Glossary of automotive terms

Aftermarket (Replacement Market)
All products and services used in the repair and maintenance of vehicles.
Aftermarket part
Goods not for use as originalequipment in the production of light-duty vehicles or heavy-duty vehicles, ie. products and services used in the repair and maintenance of these vehicles.
Agent or broker
An intermediary with legal authority tooperate on behalf of the manufacturer.
American Automobile Labelling Act (AALA)
Regulations requiring vehicle manufacturers to include content information on vehicle labels for cars and trucks for sale in the U.S. after October 1, 1994.
Anti-lock braking system (ABS)
System that automatically controls wheel slip or prevents sustained wheel-locking on braking.
Asia Pacific Economic Cooperation (APEC)
An organization established in 1989 to promote tradeand investment in the Pacific Basin. APEC now comprises eighteen countries located in and around the Pacific Ocean:Australia, Brunei, Canada, Chile, China, Hong Kong, Indonesia, Japan, Malaysia, Mexico, New Zealand, Papua New Guinea, the Philippines, Singapore, South Korea, Taiwan, Thailand, and the United States.
Association of South East Asian Nations (ASEAN)
An organization of states (including Brunei, Myanmar, Burma, Indonesia, Laos, Malaysia, the Philippines, Singapore, Thailand, and Vietnam) founded in 1967 to present an united front that addresses the political, economic, and strategic dynamics of the region.
Auto Pact base year
With respect to the Auto Pact, the12 month period beginning on August 1, 1963, and ending onJuly 31, 1964.
Auto Pact Canadian value added
The aggregate of the costs of parts, material, labour costs, and transportation costs that are reasonably attributed to the production of vehicles or parts by manufacturers producing vehicles in Canada.
Automated Guided Vehicle System (AGVS)
Vehicles equippedwith automatic guidance equipment which follow a prescribed path, stopping at each machining or assembly station for manual loadingand unloading of parts.
Autodealership or auto dealer
A retail outlet that carries one (or in some cases in the U.S., a number of) manufacturer's product line and sells to general consumers and fleetoperators. The outlet will also provide service andsell parts for the brand of vehicle that it carries. In some instances, a dealer may dual for another manufacturer's product line.
Four-wheeled passenger motor vehicle having aseating capacity for not more than 10 people including police carsand racing cars but not including ambulances or hearses.
Auto parts store
Jobber and retail auto parts stores which primarily sell automotive products and conduct business at theretail level.
Average weekly earnings
Gross taxable payrolls dividedby the number of employees.
Big Three
General Motors, Ford and Chrysler.
Body shop
Service outlet specializing in vehicle bodyrepair work.
Passenger motor vehicle or chassis having a seating capacity for more than 10 people.
Buying decisions
The act of determining whether or not aproduct purchase or repair, will be made, and/or which product or service will be purchased.
Canada-U.S. Free Trade Agreement (FTA)
Implemented in January 1989 to eliminate all tariffs on U.S. and Canadian goods by January 1998 and to reduce or eliminate many non-tariff barriers.
Canadian Automotive Repair and Service Council (CARS)
A not-for-profit organization established to serve the human resource and training needs of the Canadian car and truck repair and service industry.
Canadian cross border shopping
Cross border shoppingdescribes the purchasing by Canadian consumers of products inthe United States. Of particular interest is the decision bythese buyers to obtain their products in the U.S., even though similar products are available in the Canadian market.
Canadian Environmental Protection Act (CEPA)
Act where the goal is pollution prevention and protection of Canadians from toxic substances.
Maximum production attainable underconditions. With regard to conditions, the company'soperating practices are to be followed with respect to the use ofproduction facilities, overtime, work shifts, holidays, etc.
Capital Expenditures
Expenditures to acquire or add tocapital assets that will yield benefits over several accountingperiods. Included are cost of procuring, construction,installing new durable plants, machinery and equipment where for replacement, addition or for lease or rent to othercompanies including subsidies.
Captive Import
An imported motor vehicle or part manufactured by another automaker usually for sale under thebrand name of the importer.
A process technology that delivers a liquid molten metal into a purpose-built mould. After cooling, the solid metal surface has the shape of the mould cavity.
Census value added
Residual representing the differencebetween the value of goods and industrial services produced andthe direct material costs associated with the production ofgoods.
The refitting of equipment to either neutralize the effects of the just completed production or to prepare equipment for production of the next scheduled item, or both.
Climate Change
The international concern that increasing concentrations of greenhouse gases (GHGs) in the atmosphere are changing the climate in ways detrimental to our social and economic well-being.
A raw material, ingredient, part or subassembly that goes into a higher level assembly, compound, or other item.
Component assembly
A combination of two or more parts or sub-components to form an assembly.
Component Design
The activity for the design of specific components including responsibility formaterial, cost, weight, reliability, durability, function, appearance, serviceability.
Concept Vehicle
A current production vehicle modified for installation of new design concepts for evaluation of environmental functional feasibility.
Consumer factors
Demographic characteristics of consumersincluding age, gender, income and geographic location,affordability.
Corporate Average Fuel Economy (CAFE)
Regulation enactedin 1975 which requires a motor vehicle manufacturer to classify its U.S. vehicle fleet sales as either domestic or import forthe purpose of fuel economy averaging.
Cost of production
Actual cost to the manufacturer ofproducing a vehicle (does not include mark-up).
Customs duties
Customs duties levied on imported goods underthe Customs Tariff.
Days' Supply
Number of days needed to sell all vehicles in inventory, based on the previous month's sales rate.
A firm that buys and sells, adding some value for the consumer in the process. Dealer often means a firm which operates closer in the distribution channel to the consumer thana distributor or wholesaler, and may add more value for consumers than either of the above-mentioned terms.
Dealer principal
The individual or corporation that ownsand controls one or a number of auto dealerships.
Solid or hollow form used for shaping materials bystamping, pressing, extruding, drawing or threading.
The way in which innovations spread throughmarket or non-market channels.
Synonymous with wholesalers; distributorsperform many of the same functions as wholesalers, such as selling,physical distribution, credit, etc. Some industries use the term distributor instead of wholesaler.
Distribution channel
Is the path goods take as their title transfers from producer to consumer. The title transfer for consumer goods is usually accompanied by transfer of the physicalgoods, as well.
Do-it-Yourself Market (DIY)
The vehicle maintenance andrepairs conducted by the vehicle owner or friend/relative whopurchase auto parts from a retail outlet.
A vehicle produced in Canada, United States or Mexico.
Door rates
The hourly rates charged by dealers on standardized units of service work. Hourly rates may or maynot correspond to an actual hour of work.
Duty drawback
Import duties or taxes repaid by a governmentin whole or in part, when the imported goods are re-exported orused in the manufacture of exported goods.
Duty paid value
In respect to imported goods, is theaggregate value for duty on imported goods.
Duty waiver
Forgiveness, in whole or in part, of importduties when certain conditions are met.
Electric Vehicle
Cars, buses, vans or trucks which use dedicated or hybrid electric systems as their power source.
Total employment in each manufacturing facility,including total manufacturing employees, total support staff, and total engineering/R&D staff.
Average number of workers employed by an establishment during theyear. Production workers relate to the average number actually engaged in the manufacturing process. Administrative and non-manufacturing includes employees at head offices and sales offices.
Employee Benefits
The provision of direct (salary, bonuses, etc.) indirect (vacation leave, medical anddental plans, etc.) and deferred employee compensation(pensions, etc.).
Smallest operating entity producing a homogenous set of goods and services and is capable of reporting full range of production account variables to calculate"value-added".
Free Trade Agreement of the Americas (FTAA)
An effort to unite the economies of the Western Hemisphere into a single free trade arrangement. The Heads of State of the 34 democracies in the region agreed to construct a "Free Trade Area of the Americas" and to complete negotiations for the agreement by 2005.
Finance & control
Ownership of company(ie. Canadian, U.S., Japanese, German, etc.);public or private; capital investments: buildings, machineryand equipment, tooling programs.
A business or institution comprising soleproprietorships, partnerships, companies and other formsof organizations.
Fixed or One Price Selling
published fixed price displayed on a new vehicle eliminating need for negotiation.
Device for holding goods in process while workingtools are in operation that does not contain any specialarrangements for guiding the working tools.
Fleet sales
The purchase of vehicles by a business that meet a minimum requirement of units sold.
Prediction of future production or sales in the automotive industry.
A process that transforms solid metal into shapesof varying cross-sectional material thickness, often involvingheating.
Establishment that has the right to exercise the powers of a corporation.
G7 (Group of Seven)
Seven industrial countries consisting of the United States, Japan, Germany, France, the United Kingdom, Italy and Canada, whose leaders havemet at annual economic summits since 1975 to coordinate economic policies.
General Agreement on Tariffs and Trade (GATT)
Signed in 1947, the GATT was a formal multilateral agreement aimed at expanding and liberalizing world trade. The World Trade Organization which is the successor to the GATT came into existence on January 1, 1995.
Generalized Preferential Tariff (GPT)
System of non-reciprocal tariff preferences for the benefit of developing countries. It grants duty-free or preferential entry to imports for eligible developing countries up to a certain dollar value or importpercentage limit.
Greenhouse gases (GHGs)
Group of gases which individually act to trap solar energy near the earth. GHGs for which emission levels have been estimated are carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), sulphur hexafluoride (SF6), carbon tetrafluoride (CF4), carbon hexafluoride (C2F6) and hydrofluorocarbons (HFCs).
Grey market
The grey market describes the purchase byintermediaries of product which is not supplied to them by the"authorized" distribution channel of the supplier. Thus, a warehouse club in Canada that sells a stereo bought in theU.S. or elsewhere from other than the manufacturer issupplying grey market goods. While grey market productsare frequently the same as would be available from conventionalchannels in Canada, the grey market assumes responsibility forservice or repair where the manufacturer declines this support.
Gross Vehicle Weight (GVW)
Maximum legal weight at which a vehicle can be operated.
Heavy-duty truck
Vehicle weighing from 26,001 to 33,001lbs. Also included off-highway trucks.
Ignition System
Electrical system devised to produce timed sparks from engine spark plugs. Consisting of abattery, induction coil, capacitor, distributor, spark plugs and relevant switches and wiring.
An organization that typically operates at armslength or under contractual agreement with manufacturers to bring products made in another country into Canada.
Import Nameplate
Vehicles sold by manufacturers primarilylocated outside North America whether assembled Overseas or inNorth America.
Independent Repair Shop
Small service outlet offering specialized repair services. They usually do not sellgasoline.
Intellectual Property Rights (IPR)
The right to possess or control the use of intellectual property, such as trademarks, copyrights, patents and trade secrets.
Interchannel competition
Rivalry between differentchannels of the distribution system. For example, independent retailers competing with manufacturers' outlets.
Firm or organization that operates betweenthe producer of the goods and the end purchaser. Thus, themembers of the distribution channel noted above are intermediaries or "middlemen".
Intrachannel competition
Rivalry between channel participants at the same level in the distribution channel. For example, department stores competing with one another.
Book value of inventory owned and held in Canada.
Device used in the accurate machining of good inprocess by holding the goods firmly and guiding tools exactly toposition.
Joint Venture
An international business collaboration between foreign interests and private parties from a host country in which two or more parties establish a new business enterprise to which each contributes and where ownership and control are shared.
Just-in-Time (JIT)
Refers to the movement of material tothe necessary place at the necessary time. It is part of abusiness philosophy based on achieving excellence in a manufacturing company through the continuous eliminationof waste.
Kaizen Activities
Activity through which continuous improvement is sought.
Kyoto Protocol
International agreement among industrialized countries to reduce greenhouse gas emissions negotiated in Kyoto, Japan in December 1997. Canada committed to reduce its greenhouse gas emissions by 6 percent of 1990 levels between 2008 and 2012.
Form of contract transferring the use of a vehicle in consideration of payment.
Light truck
Vehicle weighing less than 14,000 lbs.
Light vehicles
Passenger cars and light trucks.
Loss Leaders
Products whose prices are cut with the idea that they will attract customers to the store.
Brand name of a car or truck (ie. Chevrolet, Ford, Dodge, Honda).
Manufacturer's Suggested Retail Price (MSRP)
Dealers typically sell at a discount to this price.
An operation which shapes metal parts by carvingaway excess material as chips produced in a sequential process ofturning, milling and grinding operations.
Process technology (i.e. metal forming,machining, injection moulding, blow moulding, die casting,forgings, electronics/electrical, assembly, coating/plating);capacity utilization (in percent); production volumes; strategicalliances (eg. joint ventures, technology agreements).
Margin or gross margin
The return an intermediary achieveson the selling price of the article. That is, if theintermediary buys a product for $1 and sells it for $1.50,the margin is calculated. For example, .50 divided by$1.50, or 33%.
Market share
The percentage of total sales represented by an individual manufacturer/importer, make or nameplate.
The return an intermediary achieves on the cost price of an article. Using the same exampledescribed above, mark-up is .50 divided by $1, or 50%.
Maquila (maquiladora)
Mexican assembly plant located near the U.S.-Mexican border where most production is exported to the United States.
Mechanic installed market (MIL)
Vehicle maintenance andrepair conducted by a mechanic/professional at a service outlet.
Medium-duty truck
Vehicle weighing from 14,001 to26,000 lbs.
The southern cone common market of Argentina, Brazil, Paraguay, and Uruguay. Mercosur enacted a common external tariff on January 1, 1995 for almost 85 percent of tariff items of the four countries; most tradeamong members will be duty-free.
Metal forming
Solid metal and molten metal process suchas casting, forging, stamping and machining.
Methylcyclopentadienyl Manganese Tricarbonyl (MML)
MMT is an organic manganese compound. It is used as a fuel additive designed to enhance octane levels in gasoline.
Model line
Group of motor vehicles having the same platformor model name.
Model name
Word, group of words, letter, number or similar designation assigned to a motor vehicle by a marketing divisionof a motor vehicle assembler.
Most-Favoured-Nation (MFN) Treatment
One country's commitment to extend to another country the lowest tariff rates that it applies to any third country.
Motor Vehicle Saftey Act (MVSA)
Act which regulates the manufacture and importation of motor vehiclesand motor vehicle equipment to reduce risk of death, injury and damage to property and the environment.
Hollow form, matrix or cavity into which materialsare placed to produce goods of desired shapes.
Net sales value
The selling price received by themanufacturer for the vehicle including the cost of transporting the vehicle in Canada (includes mark-up).
New car dealer
Major car dealership with a parts andservice operation.
North American Free Trade Agreement (NAFTA)
Agreement creating free trade among the United States,Canada, and Mexico. The NAFTA went into effect on January 1, 1994.
North American Industrial Classification System (NAICS)
Industry Classification between Canada, the United States and Mexico to increase compatibility of data with these countries. The classification is based on establishment rather than commodity. This classification system will be implemented with reference to year 1997 and data will be available in 1999.
North American produced
Motor vehicles assembled inCanada, the United States or Mexico.
Off-Highway Vehicle
Vehicle intended for operation onunmade surfaces or rough terrain (i.e. for constructionor agriculture).
On Board Diagnostics (OBD)
A unit that monitors the Electric Control Unit and system responses for errors during vehicle operations. When the vehicle is serviced, this information on the errors can be down loaded and displayed to the service personnel which will facilitate the trouble shooting process.
Operating profit
Pre-tax earnings after deducting alloperating expenses from gross margin.
Organization for Economic Co-operation and Development (OECD)
An organization whose purpose is to provide its 29 Member countries with a forum in which governments can compare their experiences, discuss the problems they share and seek solutions which can then be applied within their own national contexts. Each member country is committed to the principles of the market economy and pluralistic democracy.
Synonymous with vehicle dealership.
The situation where maximum global production of automobiles exceeds the total global demand for automobiles.
Includes pay received for the number of hoursworked in excess of the standard workday or workweek.
Partnership for a New Generation of Vehicles (PNGV)
Established in 1993, this partnership, between the United States Federal Government and the Automotive industry, was founded to establish global technical leadership in the development and production of affordable, fuel-efficient, low emission vehicles that meet today's performance standards.
Passenger vehicle
Four wheeled motor vehicle that also includes mini-vans and sport utility vehicles.
Plastic moulding
A process that converts organic-based materials, by means of a general-purpose press and purpose-builttooling under controlled heat and pressure, and injects the hot material into a die cavity shaped in the final form of theintended part.
Primary load-bearing structural assembly of a motor vehicle determining the basic size of the motor vehicle,and is the structural base that supports the drive line and links the suspension components of the motor vehicle.
Pneumatic Tire
Flexible, hollow rubber forming theouter part of the vehicle wheel and inflated by air pressure.
Product design
The process of planning the product'sspecifications.
Product planning
A function whereby an enterprise is responsible for the efficient, planning, scheduling andcoordination of production activities.
Product testing
Rigorous methods whereby a product'squality and durability are measured.
Production engineering
Planning and control of themechanical means of changing the shape, condition of materialstoward greater effectiveness and value.
Relative measure of output per labour and/or machine output.
Program cars
Automobiles sold by manufacturers for fleetuse. Usually applies to very large fleets, such as those of car rental companies.
Program Objectives
A consensus of what has been determined to be the most marketableproduct for a given model year.
Total materials purchased for manufacturing/assembly into auto parts (ie. steel, plastics, rubber, textiles, etc.).
quick die change.
Conformance to requirements in relation to a degree of excellence.
Closure of a plant for the purpose of plantconversion or retooling.
Motor vehicle ownership that is filed with the province/state.
Research & development
R&D expenditures (product and process development).
Society of Automotive Engineers.
Total automotive product sales (vehicles, automotive, parts, including OE and aftermarket).
Scientific Research and Experimental Development (SR&ED) Program
This program provides generous incentives for industrial research and development in Canada. The program allows individuals and companies to deduct 100 percent of qualified current SR and ED expenditures and capital SR and ED expenditures.
A vehicle registered in the previous year but not re-registered in the current year.
Service station
Outlets which sell gasoline and are operated by the major oil companies.
Shipments (value of)
Summation of value of shipments produced by establishment, receipts of custom and repair revenue.
Special Import Measures Act (SIMA)
Helps to protect Canadian producers from harm or injury caused by the dumping of goods into Canada by foreign exporters or the subsidizing of goods by foreign governments.
Special services
A category that describes plants which add value to automotive parts manufactured by others by using process such as painting, plating, heat treatment, etc.
Specialty repair shop
Retail outlet which offersspecialized vehicle products and service.
Sports Utility Vehicle.
A process technology which manufactures automotive parts by shaping rolled sheet metal or by bending or stretching it in a sequence of purpose-built tools fitted to a general purpose press.
Standard Industrial Classification (SIC)
Industry class that represents a level of organization of production by type of specialization. Currently the 1980 Standard Industrial Classification is in effect identifying each industry at the 4 digit level.
Standard Work Week
average number of hours work scheduled in a work week.
A subsidiary is an organization operating inCanada that is owned or controlled by a foreign company which mayor may not manufacture in Canada.
Supplier Cost Reduction Effort (SCORE)
A United States program that urges suppliers to develop processes to cut costs. Suppliers are allowed to keep half the savings and pass on the other half to the automakers.
A duty or tax imposed on imports.
Tier 1 Supplier
Manufacturer to the vehicle assemblers who are responsible for delivery of the finished assembly, productdevelopment and continued technology renewal.
Tier 2 Supplier
Producer of parts providing value-added to minor sub-assembly.
Tier 3 Supplier
Supplier of engineered materials and special services, such as rolls of sheet steel, bars and heat treating, surface treatments.
Tire store
Retail outlet selling tires and offering vehicle repair services.
Total Quality Management (TQM)
A management technique to improve the quality of goods and services, reduce operatingcosts and increase customer satisfaction.
Device for use in, or attachment to, production machinery that is for the assembling of materials or the working of materials by turning, milling, grinding, polishing, drilling, punching, boring, shaping, shearing, pressing or planing.
Set of required standard or special tools neededto produce a particular part; includes jigs, fixtures, gages andcutting tools, but excluding machined tools.
Trim Level
Vehicle designation assigned by vehicle manufacturers that represent specific equipment packages.
United States Council for Automotive Research (USCAR)
An organization founded by Chrysler, Ford, and General Motors to strengthen the technology base of the domestic automotive industry through research and co-operation.
Used vehicle
Vehicle that has been previously owned or driven.
Value analysis.
Value engineering.
Voluntary export restraint in relation to Japanese manufacturers exporting to Canada (no longer in effect).
Voluntary restraint agreement in relation to Japanesemanufacturers exporting to the United States (no longer in effect).
Vehicle Identification Umber (VIN)
Number assigned to a vehicle by the manufacturer primarily for registration and identification purposes (consisting of numerals and letters).
Windsor Experiment
Chrysler Canada, in partnership with government and educational institutions, has launched a number of initiatives collectively referred to as the Windsor Experiment. The Windsor Experiment conducts studies to benchmark "best practice" training and education in Europe, and applied the results in various skills development programs.
An intermediary which sells to other intermediaries, such as a firm that buys from a manufacturerand sells to a retailer.
World Trade Organization (WTO)
Created by the Uruguay Round and successor to the GATT, this new organization began operations on January 1, 1995.