Toyota Motor Corp. lagged Volkswagen AG by global deliveries in the first half of the year, as demand for the newly redesigned Prius hybrid slumped in a U.S. market dominated by trucks and sport utility vehicles.

Worldwide deliveries fell 0.6 percent to 4.99 million vehicles in the six months through June, Toyota said in a statement. Volkswagen¡¯s sales climbed 1.5 percent to 5.12 million units in the same period.

Despite introducing a new-look sedan model featuring improved mileage and a higher-tech interior, U.S. deliveries of Toyota¡¯s Prius hybrid line plunged 25 percent in the first half of the year. That held Toyota back from regaining its global sales lead after suffering a series of production disruptions in the first quarter.

Volkswagen is threatening Toyota¡¯s four-year reign as the world¡¯s largest automaker even as it deals with the rising price tag for having installed cheating software in about 11 million vehicles worldwide. The company has set aside more than €18 billion ($19.9 billion) to cover costs arising from the scandal.

The Prius line fell behind Toyota¡¯s Tacoma pickup by U.S. sales during the first half, as low fuel prices boosted demand for trucks and SUVs.

¡°We¡¯re trying to sell cars in a truck industry,¡± Paul Holdridge, vice president of Toyota division sales in the U.S., said on a conference call earlier this month to discuss the company¡¯s 2.7 percent drop in first-half deliveries. ¡°With gas prices on hybrid vehicles, it¡¯s making it a challenge for us to sell the Prius.¡±

Toyota¡¯s domestic production was undercut early this year by a one-week shutdown at all Japanese assembly plants in February, following an explosion and fire at a steel-making affiliate. The company said it also lost output of another 80,000 vehicles due to strong earthquakes in Kumamoto Prefecture, the worst since March 2011.