Australia Diesel Engine Market

Australia Diesel Engine Market Overview:

The Australia diesel engine market size reached USD 6.62 Billion in 2024. Looking forward, IMARC Group expects the market to reach USD 10.58 Billion by 2033, exhibiting a growth rate (CAGR) of 4.80% during 2025-2033. Rising demand in the mining sector, increasing use in agricultural machinery, and expansion of road freight and logistics are propelling the market growth. Furthermore, preference for diesel engines in large commercial vehicles, and availability of aftermarket servicing and parts are accelerating the market growth. Apart from this, improvements in diesel engine efficiency and emissions control technologies, and limited penetration of alternative fuels in heavy-duty applications are contributing to the Australia diesel engine market share.

Australia Diesel Engine Market Trends:

Mining Sector Growth

Australia's mining sector remains a cornerstone of the national economy and a key driver of diesel engine demand. Remote and off-grid mining operations rely heavily on diesel-powered equipment such as haul trucks, excavators, and generators for continuous operation. The rising global demand for resources like iron ore, lithium, coal, and gold has fueled a mining boom, significantly increasing the need for high-capacity diesel gensets. This trend presents strong growth opportunities for diesel engine and genset manufacturers. In March 2024, BHP announced an AUD 1 billion expansion of its South Flank iron ore project in Western Australia, highlighting the sector's momentum and the continued reliance on diesel-powered machinery in remote areas. As new mining projects emerge and existing ones expand, diesel technology remains critical to ensuring operational efficiency, further accelerating growth in Australia’s diesel engine market.

Agricultural Machinery Demand

Diesel engines are at the heart of Australia's agricultural sector, with an enormous fleet of equipment servicing farm operations. Diesel's reliability and efficiency account for why the industry relies so much on diesel fuel, especially where there is no other source of energy available in far-off regions of farming. Efforts to enhance the energy efficiency of farm equipment have shown that enormous savings in diesel consumption can be achieved through measures such as proper machinery selection, staff training, and routine maintenance. These measures not only lower the operating cost but also enable the sustainability of the agricultural sector, underpinning the long-term demand for diesel engines in agriculture. As a result, diesel remains crucial for the agricultural sector, ensuring sustained demand for high-performance, energy-efficient machinery.

Freight and Logistics Expansion

The expansion of Australia's freight and logistics sector makes a significant contribution to demand for diesel engines, primarily due to the country's extensive distances and heavy use of road transport. The domestic freight task has increased strongly over the few decades, with road and rail freight now representing most domestic freight activity. Especially, road freight has seen enormous increases, with New South Wales seeing an estimated 86 billion ton kilometers in 2023–24, a record high. This type of growth demands a solid fleet of diesel-powered trucks and trailers to haul commodities efficiently across the country. The transport and logistics industry contributes over USD 50 billion per annum to the Australian economy and directly employs around 250,000 people, making it economically significant. Their adoption of diesel engines for power and efficiency by the industry assures their continued hegemony in Australia's freight and logistics operations.

Australia Diesel Engine Market Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the market, along with forecasts at the country and regional levels for 2025-2033. Our report has categorized the market based on power rating and end user.

Power Rating Insights:

• 0.5 MW–1 MW
• Up to 0.5 MW
• 2 MW–5 MW
• 1 MW–2 MW
• Above 5 MW

The report has provided a detailed breakup and analysis of the market based on the power rating. This includes 0.5 MW–1 MW, up to 0.5 MW, 2 MW–5 MW, 1 MW–2 MW, and above 5 MW.

End User Insights:

•  Automotive
  • On-Road
    • Light Vehicles
    • Medium/Heavy Trucks
    • Light Trucks
  • Off-Road
• • Industrial/Construction Equipment
  • Agriculture Equipment
  • Marine Applications
• Non-Automotive

A detailed breakup and analysis of the market based on the end user have also been provided in the report. This includes automotive [on-road (light vehicles, medium/heavy trucks, and light trucks) and off-road (industrial/construction equipment, agriculture equipment, and marine applications)] and non-automotive.

Regional Insights:

• Australia Capital Territory & New South Wales
• Victoria & Tasmania
• Queensland
• Northern Territory & Southern Australia
• Western Australia

The report has also provided a comprehensive analysis of all the major regional markets, which include Australia Capital Territory & New South Wales, Victoria & Tasmania, Queensland, Northern Territory & Southern Australia, and Western Australia.

Competitive Landscape:

The market research report has also provided a comprehensive analysis of the competitive landscape. Competitive analysis such as market structure, key player positioning, top winning strategies, competitive dashboard, and company evaluation quadrant has been covered in the report. Also, detailed profiles of all major companies have been provided.

Australia Diesel Engine Market News:

• In 2025, Rio Tinto conducted a four-week trial using a 20% renewable diesel blend across its Pilbara iron ore operations. Partnering with Neste and Viva Energy, the trial utilized 10 million liters of renewable diesel derived from used cooking oil, reducing Scope 1 emissions by approximately 27,000 tons.
• In 2024, BHP began a 12-month trial of a battery electric Toyota Hilux at its Port Hedland iron ore loading port in Western Australia. This initiative is part of BHP's broader strategy to electrify its fleet of 5,000 vehicles and reduce operational emissions by 30% by 2030.

Australia Diesel Engine Market Report Coverage:

Key Questions Answered in This Report:

• How has the Australia diesel engine market performed so far and how will it perform in the coming years?
• What is the breakup of the Australia diesel engine market on the basis of power rating?
• What is the breakup of the Australia diesel engine market on the basis of end user?
• What is the breakup of the Australia diesel engine market on the basis of region?
• What are the various stages in the value chain of the Australia diesel engine market? 
• What are the key driving factors and challenges in the Australia diesel engine market?
• What is the structure of the Australia diesel engine market and who are the key players?
• What is the degree of competition in the Australia diesel engine market? 

Key Benefits for Stakeholders:

• IMARC’s industry report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the Australia diesel engine market from 2019-2033.
• The research report provides the latest information on the market drivers, challenges, and opportunities in the Australia diesel engine market.
• Porter's five forces analysis assist stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the Australia diesel engine industry and its attractiveness.
• Competitive landscape allows stakeholders to understand their competitive environment and provides an insight into the current positions of key players in the market.