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Toyota, already the world’s largest automaker by sales, is shifting its profit engine from new car transactions to long-term ownership revenue. A new report from NikkeiAsia reveals the Japanese giant plans to boost post-purchase profit by 40% by 2030—a jump from ¥2.1 trillion (approx. $14 billion) to ¥3 trillion ($20 billion). That figure would represent roughly 80% of Toyota’s current annual consolidated operating profit.
The strategy hinges on three pillars: software-defined vehicle (SDV) upgrades, genuine spare parts expansion, and a stronger push into used car sales. With about 150 million Toyotas already on roads worldwide, the company sees a massive recurring revenue opportunity.
Software-defined vehicles as a profit lever
Toyota’s SDV push is powered by Arene, a proprietary software platform developed by its in-house tech subsidiary, Woven by Toyota. CEO Hajime Kumabe calls Arene “Toyota’s tugboat into the future.” The platform enables over-the-air (OTA) updates that can add or enhance features like safety systems, infotainment, and powertrain calibration.
Already, Toyota has launched a paid service for GR Yaris and GR Corolla owners that adds a cooling function for the electronic control system via a smartphone app. The latest-generation RAV4 also ships with Arene, signaling that the technology will spread across the lineup.
Learning from BMW’s missteps
Toyota is likely aware of the consumer backlash BMW faced when it introduced subscription fees for hardware features like heated seats and Apple CarPlay. In 2022, BMW’s “in-car commerce” push triggered widespread criticism from owners who felt they were paying to unlock features already built into their cars. Low take-up rates eventually forced BMW to drop paywalling of physical hardware.
Toyota’s approach appears more cautious. Its paid software features are optional upgrades that enhance performance (like the GR cooling function) rather than unlocking dormant hardware. This distinction could help avoid the negative perception that plagued BMW.
Spare parts: a global logistics overhaul
To capture more aftermarket revenue, Toyota is broadening its genuine parts network. A new warehouse in Belgium now serves as a hub connecting 16 regional warehouses across 50 countries. The company plans to expand its parts supply capabilities in markets where car ownership is long—for example, Italy and Eastern Europe, where average ownership lasts 15 years.
This strategy positions Toyota to compete with local independent repair shops and counterfeit parts suppliers by offering reliable, OEM-approved components.
Used car sales: domestic growth target
In Japan, Toyota aims to increase its used car sales from 350,000 units to 550,000 units by 2030. The company will focus on lower-priced, certified pre-owned vehicles to attract budget-conscious buyers. This move also helps Toyota control the secondary market for its vehicles, potentially boosting trade-in values and brand loyalty.
Industry context and analyst views
The shift toward post-purchase revenue is not unique to Toyota. Automakers globally are seeking to monetize the growing fleet of connected vehicles. However, Toyota’s scale—150 million vehicles on the road—gives it a unique advantage. According to a recent analysis by McKinsey, the automotive software and services market could reach $500 billion by 2030, with aftermarket parts and services adding another $1.2 trillion.
Toyota’s 40% profit target is ambitious but grounded in realistic volume projections. The company’s conservative approach to software monetization may help it avoid the trust issues that hurt BMW and other brands.
What this means for US consumers
For American drivers, Toyota’s profit push means more optional software upgrades and a wider availability of genuine parts. Over time, new Toyotas may come with more features that can be unlocked via subscription, but the company is likely to keep them additive rather than punitive. The used car market could also see more certified Toyota vehicles, offering peace of mind with lower prices.
Bottom line
Toyota’s plan to extract more value from existing vehicles reflects a broader industry trend. By focusing on software, parts, and used cars, the company aims to turn a massive installed base into a recurring revenue stream. The key challenge will be balancing profit with customer trust—a lesson Toyota seems to have learned from its competitors’ mistakes.
April 5, 2025
