Frankfurt/Tokyo — Toyota lost its crown as the world’s best-selling car maker to Volkswagen, ending the Japanese company’s four-year reign, as it faces challenges that range from the threat of trade barriers in the US to slowing demand in China after a tax increase. Worldwide sales for Toyota, including its Hino and Daihatsu units, rose 0.2% to 10.175-million vehicles in 2016, the Japanese car maker said on Monday. That fell short of Volkswagen’s record 10.3-million cars, trucks and buses, a 3.8% gain. Toyota lagged behind Volkswagen mainly due to the diverging fate in their largest overseas markets. While the Japanese company was hampered by a broader US car industry sales slowdown, VW benefited from its growth in China and a tax cut that has stoked buying since 2015. The race between the two still hinges on the two markets this year, as Toyota responds to policies of US President Donald Trump and VW faces decelerating demand in China as the tax reduction expires. Since his inaugur...

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