Toyota is shrugging off a sales plunge in China set off by a territorial dispute and says it is headed to a record year on the back of strong growth in the rest of Asia and the US, said a report.

Toyota Motor executive vice-president Yukitoshi Funo acknowledged yesterday that achieving the company's target of 9.76 million vehicle sales this year will be harder because of the problems in China, according to the report in our sister publication the Gulf Daily News.

Violent protests and a call to boycott Japanese goods erupted after Tokyo nationalised tiny islands that are controlled by Japan but claimed by Beijing.

Toyota's sales in China the last couple of months have fallen to about half of what they were a year earlier. Initially, Toyota had expected to sell 1m vehicles in China this year. Achieving that is now unlikely.

But Funo, who oversees Toyota's Asian operations, expressed confidence overall global vehicle sales will hit a record, surpassing the record 9.37m vehicles sold in 2007, because growth in other parts of the world will offset the losses in China.

"Toyota's operation is well-balanced" because the company has made a point of spreading risks by building up its brand and sales in many markets, not only China, Funo said.

His optimism underlines Toyota's return to the position of world's top carmaker this year by vehicle sales, beating General Motors.