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Concept
Original equipment manufacturer
Summary
An original equipment manufacturer (OEM) is generally perceived as a company that produces non-aftermarket parts and equipment that may be marketed by another manufacturer. It is a common industry term recognized and used by many professional organizations such as SAE International, ISO, and others.
However, the term is also used in several other ways, which causes ambiguity. It sometimes means the maker of a system that includes other companies' subsystems, an end-product producer, an automotive part that is manufactured by the same company that produced the original part used in the automobile's assembly, or a value-added reseller.
When referring to auto parts, OEM typically refers to the manufacturer of the original equipment, that is, the parts which are then subsequently assembled and installed during the construction of a new vehicle. In contrast, aftermarket parts are those made by companies other than the OEM, which might be installed as replacements or enhancements after the car comes out of the factory. For example, if Ford used Autolite spark plugs, Exide batteries, Bosch fuel injectors, and Ford's own engine blocks and heads when building a car, then car restorers and collectors consider those to be the OEM parts. Other-brand parts would be considered aftermarket, such as Champion spark plugs, DieHard batteries, Kinsler fuel injectors, and BMP engine blocks and heads. Many auto parts manufacturers sell parts through multiple channels, for example to car makers for installation during new-vehicle construction, to car makers for resale as automaker-branded replacement parts, and through general merchandising supply chains. Any given brand of part can be OEM on some vehicle models and aftermarket on others.
Microsoft is a popular example of a company that issues its Windows operating systems for use by OEM computer manufacturers via the bundling of Microsoft Windows. OEM product keys are priced lower than their retail counterparts, especially as they are purchased in bulk quantities, although they use the same software as retail versions of Windows.
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