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For years, Toyota Motor Corp. focused on pushing its hybrid models in Europe, avoiding a diesel-for-diesel competition with market leaders including Volkswagen AG. The carmaker’s strategy is finally paying off.

In the first full year since Volkswagen’s emissions scandal threw the German giant into disarray, Toyota is on track for roughly a 40 percent jump in annual sales of gasoline-electric vehicles in Europe. Hybrids are set to account for more than half of Toyota’s deliveries for the region by the end of the decade, according to Karl Schlicht, executive vice president of the carmaker’s European division.

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