Toyota overtakes Volkswagen as it's sales grow whilst VW's drops over the emissions scandal.

Toyota Motor regained its global sales lead over Volkswagen Group as its German competitor braces for consumer blowback from a widening emissions-cheating scandal.

Toyota today said it sold 7.49 million vehicles through September, topping the 7.43 million that Volkswagen reported earlier this month. Deliveries declined 1.5 percent for both Toyota and VW.

The results include less than two weeks of sales reporting by Volkswagen after its admission to rigging diesel engines with software that deceived regulators about pollution levels.

VW led Toyota in global sales through the first six months but the company is now readying repairs to 11 million vehicles worldwide and has stopped sales of diesel models in several markets as it brings engines into compliance.

VW is also facing a slowdown in demand in China, its largest market, with its namesake brand declining 7.4 percent in the first nine months.

"Toyota will be the No. 1 for this year," Koji Endo, an auto analyst at Advanced Research Japan, said. "VW may be facing sales difficulties due to the scandal towards next year in Europe and the U.S., and I don’t see the Chinese market coming back anytime soon."

Volkswagen’s emissions scandal led to the resignation of CEO Martin Winterkorn, who had set a goal to vault the company past Toyota and General Motors Co. to become the world leader by global sales. GM’s deliveries dropped 1.9 percent to 7.2 million vehicles during the first nine months.

As Volkswagen stumbles, Toyota is now preparing to begin deliveries of its updated Prius. After almost seven years without a redesign, the company is promising a sportier ride for its top-selling hybrid, an improvement in fuel economy of about 10 percent and an even bigger boost for an Eco version of the model. Sales begin in Japan before the end of the year.

Toyota planned to add about 1,400 workers at factories in Japan to ramp up production of the new Prius and its updated Land Cruiser sport utility vehicle, people familiar with the matter said in August.

As one of the top-selling models within Toyota’s lineup built exclusively in the company’s home market, the Prius will help boost Japan exports. Toyota is also betting improved acceleration and added safety features will lift demand for the $80,000 Land Cruiser, its most expensive SUV, in markets including the U.S.

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