Definition and explanation Original Equipment Manufacturer (OEM)
An original equipment manufacturer (OEM ) is a manufacturer that supplies components or complete products for another manufacturer. In the automotive industry, the term OEM often also refers to the vehicle manufacturers themselves, i.e. brands such as Audi, BMW, Opel or Volkswagen
In other contexts, OEM refers exclusively to those companies that supply parts for new vehicles - i.e. the original manufacturers of these components. This contrasts with the aftermarket, where spare parts from third-party manufacturers are usually offered independently of the vehicle manufacturer. Specific examples of OEMs from the automotive industry are
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Volkswagen AG - produces vehicles of the VW, Audi, Škoda, Seat, Porsche and other brands.
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BMW Group - manufacturer of the BMW, Mini and Rolls-Royce Motor Cars brands.
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Mercedes-Benz Group AG - produces passenger cars and commercial vehicles under the Mercedes-Benz and Smart brands.
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Ford Motor Company - US OEM with production in several countries, including Ford and Lincoln.
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Toyota Motor Corporation - one of the world's largest automotive OEMs, with brands such as Toyota, Lexus and Daihatsu.
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Stellantis N.V. - manufacturer of Opel, Peugeot, Citroën, Jeep, Fiat and Alfa Romeo, among others.
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Hyundai Motor Company - Korean OEM, which also owns the Kia brand.
The supplier pyramid Tier 1
In the automotive industry, the supplier network is often depicted as a supplier pyramid, with the OEM at the top and tiered levels below (Tier 1, Tier 2, Tier 3, etc.) Tier 1 suppliers, also known as system or module suppliers, deliver finished assemblies or systems directly to the OEM. These components are usually developed to fit perfectly and must fulfil the high requirements of just-in-time production - such as seat modules, electrical systems or infotainment consoles.
Gestamp Automoción is a well-known Tier 1 example from the car body construction sector. Gestamp is a global automotive supplier that develops and produces complete structural body parts, doors, bonnets, bumper beams and safety components for OEMs such as Volkswagen, BMW, Daimler and Renault. As a Tier 1 supplier, Gestamp delivers these assemblies directly to vehicle manufacturers - often just-in-time and customised for specific vehicles. Other Tier 1 examples in the bodywork sector include
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Magna International - supplies complete body shell and structural components, in some cases even complete vehicle body shells.
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Thyssenkrupp Automotive Body Solutions - specialises in body modules and complex welded assemblies.
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Benteler Automotive - produces structural components such as cross members, crash management systems and frame elements.
These companies are directly below the OEMs in the supply chain and are responsible for a large part of the development work, tool production and series production.
Tier 2 & Tier 3 - sub-suppliers
Tier 2 are component suppliers that deliver parts or materials to Tier 1. Tier 3 are often suppliers of raw materials or basic parts that provide the resources for Tier 2.
FFT supports OEM and Tier 1 Turnkey partnership
In the production of various vehicle components, FFT supports various OEMs and Tier 1s in the automation of their manufacturing processes and thus makes a significant contribution to global automotive production in a turnkey partnership.
Quality & standardisation Economic and logistical importance
Collaboration with Tier 1 suppliers enables OEMs to reduce complexity and access specialised expertise. Systems such as modular sourcing or system sourcing efficiently transfer parts of development and production to Tier 1, while at the same time increasing dependency: supply bottlenecks or quality problems at a Tier 1 can have serious consequences for OEM production.
Many OEMs require their suppliers, especially Tier 1 suppliers, to be certified in accordance with the IATF 16949 quality standard, which is based on ISO 9001 and tailored to the specific requirements of the automotive industry. This standard ensures consistent quality and process stability and enables OEMs to recognise risks at an early stage - a prerequisite for long-term partnerships in a global network. We also work according to these quality standards and are certified in many areas.
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