The Japanese carmaker Nissan has said it has been caught out by accelerating sales of electric and hybrid cars in China amid a brutal price war in the world’s biggest automotive market.

The manufacturer slashed its sales forecasts for China and said it would cut back on petrol car manufacturing while increasing production of battery electric vehicles and plug-in hybrids, which combine a smaller battery with a petrol engine.

Nissan said it expected to sell between 2.97m and 3m cars this year, down from a previous forecast of 3.15m, mainly because of struggles in China.

“China remains our biggest challenge,” said Ivan Espinosa, Nissan’s chief executive. “Demand is weaker, competition is intensifying, and the shift to new energy vehicles is happening faster than expected.…