Why Do Cars Have Different Engines In Different Markets?

If you’ve looked at regional variations/specifications for cars in the past, then one thing you might have noticed is that what is fundamentally the same car can have different engines (or choices of engines) in different markets,

Sometimes, the engine is a totally different unit.

For example, on the 3rd generation WRX STI, the USDM and other export market version of Subaru’s legendary “rally rep” came with a 2.5 litre engine whereas the JDM spec car came with a 2.0 litre engine.

Here in New Zealand, where there are plenty of used JDM-spec imports, the 2.0 engine with its higher redline and more aggressive power delivery is generally seen as the more desirable option.

Other times, the engine has the same code/type, but there are subtle tweaks – anything from different turbos, to altered states of tune. An example of this is the Toyota Supra MK4. If you’ve read our Toyota Supra Mk4 buyer’s guide and model history, then you’ll know that there were differences in terms of exact engine components from region to region.

Sometimes there can be totally different lineups of engine options available in different markets.

But what are the reasons for this?

Surely – you would think – that it is easier for a manufacturer to offer the same car with the same engine everywhere in the world, as this would make for more economical production.

However, there are some good reasons why cars can have different engines in different markets, and in this article we outline why.

NB: When referring to different engines, we are referring to both single different engine options, as well as different ranges that might apply in various markets.

Environmental Legislation Issues

One reason why a car manufacturer might offer a different engine is because of environmental legislations and rules in various markets.

Some countries (and even states/regions within countries – e.g. California in the United States) can have stricter or less stringent environmental rules than others, relating to what is acceptable in terms of emissions, or even required fuel economy.

For example, here in New Zealand the government has recently introduced legislation that doesn’t strictly prohibit conventional new petrol and diesel cars, but adds additional fees versus hybrid and electric cars.

Toyota has responded to this by saying that in the near future they will be selling hybrid vehicles only in New Zealand (with the exception of a small number of performance cars like the Yaris GR and Corolla GR).

Therefore, with a car like the current Toyota Corolla – read our Toyota Corolla history guide here – the engine lineup might differ in New Zealand to another market like Japan. In NZ we currently get the non-hybrid, 2.0 petrol that comes with the base model Corolla, but very soon that engine option will disappear, but could be offered in other markets where there is less restrictive environmental legislation.

Not selling the Corolla in the NZ market because it’s harder to offer a basic non-hybrid engine would be crazy , so the solution is to offer a different lineup of engines in stead – this is the benefit of having the ability to provide different engines for different markets.

Tax And Other Financial and Legal Requirements

You’ve probably noticed that European and Japanese cars tend to have smaller displacement engines (often turbocharged petrol or Diesel engines, at least in recent years) than American cars.

This is because historically countries in Europe, as well as Japan, have tried to discourage larger and less efficient engines/cars by taxing more aggressively vehicles with larger displacement engines.

The most extreme form of response to this is probably the Japanese kei car, which combines engine displacement and physical size restrictions in order to avoid more aggressive taxation.

However, within specific models of car, you can also see different engine configurations designed to suit different markets and potentially minimise taxes, comply with other legal requirements, even make more sense from a financial perspective in terms of lower running costs and better fuel economy.

Take a car like the humble Honda Jazz.

Export models tended to come with a 1.5L engine, but here in New Zealand where we have many ex-Japanese domestic market Honda “Fit” on the road, many of these were fitted with a less powerful, more economical 1.3L engine. This smaller engine was considered by Honda to be more suitable and completely adequate for the Japanese market, where driving was more likely to be in urban environments at slower speeds.

Local Market Preferences

Market segmentation is critical for success in almost every business/industry, and the automotive sector is no exception.

A good example of this when it comes to engines is markets where petrol or diesel is respectively preferred.

For example, in New Zealand and Australia buyers have typically preferred to purchase 4x4s and off-road focused SUVs with Diesel engines, for towing and range.

Take the 100 Series Toyota Land Cruiser (which is known to American buyers as the Lexus LX470). The LX470 comes with a 4.7 litre petrol-powered V8 – and this engine option is available in the equivalent Toyota-branded car, as well as the few LX470s that were sold new in Australia and New Zealand. You can find 4.7 V8 Land Cruisers, but most buyers prefer one of the Diesel engine options, and diesel examples command a substantial price premium over petrol models. On the other hand, the LX470 that was really intended first and foremost for the US market was never offered with a Diesel engine, as Toyota must have calculated that American buyers would not have taken this option up in sufficient quantities.

Although the VW emissions scandal and “Dieselgate” (as well as increasingly harsh emission fees and penalties) have made Diesel engines less desirable in Europe in recent years, it was also more common for buyers in those markets to opt for Diesel engine options than petrol ones, versus what you might find in the American market.

For example, in the UK and continental Europe there are typically more diesel options – and more diesel-optioned cars sold – at least for cars made up until Dieselgate broke.

Recap

When a car manufacturer takes a vehicle and then changes the engine options/specifications for a different market, they are rarely doing so “just for the heck of it”.

Instead, there are several key reasons why a car maker might choose to take this course of action, ranging from environmental concerns and legislation, to local market preferences, down to what grade/type of fuel is available on the local market.

As with naming conventions for cars (learn here why cars have different names in different countries) there are rarely – if ever – any decisions made by car companies that are done so without profitability and selling more vehicles in mind!

Research and planning will have been done from the outset to try and determine which engine (or lineup of engines) will prove the most successful in terms of sales performance and return on investment.

If you have any more insights into the use of different engines in different markets, then feel free to leave a comment below … it would be great to hear from you.

5 thoughts on “Why Do Cars Have Different Engines In Different Markets?”

  1. Loved all that you shared in this post!

    Very useful! Thanks a lot, Sam!

    But why do car manufacturers use engines from other companies instead of making their own engines?

    Reply
    • Hi Elena, thanks for your comment.

      Typically manufacturers would look at this option if there is some kind of “joint venture” or shared ownership scenario. A car might also just be a rebadged and rebranded version of another manufacturer’s one. For example, in the 1990s and early 2000s Ford had a sizeable stake in Mazda. Therefore there were a number of Mazdas that were basically Fords (and vice versa).

      Long story short this approach allows the company to sell a wider variety of vehicles.

      Reply
      • Wow, new knowledge has been generated.

        I thought the reason why they did this was to save money :D.

        Thanks for your help, Sam!

        Btw, your post is great and detailed! Really appreciate it.

        Reply
        • Hi Elena,

          There can be a money saving component here, insomuch that if a manufacturer has an engine that is suited well to a particular market they might re-use that engine in a new car for that market.

          But ultimately it is about appealing to what buyers in a local area are likely to purchase.

          Reply

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