1.2.3. By Engine Capacity

10.3.1.2.4. By Fuel Type

10.3.2. Colombia Off-Highway Vehicle Engine Market Outlook

10.3.2.1. Market Size & Forecast

10.3.2.1.1. By Value

10.3.2.2. Market Share & Forecast

10.3.2.2.1. By Construction & Mining Equipment Engines Power Output

10.3.2.2.2. By Agriculture Tractor Engines Power Output

10.3.2.2.3. By Engine Capacity

10.3.2.2.4. By Fuel Type

10.3.3. Argentina Off-Highway Vehicle Engine Market Outlook

10.3.3.1. Market Size & Forecast

10.3.3.1.1. By Value

10.3.3.2. Market Share & Forecast

10.3.3.2.1. By Construction & Mining Equipment Engines Power Output

10.3.3.2.2. By Agriculture Tractor Engines Power Output

10.3.3.2.3. By Engine Capacity

10.3.3.2.4. By Fuel Type

11. Market Dynamics

11.1. Drivers

11.2. Challenges

12. Market Trends & Developments

12.1. Merger & Acquisition (If Any)

12.2. Product Launches (If Any)

12.3. Recent Developments

13. Global Off-Highway Vehicle Engine Market: SWOT Analysis

14. Porter's Five Forces Analysis

14.1. Competition in the Industry

14.2. Potential of New Entrants

14.3. Power of Suppliers

14.4. Power of Customers

14.5. Threat of Substitute Products

15. Competitive Landscape

15.1. Caterpillar, Inc.

15.1.1. Business Overview

15.1.2. Products & Services

15.1.3. Recent Developments

15.1.4. Key Personnel

15.1.5. SWOT Analysis

15.2. Cummins, Inc.

15.3. Deere & Company

15.4. J C Bamford Excavators Ltd.

15.5. Mahindra & Mahindra Ltd.

15.6. Scania AB

15.7. KUBOTA Corporation

15.8. Volkswagen AG

15.9. Hitachi Construction Machinery Co., Ltd.

15.10. Komatsu Ltd.

16. Strategic Recommendations

17. About Us & Disclaimer

Report Description

Table of content

Figures and Tables

Frequently asked questions

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