Because the bubble economy had increased the number of cars owned, the Japanese used car market steadily expanded, growing to a size exceeding the new car market in 1993. Starting around this time, businesses that purchased used cars directly from customers also expanded rapidly. As a result, all Toyota-related entities began to face a problem of slow growth in the number of cars traded in during new car purchases and the number of used cars sold at retail. Therefore, when it introduced the Channel Operations Groups system in 1997, TMC folded the Used Car Division into the Japan Sales Planning Division and reorganized it as the Used Car Department, thereby expanding the organization into one that carried out planning and policy development across organizational boundaries for all Toyota-related entities.

The Used Car Department proceeded to implement a series of measures such as upgrading logistics to address the various issues. For example, in 1997, Toyota Used Car Sales, which was operating Toyota Auto Auction (TAA), connected the auction venues in the Kanto, Chubu, and Kinki regions through a network and opened an Okinawa bidding facility. At the same time, auction entries, which had previously been restricted to Toyota dealers, were also opened to general businesses. In addition, new venues were opened in the Tohoku and Kyushu regions in 2000 to increase the number of used cars handled.

To increase retail sale of used cars, TMC in 1999 opened the CarLots mega store in present-day Miyoshi City, Aichi Prefecture, where more than 200 vehicles can be displayed. After running a trial operation at this Store No. 1, TMC began to open other CarLots locations across Japan in 2001. TMC worked to cultivate new customers under the Toyota-Plus theme, handling a wide variety of other automakers' models in addition to the traditional offering of mostly Toyota cars. In 2000, after reassessing its long-term warranty for used cars, TMC significantly expanded the warranty, extending coverage to non-Toyota cars as well.

As for the pending issue of a used car purchasing business, TMC decided to open its own network in order to strengthen purchasing functions toward increasing retail sales at its dealers. T-UP (Toyota Usedcar Purchase) was selected as the name of the purchasing network to take advantage of the reliability and trust associated with Toyota. TMC began opening T-UP stores across Japan in April 2000.

When TMC developed its Three Year Plan for Japanese sales in 2000, it decided to standardize on the term 'U-Car' to improve the image associated with used cars. Then in 2001, TMC reorganized its Used Car Department into the Used Car Business Division, clearly demonstrating its intention to make the used car business profitable.

In the second half of the 1990s, TMC also developed a new policy regarding its spare parts business. To respond to the highly competitive market of regularly scheduled replacement parts, TMC established Tacti Corporation in 1996 and began selling the Drive Joy brand (a second Toyota brand) of spare parts. TMC also established the jms (pronounced "james") car shop (maintenance and accessory) business managed by Tacti and opened stores across Japan.