Glossary of Automotive Terms
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- Aftermarket (Replacement Market)
- all products and services
used in the repair and maintenance of vehicles.
- Aftermarket part
- goods not for use as original
equipment 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 to
operate on behalf of the manufacturer.
- American Automobile Labelling Act (AALA)
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
- Asia Pacific Economic Cooperation (APEC)
- An organization established in 1989 to promote trade
and 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 Phillippines, Sinapore, 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, the
12 month period beginning on August 1, 1963, and ending on
July 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 equipped
with automatic guidance equipment which follow a prescribed path,
stopping at each machining or assembly station for manual loading
and 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 fleet
operators. The outlet will also provide service and
sell 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 a
seating capacity for not more than 10 people including police cars
and 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 the
- Average weekly earnings
- gross taxable payrolls divided
by the number of employees.
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- Big Three
- General Motors, Ford and Chrysler.
- Body shop
- service outlet specializing in vehicle body
- passenger motor vehicle or chassis having a seating
capacity for more than 10 people.
- Buying decisions
- the act of determining whether or not a
product purchase or repair, will be made, and/or which product or
service will be purchased.
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- Canada-U.S. Free Trade Agreement (FTA)
- Implemented in January 1989
to elimiate 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 shopping
describes the purchasing by Canadian consumers of products in
the United States. Of particular interest is the decision by
these 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 under
conditions. With regard to conditions, the company's
operating practices are to be followed with respect to the use of
production facilities, overtime, workshifts, holidays, etc.
- Capital Expenditures
- expenditures to acquire or add to
capital assets that will yield benefits over several accounting
periods. Included are cost of procuring, construction,
installing new durable plants, machinery and equipment where
for replacement, addition or for lease or rent to other
companies including subsidies.
- Captive Import
- an imported motor vehicle or part
manufactured by another automaker usually for sale under the
brand 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 difference
between the value of goods and industrial services produced and
the direct material costs associated with the production of
- 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 deterimental 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 fesign of specific components including responsibility for
material, cost, weight, reliability, durability, fuction, 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 consumers
including age, gender, income and geographic location,
- Corporate Average Fuel Economy (CAFE)
- regulation enacted
in 1975 which requires a motor vehicle manufacturer to classify
its U.S. vehicle fleet sales as either domestic or import for
the purpose of fuel economy averaging.
- Cost of production
- actual cost to the manufacturer of
producing a vehicle (does not include mark-up).
- Customs duties
- customs duties levied on imported goods under
the Customs Tariff.
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- 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 than
a distributor or wholesaler, and may add more value for consumers
than either of the above-mentioned terms.
- Dealer principal
- the individual or corporation that owns
and controls one or a number of auto dealerships.
- solid or hollow form used for shaping materials by
stamping, pressing, extruding, drawing or threading.
- the way in which innovations spread through
market or non-market channels.
- synonymous with wholesalers; distributors
perform 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 physical
goods, as well.
- Do-it-Yourself Market (DIY)
- the vehicle maintenance and
repairs conducted by the vehicle owner or friend/relative who
purchase 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 may
not correspond to an actual hour of work.
- Duty drawback
- import duties or taxes repaid by a government
in whole or in part, when the imported goods are re-exported or
used in the manufacture of exported goods.
- Duty paid value
- in respect to imported goods, is the
aggregate value for duty on imported goods.
- Duty waiver
- forgiveness, in whole or in part, of import
duties when certain conditions are met.
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- 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 the
year. Production workers relate to the average number actually
engaged in the manufacturing process. Administrative and
non-manufacturing includes employees at head offices and sales
- Employee Benefits
- the provision of direct (salary,
bonuses, etc.) indirect (vacation leave, medical and
dental plans, etc.) and deferred employee compensation
- smallest operating entity producing a
homogenous set of goods and services and is capable of reporting
full range of production account variables to calculate
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- 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, machinery
and equipment, tooling programs.
- a business or institution comprising sole
proprietorships, partnerships, companies and other forms
- Fixed or One Price Selling
- published fixed price displayed on a new vehicle eliminating need for negotiation.
- device for holding goods in process while working
tools are in operation that does not contain any special
arrangements 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
- a process that transforms solid metal into shapes
of varying cross-sectional material thickness, often involving
- establishment that has the right to exercise the
powers of a corporation.
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- G7 (Group of Seven)
- seven industrial countries consisting of
the United States, Japan, Germany, France, the United Kingdom, Italy and Canada, whose leaders have
met 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 prferences for the benefit of developing countries.
It grants duty-free or preferential entry to imports for elegible
developing countries up to a certain dollar value or import
- 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 by
intermediaries 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 the
U.S. or elsewhere from other than the manufacturer is
supplying grey market goods. While grey market products
are frequently the same as would be available from conventional
channels in Canada, the grey market assumes responsibility for
service or repair where the manufacturer declines this support.
- Gross Vehicle Weight (GVW)
- Maximum legal weight at which
a vehicle can be operated.
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- Heavy-duty truck
- vehicle weighing from 26,001 to 33,001
lbs. Also included off-highway trucks.
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- Ignition System
- Electrical system devised to produce
timed sparks from engine spark plugs. Consisting of a
battery, induction coil, capacitor, distributor, spark plugs and
relevant switches and wiring.
- an organization that typically operates at arms
length or under contractual agreement with manufacturers to bring
products made in another country into Canada.
- Import Nameplate
- vehicles sold by manufacturers primarily
located outside North America whether assembled Overseas or in
- Independent Repair Shop
- small service outlet offering
specialized repair services. They usually do not sell
- 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 different
channels of the distribution system. For example, independent
retailers competing with manufacturers' outlets.
- firm or organization that operates between
the producer of the goods and the end purchaser. Thus, the
members of the distribution channel noted above are intermediaries
- 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
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- device used in the accurate machining of good in
process by holding the goods firmly and guiding tools exactly to
- Joint Venture
- an international business collaboration between foreigh 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 to
the necessary place at the necessary time. It is part of a
business philosophy based on achieving excellence in a
manufacturing company through the continuous elimination
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- 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.
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- 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
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- brand name of a car or truck (ie. Chevrolet, Ford, Dodge, Honda).
- Manufacturer's Suggested Retail Price (MSRP)
typically sell at a discount to this price.
- an operation which shapes metal parts by carving
away excess material as chips produced in a sequential process of
turning, milling and grinding operations.
- process technology (ie. metal forming,
machining, injection moulding, blow moulding, die casting,
forgings, electronics/electrical, assembly, coating/plating);
capacity utilization (in percent); production volumes; strategic
alliances (eg. joint ventures, technology agreements).
- Margin or gross margin
- the return an intermediary achieves
on the selling price of the article. That is, if the
intermediary 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 example
described 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 and
repair conducted by a mechanic/professional at a service outlet.
- Medium-duty truck
- vehicle weighing from 14,001 to
- 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 trade
among members will be duty-free.
- Metal forming
- solid metal and molten metal process such
as 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 platform
or model name.
- Model name
- word, group of words, letter, number or similar
designation assigned to a motor vehicle by a marketing division
of a motor vehicle assembler.
- Most-Favoured-Nation (MFN) Treatment
- one country's
commitment to extend to another ocuntry 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 vehicles
and motor vehile equipment to reduce risk of death, injury and damage to property and the environment.
- hollow form, matrix or cavity into which materials
are placed to produce goods of desired shapes.
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- Net sales value
- the selling price received by the
manufacturer for the vehicle including the cost of transporting
the vehicle in Canada (includes mark-up).
- New car dealer
- major car dealership with a parts and
- North American Free Trade Agreement (NAFTA)
- Agreement creating free trade amone 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 in
Canada, the United States or Mexico.
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- Off-Highway Vehicle
- Vehicle intended for operation on
unmade surfaces or rough terrain (i.e. for construction
- 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
- Operating profit
- pre-tax earnings after deducting all
operating 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 prodution of automobiles exceeds the total global demand for automobiles.
- includes pay received for the number of hours
worked in excess of the standard workday or workweek.
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- 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-built
tooling under controlled heat and pressure, and injects the hot
material into a die cavity shaped in the final form of the
- 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 driveline and
links the suspension components of the motor vehicle.
- Pneumatic Tire
- Flexible, hollow rubber forming the
outer part of the vehicle wheel and inflated by air pressure.
- Product design
- the process of planning the product's
- Product planning
- a function whereby an enterprise is
responsible for the efficient, planning, scheduling and
coordination of production activities.
- Product testing
- rigorous methods whereby a product's
quality and durability are measured.
- Production engineering
- planning and control of the
mechanical means of changing the shape, condition of materials
toward greater effectiveness and value.
- relative measure of output per labour and/or
- Program cars
- automobiles sold by manufacturers for fleet
use. 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 marketable
product for a given model year.
- total materials purchased for
manufacturing/assembly into auto parts (ie. steel,
plastics, rubber, textiles, etc.).
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- quick die change.
- conformance to requirements in relation to a degree
- closure of a plant for the purpose of plant
conversion or retooling.
- motor vehicle ownership that is filed with the province/state.
- Research & development
- R&D expenditures (product and process development).
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- 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 offers
specialized 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 workedly
scheduled in a work week.
- a subsidiary is an organization operating in
Canada that is owned or controlled by a foreign company which may
or 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.
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- A duty or tax imposed on imports.
- Tier 1 Supplier
- manufacturer to the vehicle assemblers who
are responsible for delivery of the finished assembly, product
development and continued technology renewal.
- Tier 2 Supplier
- producer of parts providing value-added to
- 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 operating
costs 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 needed
to produce a particular part; includes jigs, fixtures, gages and
cutting tools, but excluding machined tools.
- Trim Level
- vehicle designation assigned by vehicle manufacturers that represent specific equipment packages.
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- 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
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- 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 Japanese
manufacturers exporting to the United States (no longer
- Vehicle Identification Umber (VIN)
- Number assigned to a vehicle by the manufacturer primarily for registration and identification purposes (consisting of numerals and letters).
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- 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 manufacturer
and 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.
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