Kanagawa Chuo Kotsu, which operates one of Japan's largest route-bus networks, has indicated that it will make real estate investment a core growth driver while maintaining stable operations. Following strong first-quarter performance, it revised its second-quarter forecasts upward.
Kanagawa Chuo Kotsu maintains stable cash flow centred on its passenger transportation business while reducing its reliance on tourism demand and operating across a broad area centred on the Tokyo metropolitan region. Its bus business is considered one of the largest in Japan, serving an area with a population of approximately 8 million. The network comprises 1,876 buses, annual mileage totals 53.49 million km, and annual passenger numbers reach approximately 25 million.
Although the company is an equity-method affiliate of Odakyu Electric Railway, it remains independently listed, and Odakyu Electric Railway continues to be its largest shareholder, allowing it to maintain a degree of independence. For the fiscal year ended March 2026, consolidated revenue was ¥126.77 billion, operating income was ¥6.77 billion and ordinary income was ¥6.66 billion. Operating income improved by more than the decline from the initial forecast.
At an investor briefing, the company outlined a policy of making focused investments in its real estate business as a source of growth. It aims to expand recurring revenue through large-scale repairs to maintain and enhance the asset value of existing facilities and by converting company-owned land for rental use. By segment, the passenger transportation business still accounts for a large share, while the real estate business has a high operating margin but a relatively small share of total profit. The company has also set out plans to revise its profit mix toward fiscal 2031.
Alongside its real estate expansion, the company is continuing demonstration testing of autonomous buses, expanding AI on-demand bus services, collaborating on MaaS, expanding payment coverage on its routes, and discussing route restructuring with local governments. It plans to rebuild its business portfolio around the reorganisation of bus depots and the use of company-owned land, while recognising challenges related to regulation and profitability and the impact of driver shortages and declining demand.