Marine Engines Industry Outlook (Value and Volume): Current Analysis and Forecast (2021-2027)

Report Description

The marine transport sector is considered the pillar of international trade. According to the International Chamber of Shipping (United Kingdom), more than 90% of the global merchandise trade in terms of volume is conceded via sea/ocean. The cost of transportation via sea is considered cheaper compared to that of rail and road transport. Asia-Pacific is considered the leading supplier of manufactured goods, thus, the overall demand for container ships is significantly high in the Asia-Pacific region. Most shipbuilding companies, including manufacturers of propulsion systems and engines, are headquartered in the Asia-Pacific region. Thus, the demand for maritime transport services and the growth of the shipping industry in the Asia-Pacific region is expected to provide ample growth opportunity for the marine engines manufacturers during the forecast period 2021-2027.

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Thus, global marine engines industry is expected to register a CAGR of around 3.8% over the period of 2021-2027. With increasing international trade, demand for commercial cargo ships has increased in the past decade. This is providing ample growth opportunities for engine manufacturers to produce innovative and cost-efficient marine engines. Looking at the opportunities marine engine manufacturer are adopting various growth strategies to sustain in the growing market. For instance, in 2019, Hyundai Heavy Industries acquired a 55.7% stake in the Daewoo Shipbuilding & Marine Engineering (DSME) for US$ 1.08 billion. The acquisition is expected to strengthen the market position of Hyundai Heavy Industries. In the same year, MAN Diesel & Turbo SE won the contract to supply engines for a new harbor tug in Spain, which would be operated by P&O Reyser in the Port of Barcelona. Furthermore, in February 2019, MAN Diesel & Turbo received an order to supply 18 TIER II-compliant main engines for lane-meter RoRo vessels intended for operation in the Mediterranean Sea. To add on, Wärtsilä in the same year received an order to supply Castle Hill, Fraserburgh with a ship design, a Wärtsilä 32 main engine, and all equipment for the ship.

Some of the major players in the market include Hyundai Heavy Industries, Caterpillar, MAN SE, Mitsubishi Heavy Industries, Volvo Penta, Rolls-Royce, Cummins, Deutz AG, General Electric Company, Winterthur Gas & Diesel, Yanmar Co. Ltd.., Daihatsu Diesel Mfg. Co. Ltd., and Wärtsilä Corporation. Several M&As along with partnerships have been undertaken by these players to facilitate customers with hi-tech and innovative products/technologies.

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Insights Presented in the Report

“Amongst Power Range (HP), 10,201 HP dominated the market in 2020 in terms of”

Based on power range, the global marine engine market is bifurcated into 500-750 HP, 751-1360 HP, 1361-2700 HP, 2701-4761 HP, 4761-6800 HP, 6801-10200 HP, and Above 10200 HP. Current, engine with a power range Above 10,201 HP dominates the market (in terms of value), owing to their high price and increase usage in large size commercial and offshore ships as propulsion and auxiliary engines. An increase in demand for commercial vessels, offshore vessels, and cruise ships will positively impact the business scenario.

However, the fastest growth in value terms is expected from 750-1360 HP engines. These engines require lower capital costs, more compact installation, and more cost-effective rebuilds. These engines are reliable and offer durable power which is suitable for recreational boating applications, including superyachts and yacht support vessels. The rising recreational activities, marine sports, and growing tourism industry is propelling the demand for these engines.

“Amongst Type, Two-Stroke marine engines to witness highest CAGR during the forecast period”

Based on type, the market is bifurcated into two-stroke and four-stroke marine engines. In 2020, the two-stroke engine segment dominated the market (in value terms) and is expected to witness the highest CAGR growth during the forecast period. At the beginning of 2020, the total world fleet amounted to 98,140 commercial ships of 100 gross tons and above, equivalent to a capacity of 2.06 billion. In 2019, the global commercial shipping fleet grew by 4.1%, representing the highest growth rate since 2014, however, low growth was witnessed during the period 2004-2012. UNCTAD projects the volume of international maritime trade to decline by 4.1% in 2020. Global volume trade expanded by 0.5% in 2019, down from 2.8% in 2018, and reached 11.08 billion tons in 2019.

“Amongst Fuel, Heavy fuel oil lead market in 2020”

Based on fuel, the report segments the market into heavy fuel oil, intermediate fuel oil, marine diesel oil, marine gas oil, and other. In 2020, heavy fuel oil accounted for the major shar in the market. A high share of the segment can be credited to its increased application in medium and low-speed marine engines.

Heavy fuel oils (HFO) comprise large percentages of heavy molecules such as long-chain hydrocarbons and aromatics with long-branched side chains. HFO is black in color and is one of the most widely used marine fuels currently. The residual fuel incurred during the distillation of crude oil is known as HFO and its quality depends on the crude oil quality which has been used in the refinery. Furthermore, Heavy fuel oils (HFO) which is one of the most widely used marine fuels currently are blended with lighter fuels such as marine gasoline or marine diesel oil for achieving various specifications and quality levels.

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“APAC to witness significant growth during the forecast period”

The Asia Pacific with countries such as China, Japan, South Korea, India, and Australia among others is expected to dominate the marine engines market during the forecast period. China, Japan, and South Korea are considered the major manufacturing hubs for marine engines, providing ample growth opportunities for the manufacturer. Rising investments in shipbuilding and commercial freight transport in the key markets offer high-growth opportunities for the marine engines market in the Asia Pacific region. The growth of international marine freight transport paired with the rising number of ships are the major factor driving the demand for the marine engine in the Asia-Pacific region. In addition, Asia-Pacific handles more than 70% of the volume of the global cargo at the ports per year. In 2019, Hyundai Heavy Industries, one of the leaders of the South Korean shipbuilding industry, forecast new orders of US$15.9 billion.

Reasons to buy this report:

• The study includes market sizing and forecasting analysis validated by authenticated key industry experts.
• The report presents a quick review of overall industry performance at one glance.
• The report covers an in-depth analysis of prominent industry peers with a primary focus on key business financials, product portfolio, expansion strategies, and recent developments.
• Detailed examination of drivers, restraints, key trends, and opportunities prevailing in the industry.
• The study comprehensively covers the market across different segments.
• Deep dive regional level analysis of the industry.

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Research Methodology

Research Methodology for the Global Marine Engines Industry Analysis (2021-2027)

Analyzing the historical market, estimation of the current market, and forecasting the future market of the global marine engines industry were the three major steps undertaken to create and analyze the adoption of marine engines in major regions globally. Exhaustive secondary research was conducted to collect the historical market numbers and estimate the current market size. Secondly, to validate these insights, numerous findings and assumptions were taken into consideration. Moreover, exhaustive primary interviews were also conducted, with industry experts across the value chain of the global marine engines industry. Post assumption and validation of market numbers through primary interviews, we employed a top-down/bottom-up approach to forecasting the complete market size. Thereafter, market breakdown and data triangulation methods were adopted to estimate and analyze the market size of segments and sub-segments the industry pertains to. Detailed methodology is explained below:

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Analysis of Historical Market Size

Step 1: In-Depth Study of Secondary Sources:

Detail secondary study was conducted to obtain the historical market size of Marine Engines Industry through company internal sources such as annual report & financial statements, performance presentations, press releases, etc., and external sources including journals, news & articles, government publications, competitor publications, sector reports, third-party database, and other credible publications.

Step 2: Market Segmentation:

After obtaining the historical market size of the marine engines industry, we conducted a detailed secondary analysis to gather historical market insights and share for different segments & sub-segments for major regions. Major segments included in the report as power range, vessel, type, engine, and fuel. Further country-level analyses were conducted to evaluate the overall adoption of testing models in that region.

Step 3: Factor Analysis:

After acquiring the historical market size of different segments and sub-segments, we conducted a detailed factor analysis to estimate the current market size of marine engines industry. Further, we conducted factor analysis using dependent and independent variables such as various application and type of marine engines. A thorough analysis was conducted for demand and supply-side scenarios considering top partnerships, merger and acquisition, business expansion, and product launches in the marine engines industry across the globe.

Current Market Size Estimate & Forecast

Current Market Sizing: Based on actionable insights from the above 3 steps, we arrived at the current market size, key players in the global marine engines industry, and market shares of the segments. All the required percentage shares split, and market breakdowns were determined using the above-mentioned secondary approach and were verified through primary interviews.

Estimation & Forecasting: For market estimation and forecast, weights were assigned to different factors including drivers & trends, restraints, and opportunities available for the stakeholders. After analyzing these factors, relevant forecasting techniques i.e., top-down/bottom-up approach was applied to arrive at the market forecast about 2027 for different segments and sub-segments across the major markets globally. The research methodology adopted to estimate the market size encompasses:

• The industry’s market size, in terms of revenue (USD) and the adoption rate of marine engines industry across the major markets domestically
• All percentage shares, splits, and breakdowns of market segments and sub-segments
• Key players in the global marine engines industry in terms of products offered. Also, the growth strategies adopted by these players to compete in the fast-growing market

Market Size and Share Validation

Primary Research: In-depth interviews were conducted with the Key Opinion Leaders (KOLs) including Top Level Executives (CXO/VPs, Sales Head, Marketing Head, Operational Head, and Regional Head, Country Head, etc.) across major regions. Primary research findings were then summarized, and statistical analysis was performed to prove the stated hypothesis. Inputs from primary research were consolidated with secondary findings, hence turning information into actionable insights.

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Split of Primary Participants in Different Regions

Market Engineering

Data triangulation technique was employed to complete the overall market estimation and to arrive at precise statistical numbers of each segment and sub-segment of the global Marine Engines Industry. Data was split into several segments & sub-segments post studying various parameters and trends in the areas of power range, vessel, type, engine, and fuel in the global marine engines industry.

The main objective of the Global Marine Engines Industry Study

The current & future market trends of global marine engines industry were pinpointed in the study. Investors can gain strategic insights to base their discretion for investments from the qualitative and quantitative analysis performed in the study. Current and future market trends were determined the overall attractiveness of the market at a regional level, providing a platform for the industrial participant to exploit the untapped market to benefit as a first-mover advantage. Other quantitative goals of the studies include:

• Analyze the current and forecast market size of marine engines industry in terms of Volume (KW) and Value
  (USD). Also, analyze the current and forecast market size of different segments and sub-segments
• Segments in the study include areas of power range, vessel, type, engine, and fuel.
• Define and analysis of the regulatory framework for the marine engines industry.
• Analyze the value chain involved with the presence of various intermediaries, along with analyzing customer and competitor behaviors of the industry.
• Analyze the current and forecast market size of the marine engines industry for the major region.
• Major countries of regions studied in the report include Asia Pacific, Europe, North America, and Rest of the world.
• Company profiles of the marine engines industry and the growth strategies adopted by the market players to sustain in the fast-growing market
• Deep dive regional level analysis of the industry

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