Understanding OEM: What Is an Original Equipment Manufacturer?

OEM stands for "original equipment manufacturer" and was initially used to refer to a company that made a product that was rebranded and resold by another company. Today, the term OEM can refer to a manufacturer that provides the components used by another company or to a company that rebrands another company's products and sells them to its customers. This might seem confusing at first, but fortunately, the definitions tend to be consistent across multiple industries. 

For example, in the software industry, Microsoft provides PC manufacturers with a copy of the Windows operating system to install on their devices. Customers consider themselves to be buying a Dell or Alienware PC, but the OEM is Microsoft.

In the context of automotive parts, OEM refers to the manufacturer of the specific parts used to build a specific make and model of vehicle. Let's imagine a specific make and model of car rolls off the production line with Bosch spark plugs. If you needed to replace the spark plugs and bought the same type of Bosch plug, you'd be installing an OEM replacement part. If you chose the same specification of Autolite spark plug, they may be compatible, but they wouldn't be OEM.

OEM in products and services

Companies often choose to partner with OEMs to purchase products that serve the needs of their customers. They may buy individual components and assemble a product or purchase a prebuilt product. The company becomes a value-added reseller. In each of these cases, working with an OEM allows the company to focus on its key product or service, freeing it from the research and development associated with the OEM's product.

OEM in the automotive industry

In the automotive industry, OEM refers to an automotive manufacturer and the parts that it uses to make its vehicles. Sometimes, those parts are made by the company itself. Sometimes, they're purchased from other businesses. Any parts that are added or changed later and that are not from an official manufacturer would be considered aftermarket.

How OEM parts are made

OEM parts are usually made to a specific standard. Either the company making the product designs the parts to meet its unique requirements or it has an agreement with the third-party OEM to ensure the parts will be compatible with the product and operate within set tolerances.

OEM parts are typically considered to be of higher quality than aftermarket ones and are tested to ensure they meet the client's requirements. Some aftermarket parts can be reliable and high-quality. However, there's no guarantee they're built to the same specifications as the OEM parts. And if there are differences, it can be tricky to diagnose any problems that result from the use of aftermarket components.

Are auto manufacturers OEMs?
In the automotive industry, some people refer to Toyota, Subaru, Ford and other well-known manufacturers as OEMs. The more traditional definition, however, would be that the companies that are official suppliers to those manufacturers are the OEMs. When you're shopping for replacement parts, if you're able to source an exact replacement from either the manufacturer or the supplier, this would be an OEM part.

Examples of OEM parts
OEMs supply a variety of parts to car manufacturers. The ones motorists are most likely to encounter when making repairs or upgrades are:

• Exhaust systems

• Windows

• Electrical parts/sensors

• Brakes

• Spark plugs

• Batteries

• Engine control units

Some OEM manufacturers also make aftermarket parts. These may be offered as a cheaper replacement for a damaged part or as a high-performance upgrade.

How OEM parts ensure quality and performance

Car manufacturers have exacting quality control processes and need to know every car that rolls off the assembly line meets those standards. This mandate requires uniformity of parts and the need for the parts they're fitting to be reliable and hardwearing. 

Vehicles are designed so the OEM parts are a perfect fit. A compatible part may be sized to fit in the same hole or to accept the same connectors and current, but if the part is made from a different material or screws in a slightly different way, this could make it harder to fit, cause it to degrade more quickly, or otherwise mean that it doesn't work as expected.

OEM vs. aftermarket 

There are a lot of misconceptions when it comes to OEM vs. aftermarket parts. The quality of these parts can vary dramatically. Some may be be inferior to OEM components, while others could be the same product with a different badge.

In addition, fitting aftermarket parts does not automatically void your vehicle's warranty. In some cases, an automotive manufacturer can claim its proprietary systems must only be repaired with OEM parts, but only if it can demonstrate a reason for this requirement. In general, using quality parts from aftermarket manufacturers and fitting them correctly is acceptable.

Whether you choose to use OEM or aftermarket parts is up to you. Taking good care of your vehicle, servicing it regularly, and using quality oils and fuels are all more important than the specific brand of parts you use for repairs.