Toyota expects its vehicle sales in Japan to fall by over 18% year on year to 1.36m units in 2013, from an estimated 1.67m in 2012, according to local reports.

This very bleak internal sales forecast by the country’s leading car brand paints a gloomy outlook for Japan’s broader vehicle market next year.

Vehicle sales have already begun to weaken after the end in September of the government’s 12 month incentive programme which helped drive sales of fuel-efficient cars in the first nine months of this year.

Sales this year have also been boosted by an order backlog following last year’s earthquake and tsunami.

The country entered its second economic recession in as many years in the third quarter with the strong yen heavily hitting corporate earnings and capital expenditure.

Toyota, along with other Japanese auto manufacturers, is also suffering from a huge backlash following a territorial dispute between China and Japan which flared up in August. Japanese vehicle sales in mainland China, the world’s largest vehicle market, have since falling by over 50%.