Turbo moves to differentiate itself, proprietary brands

OAK PARK, Mich. — In the year and a half since Turbo Wholesale Tires took on a private-equity investment partner, the private-brand and wholesale tire distributor has executed a series of strategic moves to help differentiate itself and its proprietary brands in an otherwise crowded field of suppliers.

In business since 1983, Irwindale, Calif.-based Turbo Wholesale goes to market predominantly with its own tire brands, Lexani, Lionheart and Rolling Big Power (RBP), along with a limited portfolio of tire maker brands.

In November 2022, Turbo's founding Sepetjian family sold a considerable share of the business to Kingswood Capital Management L.P. and brought aboard a management team headed by tire-industry veterans Phillip Kane and Todd Pickens.

Company founder Sarkis Sepetjian and his family retained "significant" ownership in the business, as well as gained a seat on the Kingswood board. CEO Kane is a former Goodyear, Pirelli & Co. and General Parts Co. executive, while Chief Commercial Officer Pickens formerly was with Goodyear's Mickey Thompson Tires & Wheels business, where he was vice president of sales and customer service and oversaw the company's global sales and customer service operations.

Actions taken by the firm's new management team include:

• Launching an associate dealer program, called Lexani Ignite, that rewards Turbo associate dealers with quarterly incentives for purchasing units of the distributor's proprietary brands from the firm or its network of wholesale distributors;

• Acquiring controlling interest in Tire Wholesalers Inc. (TWI), the Oak Park, Mich.-based, Kogel family-owned wholesale distributor with strong distribution networks throughout the Midwest and East;

• Gaining approval as a vendor by Independent Tire Dealers Group L.L.C., providing ITDG member companies with access to Turbo's Lexani, Lionhart and Rolling Big Power (RBP) proprietary brands;

• Signing Ryan Friedlinghaus — founder of custom car fabricator West Coast Customs — and fashion icon Kathy Ireland as brand ambassadors;

• Securing a manufacturing contract with Double Coin L.L.C. for radial truck/bus tires under Turbo's Rolling Big Power (RBP) brand;

• Agreeing to distribute Vogue-brand tires through its growing wholesale network; and

• Adding specialty tires, like run-flat and electric-vehicle (EV) lines, to the firm's brand portfolios.

It was the latter that brought Kane and the Turbo Wholesale executive and sales teams earlier this summer to Michigan, where they rolled out the firm's first dedicated EV tire line, the Lexani Volt-EC, at an open house at the 275,000-sq.-ft. Oak Park warehouse distribution center opened in 2022 by TWI.

Seen as a "halo" product for the brand, the Y-speed-rated Volt-EC is designed to elevate EV performance, extend range and improve passenger comfort, Kane told Tire Business, at a price point measurably below top-tier brand offerings.

Available in 21 sizes, the Volt-EC features an EV-specific performance balance, optimizing weight distribution for enhanced traction and stability. With ultra-low rolling resistance, it boosts efficiency and range, Turbo Wholesale said, without quantifying the gains.

The tire's "advanced" tread pattern offers "superior" wet-weather safety and reduced noise generation for a quiet ride.

The product — manufactured in Thailand by Turbo's manufacturing partner Sentury Tire Co. Ltd. — launches in sizes covering 18- to 22-inch rim diameter SKUs, ranging from 235/45ZR18 to 285/35ZR22. All sizes carry an XL load index. Pricing information was not disclosed at this time.

Bringing out products that traditionally have been the domain of the tier 1 or 2 brands is one way Turbo Wholesale hopes to differentiate itself in the marketplace, Kane said.

"What we're trying to do with our brand is introduce products in segments, like run-flat, EV, all-weather, etc., segments that aren't historically known … in brands like ours," he said.

"And so then when you couple that with things like the associated dealer program, things like the marketing that we're doing, and things like the people that we've hired, then when you put it all together, that's what makes up what we refer to as the differentiated strategy, where people say, 'That is a different sort of an organization that's doing different things in the industry.'"

Turbo Wholesale's basic business model — supplying other regional wholesalers — separates it from many of its wholesale distribution "brethren," Kane said.

"When we expand, it's about gaining greater brand share because that's really our focus, … that and gaining greater proximity to the regional distributors that we rely on to further distribute our product," Kane said, explaining that Turbo has only a handful of retail accounts it serves directly.

In assessing the possible acquisition of TWI last summer, Turbo determined that the Michigan company's business model was very similar to its own, a fact that helped make the firms' integration essentially seamless, Kane noted.

"For me, personally, it was a fact that, culturally, the things that they (Ross Kogel Sr. and Jr.) believe in, align almost identically with the things that I believe in personally. …

"Because of that cultural alignment, we were able to skip the whole part around change the people or change the people … so that saved us six months of work.

"We were literally in this room, within the first five days, working on substantive business issues, together, as if we'd been together for a lifetime, … We went from zero to full trust … within a matter of days, because of that cultural alignment."

And from a purely business perspective, the merger opened up great swaths of the country in the Midwest and East to more regular and more timely deliveries of Turbo's proprietary brands.

Turbo Wholesale executive team sees measurable opportunities for its brands, which it classifies predominantly as tier 3, where the company has seen "tremendous migration" from the market for quality, value-priced products.

"Principally, I think, that economics may have been the principal catalyst for that (migration), … as the economy was difficult coming out of COVID, and then made even more difficult by inflation. Consumers were looking for more cost-effective options, so they found them in tier 3."

At the same time, Kane said, "the tier has found some staying power with consumers, because the products are so good. And certainly, we're very happy about that because we're the direct beneficiaries of that."

While price might be the determining factor for attracting first-time customers, Turbo Wholesale is working diligently behind the scenes to secure top-notch manufacturing partners to help ensure that the firm's products also measure up in quality terms.

Paying attention to quality shows up in somewhat unexpected ways, he noted, such as tire techs reporting back that mounting the products require less weight and there are far fewer comebacks.

That leads to retailers' becoming more and more comfortable recommending these to their customers, he said.