The beginning tag specifies an aura component, which is must for each and every aura component.

It implements few of the interfaces which enhances your aura component’s properties. Every interface boost your aura components usability. We will learn this is depth in further chapters. The interfaces we have used in this code will allow your component to added in lightning tab and lightning page.

lightning:layout and lightning:layoutItem are used to generate markup using SLDS grid system. More on this here.

lightning:select is similar to an HTML select component which displays a drop-down with different options. We will be using this to display different car types in drop down.

lightning:button is used to generate SLDS button markups. These buttons will be used for performing the search operation and creating new a car type.