Toyota arm that keeps 150 million cars on road also top-earning

Toyota Motor has amassed a lucrative, growing after-sales and service operation that keeps 150 million of its vehicles on roads around the planet — and the business is poised to become the company’s biggest source of profit.

Toyota’s value chain arm is growing steadily. The unit is projected to exceed operating profit from new car sales during the fiscal year ending March 2026, after reaching ¥2 trillion ($13.3 billion) for the first time ever the previous year, the company said.

“We believe the business still has much more potential,” said Yukiko Miyamoto, general manager of Toyota’s value chain division, during an interview at the company’s offices in Nagoya. “It’s a reality that many customers get their cars checked at dealerships outside of the Toyota network, so it’s important that we build more connections.”

The operation that helps keep those many millions of cars roadworthy is now so important that Toyota has created a distinct division to house it, in January pooling resources and staff from existing teams focused on customer support, including replacement parts, vehicle maintenance and financial services. Miyamoto is the first general manager of the division.

With ¥150 billion in average annual growth in operating profit, its momentum is hard to ignore. But such gains aren’t guaranteed in the long run. The rise of what is known as software-defined vehicles — which can often be monitored and updated remotely — is redefining how legacy brands go about extending the longevity of their cars.

“It’s a game changer,” Miyamoto said. “Of course there are reasons for us to be concerned, but we have the chance to turn it into a plus.”

Battery-powered electric vehicles present both a challenge and an opportunity, especially when it comes to providing drivers with regular maintenance, let alone replacement parts or modifications.

EVs require vastly different components compared to a conventional car powered by an internal combustion engine or a gas-electric hybrid powertrain. Battery-powered cars, for example, are generally heavier and accelerate quicker, meaning the tires or the brakes might not last quite as long.

Mainstream use of over-the-air updates could mean customers won’t come in for repairs as often. But they do mean Toyota will be able to monitor a larger number of vehicles, Miyamoto said.

Toyota sold 10.8 million cars in 2024, a slight drop from the previous year but more than enough to surpass Volkswagen and maintain its title as the world’s biggest carmaker for a fifth straight year.

It’s even starting to claw back market share in China, where Japanese carmakers have been losing ground for years to aggressive EV competition in the world’s largest automobile market.

Even so, much of the company’s financial wellbeing depends on broadening its value chain division.

To capitalize on its momentum, the division is expanding services in regions like Southeast Asia while bolstering operations in the U.S. and Europe.

Toyota’s global network of dealerships and showrooms are one of the company’s greatest strengths, Miyamoto said. Replacement parts account for more than half of the new division’s income, considering it supplies everything from air filters and windshield wipers to updated headlights for the RAV4 and customized parts to make a vehicle more rugged or sporty.

“The more cars we sell, the more opportunities we get,” Miyamoto said. “But we need to maintain and create more points of contact with customers after the car is sold, in order for both elements to build off one another.”