Volkswagen is poised to overtake Toyota Motor Corp as the global leader in vehicle sales, with a rapid expansion drive in China - the world's biggest auto market - while Toyota curbs growth to focus on shoring up quality.
Toyota, reigning at the top spot in the auto industry for two years in a row, will announce its global sales for the first six months of the year on Wednesday, which could fall short of Volkswagen's half-year total.
The Volkswagen group sold 4.97 million vehicles in January-June, up 5.9 percent from the same period a year ago. That excludes figures from truck makers Scania and MAN, which will be released on July 31.
IHS Automotive forecast Volkswagen's total first-half sales at 5.07 million vehicles and Toyota's at 4.83 million, although it added that Toyota could end up outperforming its projections in the Middle East and Africa.
"China is the driving force of the global market, and the degree to which a company is focused on that region is linked to the global sales performance," said Yoshiaki Kawano, a Tokyo-based analyst at IHS Automotive.
General Motors Co, which Toyota overtook two years ago, said it sold 4.92 million vehicles in January-June.
For the full year, IHS expects Volkswagen to sell 9.91 million vehicles versus Toyota's 9.47 million.
Volkswagen, which sold 3.27 million vehicles in China last year, is planning to invest 18.2 billion euros (£14.40 billion) between 2014 and 2018 in new plants and products there together with its Chinese joint venture partners.
Toyota's China presence is much smaller with annual sales of 1 million vehicles, and while it plans eventually to double that it has given no time frame.
Toyota has put a freeze on the building of new plants until about 2016 and President Akio Toyoda has stressed that the company is focused on building better cars rather than chasing sales volume.
"Even if Toyota makes up its mind on potential investments soon, it'll be around 2017 when those plants can start operating," said Takaki Nakanishi, auto analyst and CEO of Nakanishi Research Institute.
Nakanishi expects Toyota to start announcing investment plans for new plants in the near future. It could open a new plant in Mexico, according to analysts and media reports.
Despite VW's expansion, profitability remains an issue, with its namesake brand's 2013 profit margin at 2.9 percent while Toyota's auto division achieved 8.8 percent and Hyundai Motor Co stood at 9 percent. Much of VW's production is in its home market of Germany, where workers secured a significant pay increase last year.
The Volkswagen group's brands include Volkswagen Passenger Cars, Audi, Porsche and Skoda, among others. Toyota includes the Toyota brand, Lexus, Scion, Daihatsu and Hino.