Motor Vehicle Gasoline Engine and Engine Parts Manufacturing (U.S.) — NAICS 336310

An investor's primer for public-market and private investors

1. Overview

This industry makes the gasoline engines that power most American cars and light trucks, and the precision parts inside them — pistons, piston rings, valves, turbochargers, fuel-injection systems, timing chains, and the castings and machined components that go with them. It is a foundational tier of the auto supply chain: when a vehicle rolls off a U.S. assembly line with an internal-combustion engine (ICE — an engine that burns fuel in cylinders rather than running on a battery), the engine and its guts came from establishments classified here.

Why an investor cares: this is a large, cash-generative manufacturing base — roughly $39 billion in annual shipments [1] — that sits at the center of a slow, contested transition. Electric vehicles (EVs) are eroding the long-run market for gasoline engines, but that shift has decelerated sharply, hybrids (which still use a gasoline engine) are gaining, and the roughly 289 million vehicles already on U.S. roads [2] guarantee decades of replacement-parts demand. The result is an industry that is structurally challenged but nearer-term more durable than 2021-era forecasts assumed.

Ways in differ by investor type. Public-market investors can buy a handful of listed component and aftermarket suppliers, but there is no pure "U.S. gasoline-engine" stock — the largest engine producers are either captive divisions of automakers or privately held. Private investors and private-equity firms have been the more active owners here; the sector's single biggest engine-parts maker (Tenneco) was taken private in 2022 [3].

2. What it is and how it's structured

The U.S. Census Bureau defines NAICS (North American Industry Classification System) code 336310 as establishments that manufacture or rebuild motor-vehicle gasoline engines and engine parts, and that make or rebuild carburetors, pistons, piston rings, and engine valves — whether or not for vehicle use. This explicitly includes gasoline engines for hybrids, cylinder heads, crankshafts, manifolds, fuel-injection systems, mechanical fuel/oil/water pumps, timing gears and chains, and intake and exhaust valves [4].

What it excludes (each sits in an adjacent code):

• Diesel and stationary engines → NAICS 333618, Other Engine Equipment Manufacturing (this is where most of Cummins and Caterpillar's engine work lands, not here) [4].
• Transmissions and drivetrain/power-train equipment → NAICS 336350 [4].
• Electrical/electronic engine equipment and wiring harnesses → NAICS 336320 [4].
• Steering and suspension parts → 336330; radiators → 336390; rubber/plastic belts and hoses without fittings → 326220 [4].
• Final vehicle assembly → NAICS 336111/336112 (that is where an automaker's overall output is counted).

Ownership mix. Three distinct kinds of players share this code:

1. Captive engine plants of the automakers — General Motors, Ford, Stellantis, Toyota, and Honda cast and machine engines in dedicated U.S. plants. By volume these are the largest gasoline-engine producers in the country, but as businesses they are divisions of much larger, vertically integrated manufacturers, not standalone companies you can invest in.
2. Independent original-equipment (OE) component suppliers — firms like BorgWarner, PHINIA, Tenneco, Garrett Motion, and Germany's Mahle that sell engine parts and sub-systems to automakers for new-vehicle production.
3. Aftermarket parts makers and remanufacturers — firms like Standard Motor Products and Dorman Products that supply replacement engine parts for vehicles already on the road, plus engine rebuilders.

The production chain starts with castings, forgings, bar stock, powdered metals, aluminum, and engineered plastics. Plants then perform high-tolerance machining, heat treatment, surface coating, grinding and honing, inspection, and assembly. Suppliers normally design parts jointly with an automaker around a specific engine family, fund or share specialized tooling, pass lengthy validation and production-part approval processes, and deliver against just-in-time schedules. The resulting business is capital- and engineering-intensive, with high switching costs during a vehicle program but fierce price competition when the next program is awarded.

3. How big it is

Federal statistics (our ground-truth figures):

Reading the concentration numbers. The top four firms make roughly 46% of shipments, and the top twenty make 82% [1] — so this is a top-heavy industry dominated by large plants. Yet the HHI (a standard concentration gauge; the U.S. Department of Justice treats below 1,000 as unconcentrated) is only 663 [1], meaning no single firm is dominant. In plain terms: a handful of big producers (mostly the automakers' own engine plants and the largest tier-one suppliers) sit above a long tail of ~600 smaller machine shops, casters, and rebuilders. The SBA (Small Business Administration) draws its small-business line at a high 1,050 employees [7], reflecting how capital- and labor-intensive engine work is.

Employment trend. The decline from 61,615 jobs in 2023 [5] to 52,700 in May 2026 [6] — roughly a 14% drop — reflects ongoing consolidation and the early effects of powertrain-mix shifts, though year-to-year comparisons across different federal surveys should be read cautiously.

Undercount caveat — and why it mostly doesn't apply here. Unlike industries dominated by government agencies or by tiny sole proprietors (which the business census misses), engine manufacturing is well captured: it is large-plant, incorporated, payroll-employing work. Two subtleties are worth flagging honestly. First, a large share of U.S. gasoline-engine value is embedded inside vertically integrated automakers whose primary classification is vehicle assembly (336111/336112), so this code understates the total economic activity of "making engines" in America. Second, these are domestic-production figures; a substantial volume of engines and engine parts is imported, so U.S. consumption of this category exceeds the ~$39 billion produced here [1].

4. The investable universe

There is no listed pure-play U.S. gasoline-engine maker. The closest public exposures are component and aftermarket suppliers whose revenues span combustion, hybrid, and (increasingly) EV parts. Approximate scale figures are total-company revenue, not the U.S.-336310 slice.

Takeaway for public investors: exposure is indirect and blended. BorgWarner and PHINIA give the most direct combustion-content exposure; Garrett Motion offers turbocharger-specific exposure; Dorman and SMP are aftermarket plays tied to the installed vehicle fleet rather than new-car build rates. BorgWarner names Bosch, Denso, Garrett Motion, Magna, Valeo, and Schaeffler as major competitors and notes it also competes with vertically integrated customers [8]. For private investors: this is where control ownership concentrates. Private equity (Apollo's Tenneco) and family/foundation ownership (Mahle, Kolbenschmidt) hold the largest engine-parts platforms; opportunities include buyouts of tier-one suppliers being spun out of larger groups, aftermarket and remanufacturing roll-ups (fragmented, cash-generative, fleet-driven), and direct ownership of specialized casting/machining shops in the long tail.

5. How the money works

This is classic cyclical manufacturing, and owners make money on volume, capacity utilization, and content per engine — not on any single high-margin product.

• Two revenue streams with very different economics. OE (original equipment) sales — parts sold to automakers for new vehicles — run on multi-year platform contracts, are high-volume, and carry thin single-digit operating margins with contractual annual price-downs (customers demand a small price cut each year). Aftermarket sales — replacement parts for vehicles already on the road — are higher-margin and steadier, priced on catalog breadth and parts coverage rather than build volume.

• Capacity utilization is the swing factor. Engine plants and machining lines carry heavy fixed costs (castings, forging, precision CNC machining). Profit is highly sensitive to how full the plant runs: at high utilization, incremental units drop straight to margin; when auto build rates fall, fixed costs get spread over fewer units and margins compress fast. This is why the industry's earnings track vehicle production cycles closely.

• Input costs, tariffs, and pricing asymmetry. Steel, aluminum, and purchased castings are the main variable costs. In 2025, 25%–50% U.S. tariffs on steel, aluminum, and auto parts added an estimated ~$30 billion of cost across the auto industry [13]; most tier-one suppliers pass a large share to automakers, but the negotiation squeezes already-tight supplier margins. BorgWarner, for example, recorded $108 million of incremental tariff expense in 2025 and imported approximately $918 million of goods into the United States, with 68% of that value originating in Mexico, 9% in Canada, and 6% in South Korea [8]. Pricing power is asymmetric: automakers expect annual price reductions, while recovery of raw-material and other inflation is commonly delayed and below full cost [8].

• Illustrative margins. No NAICS-level margin data exists, but diversified-company results illustrate the economics. BorgWarner reported a 2025 gross margin of 18.7%, a GAAP operating margin of 3.7%, and an adjusted operating margin of 10.7%; the gap included significant impairment and restructuring items [14]. PHINIA reported 2025 gross profit of $762 million on $3.5 billion of sales (roughly 22% gross margin) and operating income of $254 million [9]. These are global, multi-segment figures — not representative of this NAICS alone — but they show the thin-margin, high-volume nature of the business.

• Customer concentration. A few automakers buy most OE output and impose annual price reductions, capping pricing power. BorgWarner's ten largest customers generated 71% of its 2025 sales; Volkswagen represented 13% and Ford 12% [8].

• Content per engine is the offsetting lever. Tightening efficiency rules push more hardware onto each ICE — turbochargers, direct injection, variable valve timing. That raises the dollar content a supplier can sell per engine even as total engine volumes plateau, which is why combustion-parts revenue has held up better than unit trends alone would suggest.

• The aftermarket cushion. With the average U.S. vehicle now 12.8 years old and 289 million light vehicles in operation [2], replacement demand for engine parts is large and relatively recession-resistant — older vehicles need more repairs, and that demand is decoupled from new-vehicle sales.

6. What drives demand

• U.S. light-vehicle production. OE engine-parts demand rises and falls with vehicle build rates. U.S. light-vehicle sales ran at roughly a 16-million-unit annualized pace in the first half of 2025, easing toward ~14 million in the second half [15]. Domestic auto and light-truck assemblies were running at a 10.48-million-unit seasonally adjusted annual rate in June 2026 [16].
• The ICE-versus-electric mix. ICE vehicles were about 74% of new U.S. sales in early 2025, down from more than 97% in 2016 [17]. About 22% of U.S. light-duty sales in 2025 were conventional hybrids, battery-electric vehicles, or plug-in hybrids combined; battery-electric and plug-in models together represented roughly 9% [18]. Critically, battery-electric vehicles were only 2% of the registered light-duty fleet in 2024 [18] — meaning the installed base remains overwhelmingly combustion-powered. Every point of share lost to fully electric vehicles is a point of lost gasoline-engine demand.
• Hybrids — a genuine tailwind. Hybrids still contain a gasoline engine, and hybrid share has been rising as pure-EV enthusiasm cools; automakers are expanding hybrid line-ups and extending ICE programs [19]. Conventional hybrids still require gasoline engines, pumps, injectors, pistons, rings, valves, and thermal-management hardware; many plug-in hybrids do as well. Hybridization can therefore preserve or increase the value of sophisticated gasoline-engine content even as pure-ICE unit share declines. Garrett Motion projects light-vehicle gasoline turbocharger penetration growing until 2032 and remaining above its 2020 level beyond 2036 [10]. This is the single most important near-term support for the industry.
• The installed fleet (aftermarket). 289 million vehicles in operation, aging steadily [2], drive a durable stream of replacement-parts demand independent of new-car cycles. The benefit is uneven: durable modern engines may need fewer major rebuilds, while direct injection, turbocharging, and complex emissions systems increase the cost and technical content of failures.
• Fuel prices and miles driven influence both new-vehicle mix (toward or away from efficiency) and aftermarket wear.

7. Regulation

Federal efficiency and emissions rules are the industry's dominant policy variable, and the regulatory trajectory shifted materially in 2025–2026.

• EPA GHG standards rescinded. In February 2026, the EPA finalized the rescission of the federal greenhouse-gas endangerment finding and the vehicle GHG standards that depended on it [20]. EPA explicitly stated the action did not remove traditional-air-pollutant requirements [21]. This removes the most binding federal electrification pressure, though it does not eliminate state-level rules.
• CAFE standards. The National Highway Traffic Safety Administration (NHTSA) set Corporate Average Fuel Economy (CAFE) standards in a 2024 rule raising required fuel economy about 2% per year for model years 2027–2031 [22]. That rule remains the published final rule, but a replacement was proposed in December 2025 and had not been finalized as of mid-2026 [23].
• California waivers disapproved. Congressional resolutions signed in June 2025 disapproved California waivers supporting Advanced Clean Cars II and related vehicle rules [24]; California continues to litigate aspects of the federal action [25].
• EV tax credits eliminated. Federal EV consumer tax credits (up to $7,500) were eliminated after September 30, 2025 [17].
• The two-sided effect. Tighter rules historically threaten ICE volumes long-term but, near-term, force more efficiency content onto each engine — raising supplier dollar-content per unit. The current lighter-touch federal regime extends the runway for gasoline engines beyond what the 2024 rules implied — a meaningful upside for the industry.
• Policy is unusually unstable. Repeated reversals shorten planning visibility, complicate powertrain capital allocation, and raise the probability of assets being built for standards that later change. For investors, this is not simply regulatory relief — it introduces a different kind of uncertainty.

8. Competitive dynamics and consolidation

The engine-parts tier has been consolidating and re-sorting for a decade, driven by scale economics and the need to separate declining-ICE assets from growth-EV assets:

• Tenneco + Federal-Mogul (2018), then Apollo take-private (2022). Tenneco absorbed Federal-Mogul's powertrain business (the pistons/rings/valves franchise) in 2018, then was taken private by Apollo Global Management in a ~$7.1 billion deal in 2022 [3] — pulling the largest engine-parts platform off the public market.
• BorgWarner's realignment. BorgWarner bought Delphi Technologies (2020) to add power electronics, then in 2023 spun off its fuel-systems and aftermarket business as PHINIA [26] — a deliberate split of "combustion cash cow" from "electrification growth."
• Aftermarket roll-ups. Standard Motor Products acquired Europe's Nissens (~$388 million) in 2024 to broaden its aftermarket footprint [12]; Dorman continues to expand parts coverage organically [11].
• Structure. The result is a barbell: a few global tier-one suppliers with scale and engineering depth, the automakers' captive plants, and a long tail of smaller casters, machine shops, and rebuilders. Competition is on cost, quality/reliability, and — increasingly — on which suppliers can fund both ICE obligations and the EV pivot at once.

9. Risks

• Secular EV transition. The core long-term risk: pure electric vehicles need no gasoline engine and far fewer engine parts. Every share point ceded to EVs permanently shrinks the addressable market. The substitution risk is nonlinear: a battery-electric vehicle removes nearly all gasoline-engine content, whereas a hybrid preserves most of it.
• Cyclicality. Earnings swing hard with vehicle-production cycles because of high fixed costs and thin OE margins; a downturn in auto build compresses margins quickly. Suppliers incur fixed labor and overhead even when an automaker stops taking parts.
• Customer concentration and price-downs. A few automakers buy most OE output and impose annual price reductions, capping pricing power.
• Input costs and tariffs. Steel/aluminum tariffs and volatile commodity costs squeeze already-tight margins [13]. Trade exposure is substantial: tariffs, USMCA rules, border disruption, and currency movements can matter more than spot metal prices alone.
• Labor risk. Skilled-machinist scarcity, wage inflation, union negotiations, and customer shutdowns create operational risk. BorgWarner specifically identifies the dependence of Ford, General Motors, and Stellantis on UAW-represented facilities and cites the production disruption caused by the 2023 strikes [8].
• Stranded-asset and capital-allocation risk. Money spent on ICE-specific tooling could be stranded if electrification re-accelerates; suppliers funding both ICE and EV simultaneously face capital strain.
• Regulatory volatility. Repeated federal reversals complicate long-term planning and capital allocation, even when the immediate direction is industry-favorable.
• Other material risks. Recalls and warranty claims, launch failures, sole-source castings or semiconductors, customer insourcing, supplier insolvency, and environmental liabilities from machining fluids and solvents.
• Aftermarket is cushioned but not immune. The large aging fleet insulates replacement demand for years, but as EVs age into the repair market, engine-specific aftermarket content declines.

10. How to invest and the outlook

Public routes. There is no clean U.S. gasoline-engine stock. The practical menu: BorgWarner (BWA) and PHINIA (PHIN) for combustion-and-transition component exposure; Garrett Motion (GTX) for turbocharger-specific exposure; Dorman (DORM) and Standard Motor Products (SMP) for aftermarket exposure geared to the installed fleet rather than new-car build; and diversified tier-one suppliers as broader auto-supply proxies. Investors weigh these on cyclical earnings, free-cash-flow generation, and dividends typical of mature industrials — and should judge each name by how much of its revenue is tied to declining pure-ICE content versus hybrids, EVs, and aftermarket.

Private routes. This is where control ownership concentrates. Private equity (Apollo's Tenneco) and family/foundation ownership (Mahle, Kolbenschmidt) hold the largest engine-parts platforms; opportunities include buyouts of tier-one suppliers being spun out of larger groups, aftermarket and remanufacturing roll-ups (fragmented, cash-generative, fleet-driven), and direct ownership of specialized casting/machining shops in the long tail. Private diligence should reconstruct revenue by engine family, customer, geography, and end channel; separate OE, original-equipment service, and independent aftermarket sales; identify which parts survive in hybrids; test customer ownership of tooling; quantify pass-through lags; and model plant utilization under program run-off. A seller's "powertrain" revenue should never be accepted as equivalent to this NAICS without a product-level bridge.

Near-term outlook (forward-looking judgment). The bear thesis — terminal decline as EVs take over — has softened. EV adoption has slowed, the federal EV tax credit ended in late 2025 [17], the EPA rescinded its GHG vehicle standards in 2026 [20], and consumers are leaning back toward ICE and hybrids [19]. Hybrids in particular keep gasoline engines in production while raising efficiency content per engine. Combined with a 289-million-vehicle aftermarket that grows more valuable as the fleet ages [2], the near-term picture is one of resilience: flatter, longer ICE volumes than once feared, with the best-positioned owners being those tied to hybrids, efficiency content, and replacement parts rather than pure legacy engine blocks. Long-term (forward-looking judgment): the structural direction is still down for pure gasoline engines; the investment question is duration and cash harvest, not growth — which is precisely why private capital, comfortable underwriting managed decline for cash flow, has been the more natural owner.

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Sources

1. U.S. Census Bureau. 2022 Economic Census — Concentration Ratios / Selected Statistics, NAICS 336310 (receipts $38.97B; firms 610; CR4 45.7%, CR8 64.8%, CR20 82.0%, CR50 92.5%; HHI 662.8). 2022. https://data.census.gov
2. S&P Global Mobility. U.S. Vehicle Age Rises Again to 12.8 Years in 2025 (289 million light vehicles in operation). 2025. https://press.spglobal.com/2025-05-21-U-S-Vehicle-Age-Rises-Again-to-12-8-Years-in-2025,-According-to-S-P-Global-Mobility
3. Apollo Global Management. Apollo Funds Complete Acquisition of Tenneco (~$7.1B enterprise value; $20.00/share). 2022. https://www.apollo.com/insights-news/pressreleases/2022/11/apollo-funds-complete-acquisition-of-tenneco-134627289
4. U.S. Census Bureau. NAICS 2022 — 336310 Motor Vehicle Gasoline Engine and Engine Parts Manufacturing (definition and exclusions). 2022. https://www.census.gov/naics/?input=336310
5. U.S. Census Bureau. County Business Patterns 2023, NAICS 336310 (employment 61,615; establishments 696; annual payroll $4.31B). 2023. https://www.census.gov/programs-surveys/cbp.html
6. U.S. Bureau of Labor Statistics. Establishment Employment, NAICS 336310 (52,700 jobs, May 2026, not seasonally adjusted). 2026. https://www.bls.gov/ces/data/employment-and-earnings/2026/table1b_202605.htm
7. U.S. Small Business Administration. Table of Size Standards (NAICS 336310 = 1,050 employees). 2023. https://www.sba.gov/document/support-table-size-standards
8. BorgWarner Inc. Form 10-K, FY2025 (net sales ~$14.3B; 82% Foundational, 18% eProducts; customer concentration; tariff exposure; competitor disclosure). 2026. https://www.sec.gov/Archives/edgar/data/908255/000090825526000011/bwa-20251231.htm
9. PHINIA Inc. Form 10-K, FY2025 (net sales $3.483B; gross profit $762M; operating income $254M). 2026. https://www.sec.gov/Archives/edgar/data/1968915/000196891526000023/phin-20251231.htm
10. Garrett Motion Inc. Form 10-K, FY2025 (gasoline turbocharger penetration forecast to 2032+, citing S&P data). 2026. https://www.sec.gov/Archives/edgar/data/1735707/000173570726000009/gtx-20251231.htm
11. Dorman Products, Inc. Reports Fourth Quarter and Full Year 2024 Results (net sales ~$2.01B). 2025. https://investors.dormanproducts.com/news/news-details/2025/Dorman-Products-Inc.-Reports-Fourth-Quarter-and-Full-Year-2024-Results-Issues-2025-Guidance/default.aspx
12. Standard Motor Products, Inc. Fourth Quarter and 2024 Year-End Results (~$1.46B revenue); SMP Completes Acquisition of Nissens Automotive (~$388M). 2024–2025. https://www.smpcorp.com/newsroom/financial/smp-releases-fourth-quarter-and-2024-year-end-results/
13. Supply Chain Dive / Detroit News. Tariffs on steel and aluminum mean higher costs for the auto industry (~$30B of 2025 industry cost; 25%–50% duties). 2025. https://www.supplychaindive.com/news/trump-tariffs-steel-aluminum-automotive-industry-production/739945/
14. BorgWarner Inc. Press Release: Fourth Quarter and Full Year 2025 Results (gross margin 18.7%; GAAP operating margin 3.7%; adjusted operating margin 10.7%). 2026. https://www.sec.gov/Archives/edgar/data/908255/000090825526000009/a20251231ex991pressrelease.htm
15. Omdia (Informa). June U.S. Light Vehicle Sales — 16.4 Million SAAR (first-half 2025 ~16.2M annualized, easing to ~14.2M). 2025. https://omdia.tech.informa.com/om144346/june-us-light-vehicle-sales-defy-headwinds-with-164-million-saar-but-tariff-risks-loom
16. Federal Reserve. G.17 Industrial Production and Capacity Utilization (domestic auto/light-truck assemblies 10.48M SAAR, June 2026). 2026. https://fred.stlouisfed.org/release/tables?eid=50089&rid=13
17. Alliance for Automotive Innovation. 2025 EV/Get Connected data (ICE ~74% of new U.S. sales vs. >97% in 2016; federal EV tax credit ends 9/30/2025). 2025. https://www.autosinnovate.org/posts/press-release/2025-q2-get-connected-press-release
18. U.S. Energy Information Administration. About 22% of U.S. light-duty vehicle sales in 2025 were hybrids, EVs, or PHEVs (BEV+PHEV ~9% of 2025 sales; BEV 2% of registered fleet in 2024). 2026. https://www.eia.gov/todayinenergy/detail.php?id=67144
19. EY. Global consumers driven back to ICE vehicles as EV enthusiasm cools (50% of buyers intend to purchase ICE; automakers extending ICE/hybrid programs). 2025. https://www.ey.com/en_gl/newsroom/2025/12/global-consumers-driven-back-to-ice-vehicles-as-ev-enthusiasm-cools
20. U.S. Environmental Protection Agency. Final Rule: Rescission of Greenhouse Gas Endangerment Finding and Vehicle GHG Standards. February 2026. https://www.epa.gov/regulations-emissions-vehicles-and-engines/final-rule-rescission-greenhouse-gas-endangerment
21. U.S. Environmental Protection Agency. Fact Sheet: Rescission of GHG Endangerment Finding (traditional-air-pollutant requirements remain). February 2026. https://www.epa.gov/system/files/documents/2026-02/420f26001.pdf
22. National Highway Traffic Safety Administration. Corporate Average Fuel Economy Standards for Model Years 2027 and Beyond (Federal Register; ~2%/yr for MY2027–2031). 2024. https://www.federalregister.gov/documents/2024/06/24/2024-12864/corporate-average-fuel-economy-standards-for-passenger-cars-and-light-trucks-for-model-years-2027
23. National Highway Traffic Safety Administration. CAFE Standards Rulemaking Page (December 2025 proposal; January 2026 hearing). 2025–2026. https://www.nhtsa.gov/corporate-average-fuel-economy/final-rule-cafe-standards-mys-2027-2031-passenger-cars-and-light
24. U.S. Environmental Protection Agency. EPA Transmits Four California Waiver Rules to Congress (congressional disapproval of Advanced Clean Cars II waivers, June 2025). 2025. https://www.epa.gov/newsreleases/epa-fulfills-statutory-obligation-transmitting-four-california-waiver-rules-congress
25. California Attorney General. Attorney General Bonta Files Lawsuit Challenging Trump Administration's Latest Attack on California's Clean Air Standards. 2025. https://oag.ca.gov/news/press-releases/attorney-general-bonta-files-lawsuit-challenging-trump-administrations-latest
26. BorgWarner Inc. BorgWarner Announces Completion of PHINIA Spin-Off. 2023. https://www.prnewswire.com/news-releases/borgwarner-announces-completion-of-phinia-spin-off-301869042.html