MTD Exclusive Q&A: What’s Next for Turbo Wholesale Tires?

It’s been a year of significant growth for Turbo Wholesale Tires LLC. Phillip Kane, Turbo’s CEO, discusses what’s next for the company in this MTD exclusive.

MTD: Can you bring us up to speed on Turbo Wholesale Tires LLC's activities in 2024?

Kane: 2024 has been a busy year at Turbo. The bulk of our efforts have been focused on three significant priorities: growth, new product development and the integration of our Tire Wholesalers Inc. (TWI) acquisition. (Editor’s note: Turbo acquired Michigan-based TWI, which had been owned by the Kogel family, in 2023.)

I’m pleased to report that we’ve done very well in regard to all three. Even in a difficult market, thanks to the great support of our customers, our brands have grown significantly year on year. So we’re very happy about that, as you can imagine.

On the product development front, with our customers, late last year - after the product launch in our parking lot - we identified more than 15 new projects that we thought would bring additional value to our portfolio. By mid-2025, we’ll have delivered every one of them.

Finally, we put the integration of TWI on a fairly aggressive timeline because having a fully aligned organization is just better for our customers and by our 10th month into the deal, we were done, which surprised a lot of people. But I couldn’t be happier about how well our partnership with the Kogels has gone so far.

MTD: What's your take on the general state of the wholesale tire distribution channel in the U.S. as the year winds down?

Kane: I know I don’t have to tell you that it’s been an interesting year. I’m not sure that I’m going to tell you anything different than the others you’ve interviewed here have said.

The business mix in traditional wholesale- between own books and secondary supply-type deliveries - feels like it’s continuing to shift toward deliveries, putting pressure on margin in a year when average selling price is already depressed. And we’ve all seen a significant migration from tiers one and two to value segments. Certainly, that’s been great for our proprietary business. It’s required that we work a lot harder to take a bigger piece of a smaller pie in the upper tiers, though. But that’s what it takes.

I’ve long believed that in a traditional wholesale business, for all the investments one makes in improved distribution capability, their reward is to remain one of four to six tabs open on every screen on every parts counter in every tire store in America. We see that as a really tough business – especially this year. That’s why we are focused on growing brand share, not distribution share. We feel that our brands are a tremendously differentiating feature of our business and one that delivers significant and very unique value to our customers.

Now that consumers have had two to three replacement cycles to experience the quality of ride and construction in our tires and others in our segment, we don’t see them trading back up just because something changes in the economy later this year or into 2025. So we’re long-term bullish on the value tier and feel we’re well-positioned to continue to grow share by delighting our customers.

MTD: Turbo continues to expand and evolve its proprietary tire lines - most recently introducing Rolling Big Power brand TBR tires, as discussed in a recent MTD article. What is Turbo's overall product strategy and what new products are in the pipeline?

Kane: Overall, you’ll see us focus on positioning Lexani as our flagship PLT brand. We’ll be introducing products in the latter part of this year and the first half of next that extend the brand from broadline to true UHP and completely fill in any white space that once existed in the brand. Whether EV, run on flat, all-weather, summer, touring or all-terrain, Lexani consumers can have everything while sacrificing nothing.

Turning to Rolling Big Power, when we acquired the business in late-2022, RBP was essentially a mud terrain line. Our customers told us that it would be better if the brand covered all light truck segments: M/T, R/T, X/T, A/T, H/T, S/T and even commercial van. So we committed to doing so by the end of this year, which we will.

In addition, as you mentioned, we launched Turbo’s first ever TBR line, a 40-plus SKU offering manufactured by Double Coin this year, as well, which, as a truck guy, I am particularly excited about.

Finally, Lionhart gets a complete makeover, too. From a refreshed brand image to three brand new lines that are specifically targeted at the consumers who are most involved with our brand, Lionhart is being remade from the ground up.

MTD: Are there plans to add more Turbo distribution centers and if so, are you targeting specific geographies?

Kane: Our interest in expansion is primarily two-fold: first, to facilitate faster and better service to the distributor customers that we rely upon to further move our proprietary products to our associated retailers and second, to enable us to receive inbound freight more economically and expeditiously. If opportunities present themselves that meet those criteria, we’ll certainly take a look. But we’re not interested in expansion for the sake of expansion. Pins in the map don’t interest us. Remember, it’s not distribution share we are after. It’s brand share. We have no interest in competing with our customers, but finding ways to service them better. If and when those deals pop up, we’ll listen.

MTD: Can you bring us up to speed on Turbo's Ignite associate dealer program? How many members does the program have, to date? How has Ignite been received by dealers and why?

Kane: Ignite has been an overwhelming success, so far. Already we have over 500 qualified associate dealers enjoying the program and more than a dozen of our distributor partners aligned with us in offering it to dealers. I think best of all, maybe, it’s worked flawlessly from a mechanical standpoint, so far, which is what really matters to the dealers who get involved. I’m really proud of that and the folks on our team who took the time to get it right.

I think the other thing that’s made Ignite so successful is that it’s super-simple. I wanted this program to be the easiest program of its kind to understand and navigate. Dealers don’t like hurdles and hoops. They don’t want complexity. It’s their money. It shouldn’t be hard to get to. Ignite is simple and easy - the way things should be.

MTD: What can we expect to see from Turbo during the rest of 2024 and next year? What will be the company's top priorities?

Kane: I personally - and the rest of our team, as well - spend a lot of time listening to our customers. They shape our priorities and the things that matter the most to us. We know why we’re here. We’re in the tire business. And we see ourselves as a product leadership organization, focused on bringing great products to the market that enable our customers to make more money than if we didn’t exist. And being a great place to buy from starts with being a great place to work. So whether it’s the rest of this year or next, that’s what we’ll be focused on.