TOKYO--Toyota Motor Corp. (7203.TO) said Wednesday that it expected vehicle production and sales to fall by 1% this year, paving the way for Volkswagen AG (VOW.XE) of Germany to seize the crown as world's largest auto maker.

Toyota predicted that production would drop to 10.2 million vehicles, with sales falling to 10.15 million. The company said that in 2014, sales rose 3% to 10.23 million.

Volkswagen said it delivered 10.14 million vehicles in 2014, a 4.2% increase. It was the first time Volkswagen topped the 10-million mark.

Volkswagen hasn't issued a forecast for 2015, but IHS Automotive, a research firm, forecasts sales of 10.07 million this year for the German car maker, compared with 9.51 million for Toyota. That also compares with 9.98 million for Volkswagen in 2014.

IHS includes fewer categories of vehicles in its forecasts, accounting for the lower numbers.

While Toyota's sales have been growing in North America, the company's performance has lagged in China, where VW has been doing well.

Write to Eric Pfanner at eric.pfanner@wsj.com

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