Manufacturing, autos and logistics
OEM (original equipment manufacturer)
In autos and machinery, the company that designs, assembles and brands the final product.
Last reviewedWhat does OEM (original equipment manufacturer) mean?
In the car industry, the OEM is the carmaker, such as Toyota, Volkswagen, Tata Motors or BYD, which designs, assembles, brands and sells vehicles. It buys most parts by value from suppliers and focuses on design, assembly, the brand and sales. Example: if a car sells to the dealer for 30,000 and the parts bought from suppliers cost 21,000, bought-in parts are 70 percent of the price. Be careful: in electronics and some other industries, OEM can mean the reverse, a firm that makes parts or products sold under someone else's brand, so check the context.
Where does it come up in case interview prep?
- How the automotive industry works: OEMs, suppliers and dealersLesson in Automotive and electric vehicles
- Car economics, electric vehicles and the automotive supply chainLesson in Automotive and electric vehicles
- Automotive players, EV adoption by region, trends 2024 to 2026, and how to crack the casesLesson in Automotive and electric vehicles
- How the defence and space industries workLesson in Defence and space
Related terms
- Tier 1 supplierA supplier that sells complete parts or systems directly to the carmaker.
- Vehicle platformA shared set of engineering underpinnings used for many car models.
- Value chainThe activities a firm performs to create and deliver value.
- Make-or-buy decisionChoosing whether to produce something in-house or buy it from a supplier.
- Battery pack costThe cost of an electric vehicle's battery pack, usually quoted per kWh of capacity.
- Installed baseThe number of a company's machines or systems currently in use at customers.
- AftermarketParts, service, repairs and upgrades sold after the original equipment.
- Backlog (order book)The value of orders a company has received but not yet delivered.