Volkswagen could move ahead of Toyota as the world’s biggest carmaker by sales as the Japanese company projected a drop in annual its vehicle volume this year with demand dropping in its domestic as well as other key markets.

Chief executive Akio Toyoda said he wants to see measured, profitable growth rather than chasing volumes, a more circumspect approach aimed at avoiding issues such as over capacity.

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Toyota said it expects 2015 global vehicle sales, including those of subsidiaries Daihatsu and Hino to slip back by 1% to 10.15m vehicles. This is the first time in around 15 years that the company has forecast a dip in its annual vehicle sales.

Toyota has a three-year freeze [could be ending, according to recent reports] on building new factories to the end of the financial year 31 March 2016 as it focuses on becoming leaner and more profitable. The company expects growth in China to halve this year after sales failed to hit target in 2014 on the back of a slowing economy and political tensions between China and Japan. Sales in Indonesia, Southeast Asia’s biggest economy, fell 11% and are expected to remain weak in 2015.

VW fared somewhat better in China last year, helping push its global sales up 4.2% to 10.14m vehicles last year. Its growth plans could see it overtake Toyota this year, ahead of its 2018 target.

Toyota expects its parent-only sales to rise 0.4% to 9.18m, with a 7% fall to just under 1.5m in Japan where increases in sales tax last year hit demand. It expects overseas sales to rise 2% to 7.73m, led by a healthy US market.

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