Market evolution: Gasoline engines (CN 840734) — 2015–2025

Introduction

This report analyses the EU's external trade in spark-ignition reciprocating piston engines of cylinder capacity above 1,000 cm³ (CN 840734) over the period 2015–2025. The product covers gasoline engines destined for passenger vehicles, commercial vehicles, and tractors, and is a bundled heading encompassing four subheadings — from engines intended for industrial vehicle assembly (84073410) to new engines above 1,500 cm³ (84073499) and even used engines (84073430).

Over the decade, the EU has remained a strong net exporter of these engines, maintaining a trade surplus throughout. However, beneath this headline stability, major structural shifts have occurred: volumes have contracted sharply, unit values have risen dramatically, key trade partners have been reshuffled by geopolitical events and trade agreements, and the intra-EU production landscape has been redrawn. The following sections unpack these dynamics.

1. Declining Volumes Masked by Surging Unit Values

Export and import volumes have fallen substantially over the decade

The most striking macro-level trend is the contraction of physical trade flows. EU extra-EU exports in mass terms declined from 416,812 tonnes in 2015 to 242,137 tonnes in 2025 (−41.9%), while imports fell from 153,246 tonnes to 102,103 tonnes (−33.4%). In value terms, the decline was more moderate: exports dropped from €5.71 billion to €4.44 billion (−22.3%), and imports from €1.90 billion to €1.68 billion (−11.5%). The EU's trade surplus thus narrowed from €3.81 billion to €2.75 billion (−27.7%).

The gap between the volume decline and the value decline points to one of the decade's defining features: a sharp increase in the unit value per tonne.

Unit prices have risen by roughly one-third, reflecting product-mix shifts and cost inflation

Export prices per tonne climbed from €13,700/t to €18,318/t (+33.7%), and import prices from €12,404/t to €16,483/t (+32.9%). This broad-based price appreciation likely reflects a combination of factors: a shift toward larger-displacement, higher-value engines; general cost inflation in materials and energy; and a possible selection effect whereby the engines that continue to be traded are increasingly premium units. The supplementary-unit data — which counts individual engines rather than tonnes — tells an even more dramatic story for exports: the per-engine export price surged from €284/piece in 2015 to €2,729/piece in 2025 (+862%), although this figure should be treated with caution given known reporting inconsistencies in the 2015 baseline for subheading 84073491 (whose supplementary quantity was recorded at 17.6 million pieces in 2015 versus roughly 350,000–640,000 in subsequent years). Import prices per piece rose more steadily, from €1,326/piece to €1,935/piece (+46%).

EU production volumes have declined even as production value has increased

The same volume-down, value-up pattern is visible in EU domestic production. According to PRODCOM data, the number of engines produced in the EU fell from 6.16 million units in 2015 to 4.00 million in 2025 (−35.0%), yet the total production value rose from €9.80 billion to €12.00 billion (+22.5%). This indicates that the average value per engine produced domestically increased significantly — consistent with a market that is producing fewer but more expensive engines, likely reflecting the broader electrification transition in which manufacturers are consolidating output into higher-margin powertrains while shifting investment toward electric motors and batteries.

2. Geopolitical Upheaval Reshapes the EU's Trade Partner Landscape

The United States remains the EU's dominant export market, while the United Kingdom has declined sharply

The United States has consistently been the EU's largest single export destination for gasoline engines, with trade values that fluctuated within a relatively narrow corridor: from €2.13 billion in 2015 to €2.03 billion in 2025 (−4.7%). The coefficient of variation for US-bound exports was just 0.12 — the lowest among all major partners — underscoring the deep integration of EU engine plants (particularly German and Austrian) into North American automotive assembly chains. Mexico, the second-largest destination, grew from €487 million to €763 million (+56.8%), reflecting the expansion of automotive manufacturing capacity in Mexico, partly supplied by EU-based engine plants.

By contrast, exports to the United Kingdom collapsed from €875 million in 2015 to just €223 million in 2025 (−74.5%). This steep decline coincides with Brexit and the introduction of new customs procedures and rules of origin. The UK's departure from the EU single market created friction in what had been a deeply integrated supply chain, and the data suggests a significant re-routing or reduction of engine shipments. A price shock was also detected on UK-bound exports in 2021 (abnormality 4.1, +65.1%), likely linked to the immediate post-transition-period disruptions.

Exports to Russia collapsed following the 2022 invasion of Ukraine

Russia was the EU's third-largest export market in 2015 at €359 million. By 2025, exports had fallen to just €1.8 million (−99.5%). The effective cessation of trade reflects the EU sanctions regime imposed following Russia's full-scale invasion of Ukraine in February 2022, combined with the withdrawal of Western automotive OEMs from the Russian market. The volatility data confirms the sharpness of this break: exports to Russia had a coefficient of variation of 0.65, driven almost entirely by the post-2022 collapse rather than pre-war instability.

Türkiye and China have emerged as rapidly growing import sources for the EU

On the import side, the most dramatic shifts involve Türkiye and China. Turkish engine exports to the EU surged from €29 million in 2015 to €349 million in 2025 (+1,114%), making Türkiye the third-largest import source by the end of the period. Chinese imports grew from €6.9 million to €83.7 million (+1,121%). These increases likely reflect both the expansion of engine manufacturing capacity in these countries (often by European or joint-venture OEMs) and the EU–Türkiye customs union framework that facilitates duty-free industrial goods trade. Meanwhile, traditional suppliers have retrenched: Japan (−55.7%), Korea (−40.3%), Mexico (−81.8%), and the United States (−86.4%) all saw substantial declines in their EU-bound engine shipments, suggesting a rebalancing of supply chains toward lower-cost or geographically proximate producers.

Import concentration has decreased while export concentration has risen

The Herfindahl-Hirschman Index (HHI) for imports fell from 3,499 to 2,860 (−18.3%), reflecting the diversification away from the United Kingdom toward Türkiye, China, and other suppliers. The UK still accounts for the largest single share of imports, but its dominance has eroded. Conversely, the export HHI rose from 1,912 to 2,579 (+34.9%), indicating that EU exports have become more concentrated on fewer destinations — principally the United States, which alone absorbed €2.03 billion of the €4.44 billion total in 2025 (roughly 46%). The loss of the Russia and UK markets has reduced destination diversification and increased the EU's dependence on North American demand.

3. Intra-EU Production Shifts: Germany Retreats, Austria and Italy Advance

Germany remains the EU's largest engine exporter but has experienced a sharp decline

Germany was by far the largest EU exporter of gasoline engines throughout the period, but its share has contracted significantly. German extra-EU exports fell from €2.95 billion in 2015 to €1.78 billion in 2025 (−39.6%), making Germany's absolute decline the largest of any member state. This mirrors the broader challenges facing the German automotive sector, including the accelerated shift to electric vehicles, increased competition, and the reconfiguration of global supply chains.

Austria and Italy have emerged as major engine exporters

Austria more than doubled its engine exports, rising from €606 million to €1.29 billion (+113%). With a revealed symmetric comparative advantage (RSCA) of 0.64 in 2025, Austria is the EU's second-most specialised exporter in this product, behind only Hungary (RSCA 0.80). Italy saw the most dramatic relative growth, surging from €48 million to €420 million (+774%). Spain, however, moved in the opposite direction, with exports plunging from €985 million to €265 million (−73.1%), suggesting a major restructuring or closure of engine production capacity in Spain.

Slovakia has become a major engine importer, reflecting its role as an assembly hub

Among EU importers, the most notable shift was Slovakia, which saw imports rise from €59 million to €426 million (+622%). Slovakia hosts major vehicle assembly plants (Volkswagen, Kia, Stellantis), and the surge in engine imports likely reflects the country's growing role as a recipient of engines produced outside the EU for installation in locally assembled vehicles. By contrast, Italy (−91.9%), France (−62.4%), and the Netherlands (−66.8%) saw steep declines in engine imports, consistent with the contraction of gasoline engine demand in the context of Europe's accelerating vehicle electrification.

Central European economies display the highest specialisation in engine exports

The specialisation analysis for 2025 reveals a clear Central European core of engine-specialised economies. Hungary leads with an RSCA of 0.80 (RCA 8.78), followed by Austria (RSCA 0.64, RCA 4.51), Poland (RSCA 0.51, RCA 3.06), and Slovakia (RSCA 0.36, RCA 2.13). These countries host large-scale engine manufacturing plants operated by German, French, and Korean OEMs, and their specialisation reflects deliberate industrial-location strategies. By contrast, most Western and Southern European economies show little or no specialisation, and several smaller member states (Croatia, Latvia, Greece, Ireland, Estonia) have near-zero RCA values, confirming that engine production is heavily geographically concentrated within the EU.

Conclusion

The EU's trade in gasoline engines over 2015–2025 tells a story of a market in structural transition. Physical volumes have contracted by 30–40% on both the export and import sides, consistent with the broader European shift away from internal combustion engines toward electrified powertrains. Yet the value of trade has held up better, as unit prices have risen by roughly one-third — reflecting both inflationary pressures and a product mix that is tilting toward higher-value engines.

Geopolitical events have left deep marks on trade patterns. The near-total cessation of exports to Russia (post-2022 sanctions) and the dramatic decline in UK-bound trade (post-Brexit) have reduced the EU's export diversification and increased reliance on the US market. On the import side, Türkiye and China have rapidly gained market share at the expense of Japan, Korea, and North America. Within the EU, the production footprint has shifted meaningfully: Germany's dominance has eroded, while Austria and Italy have gained ground, and Central European economies — Hungary, Poland, Slovakia — have consolidated their role as the specialised engine-production core of the continent. The coming years will likely see these trends intensify as the EU's regulatory framework tightens emissions standards and the automotive industry accelerates its electric transition.