Donald James was appointed as Continental’s marketing director, commercial vehicles and aftermarket NAFTA region in January 2008. Prior to this appointment he was responsible for launching Continental’s aftermarket marketing and product management program for ATE brakes in 2005. James is currently responsible for the marketing communications strategy, advertising and brand strategy, promotional activities and brake product management strategy for North America. In the following Executive Interview, James talks about the evolution taking place in the automobile industry today, the future of the supplier industry as well as future vehicle service trends. 
Prior to joining Continental, James held a number of positions at Federal-Mogul Corp., as marketing product manager for Wagner Brake hydraulics, where he led a variety of marketing initiatives, including customer product training, development programs and promotional campaigns. He also served as marketing product manager for Federal-Mogul’s brake friction group, where he was instrumental in launching new customer programs. Prior to these positions, James served as customer service training supervisor at Federal-Mogul. He earned his bachelor’s degree in economics from the University of Michigan in Ann Arbor, Mich., and his executive MBA from Lawrence Technological University in Southfield, Mich. He is currently pursuing his doctorate in business from Lawrence Technological University. James’ research agenda is in the area of sustainability, green business and marketing strategy.
As the global economy slowly begins to right itself, many speculate that the events of the past 12 months are creating a major evolution in the automobile industry. From where you stand, what do you see as the biggest factors driving this change today?
Obviously, the entire automotive industry has been impacted by the global economy slipping into a recession. This market turmoil forced the automotive industry to undergo a major transformation in leadership with a refocus on innovation and vehicle affordability. Ultimately, I believe that there are three major factors driving the change that we see.
The first is globalization. Many companies in the automotive industry realize that they are competing on a global scale in terms of product offering, manufacturing and services. Thinking globally is mandatory in strategy formulation and business development. As business leaders, we should not have an “us vs. them” mentality. Instead, we should embrace globalization through trade and business. There are a lot of positives that we can capitalize on by embracing globalization, such as economies of scale, product development and strategic alliances.
The second major force is communication. Our generation that has witnessed a total transformation in information technology and communication for both B2B and B2C via the Internet, vehicle telematics, PDAs and iPods. This communication and technological innovation is drastically changing the way our automobiles are designed and manufactured in terms of features that consumers want. Many of our personal communication devices are being integrated into the automobiles of today and tomorrow.
The third major factor that is driving change in the automobile industry is environmental sustainability. Rising fuel costs as well as recent legislation has certainly increased the popularity of hybrids and alternative fuel technology among consumers and vehicle manufacturers. I do not see this as some passing fad, but as a driving force in what the future of the automotive industry will bring. The entire world has been changing around us in terms of environmentally sustainable initiatives, and I realize that the automobile industry will play a major role in driving these sustainable initiatives over the next decade.
How are the changes we see taking place at the consumer/motorist level going to impact vehicle service trends?
We have recently witnessed the government’s Cash for Clunkers program and its impact on the automotive industry, as a whole and the aftermarket. I agree with the analysis of many economists that this program, while deemed successful on the OE side, may have pulled vehicle sales ahead. The aftermarket, on the other hand, will be deprived of older vehicles, which, in the absence of the Cash for Clunkers program, would have remained in operation for many years, requiring aftermarket products and repair services. Thus, I do not believe we will realize the true impact of this program for years to come.
The impact of massive dealership closings will certainly have a positive impact on the independent aftermarket in terms of the growth of independent repair, parts and other services. This opportunity will be simply implied by the number of independent repair facilities and the availability of aftermarket products vs. the number OE dealerships in the near future.
I also believe that the Right to Repair initiatives for the aftermarket will continue to be a major factor as vehicle technology continues to advance. There is an entire wave of new hybrid, alternative fuel and technological upgrades in vehicle design that the aftermarket industry must prepare to service in the coming decades.
Taking this idea a step further, let’s talk about the changing face of the supplier industry today. What do you believe are the biggest challenges in the supplier industry today and what do you feel needs to change?
Naturally, suppliers must “right size” with the rest of the industry and do so profitably. We will continue to see a great degree of supplier consolidation over the next decade as companies seek to strategically align themselves to deal with the realities of a globally competitive environment.
Suppliers must also be prepared to face the changes in globalization, communication and sustainability as previously stated. In order to meet these challenges head-on, suppliers must be willing to innovate and invest in R&D around these trends. Continental, for example, has taken great steps to invest in the future of lithium ion battery technology in order to prepare for the hybrid vehicle transformation that we are witnessing.
Within the aftermarket, the distribution segment holds a significant amount of influence over the way product lines are distributed and marketed. How do you foresee the distribution segment evolving in these changing times? And, how will this influence the aftermarket marketplace as a whole?
Aftermarket distributors will continue to make the decision on what is supplied and to whom. However, due to the competitiveness of products globally, I believe that distributors will also play a major role in how their lines are purchased. For example, there are a number of distributor alliances that are purchasing products directly from low-cost countries and utilizing their own logistics network to get this done. However, there is a certain risk in distributors stepping outside of their qualified supplier network of procurement such as the assurance of high quality, testing and adherence to strict product specifications. Many of these distributors do not have the infrastructure in place in order to fully adhere to the quality guidelines that full-service suppliers, such as Continental, enforce from manufacturers globally.
In terms of branding, it is a fact that the majority of the buying decisions are made by the distributors. Their network of jobbers and installers simply purchase what is made available by the distributor. Thus, these distributors play a key role in what and how product is supplied to the aftermarket industry, and I believe that you will continue to see this trend in the immediate future.
What are Continental’s goals for the future in light of all the changes taking place?
Continental has a very strong and diversified product range, thus we are well positioned for the future. Our management team, technological expertise, R&D and exceptional employees are taking the necessary steps in order to be on the cutting edge of the automotive industry’s mega trends. We believe that these are safety, information, sustainability and affordability. Our goal is to continue to be the leader in these areas and the driving innovative force behind automobile safety, telematics and sustainable technologies for years to come. From an aftermarket perspective, we also have a very diverse product range and strong brands in ATE and VDO. We believe that we have the right strategy for profitable growth and will continue to introduce innovative products to our portfolio such as ATE PremiumOne rotors and VDO Flex Fuel Sensors, Racing Fuel Injectors and OE Replacement Parts for Tire Pressure Monitoring Systems.
How will you use your time at AAPEX this year?
Continental understands the importance and value of the AAPEX show and will demonstrate our support by displaying in spite of the automotive crisis this year. Most of my time will be spent talking with customers, networking and attending industry events/seminars.
Attracting bright professionals to this industry has always been a challenge. Continental works toward this goal through its “Ambassador” program, and you recently brought the program to Northwood University. Please tell us more about this.
Continental is committed to exploring a diverse mix of more talent, globally. The Continental Ambassador Program was launched in 2003 by Continental corporate employer branding and recruiting in order to build long-lasting relationships at key universities, and present Continental as a future employer for students and graduates.
The program encourages Continental executives go to their former or sponsored universities in order to reach out to current students via classroom workshops, presentations, Conti plant visits or other on campus or off-site activities. Northwood University was of particular interest to me because of my aftermarket ties and their University of the Aftermarket. The aftermarket presented me with my start into the automotive industry, and I am personally committed to giving back. Currently, Continental has supported nearly 300 ambassadors and more than 500 ambassador events worldwide.
