Original equipment manufacturer (OEM)

Original equipment manufacturer (OEM)

Original equipment manufacturer (OEM) is a company that produces parts and equipment for other companies that use them in their products. They mainly sell their products on a business to business model. The term is widely used in the automotive and technology sector.

In the car industry, OEM is the original producer of parts that car companies use in a new vehicle. For example, Huf is an OEM that offers car companies like Ford and BMW products for unlocking, locking and starting their vehicles. OEMs work closely with the car manufacturers who then assembles the original parts into a vehicle. Because of this cooperation, OEM parts are fully compatible with that vehicle. When replacing vehicle components the customer can often choose between OEM parts and aftermarket parts that are not made by the OEM but might be installed as replacements.

In the computer industry, OEM is the original producer of parts or software used in a computer. For example, Intel is an OEM that produces processors for many computer manufacturers.

Synonym(s):
  • contract manufacturer