The German firm sold 10.3 million vehicles in 2016, putting it ahead of the 10.2m from Toyota. Volkswagen recorded a 3.85 sales rise despite ongoing legal claims in the USA over the dieselgate emissions scandal.
Volkswagen CEO Matthias Müller said: "The race for size is not an end in itself. The fact we delivered more than 10 million cars worldwide in 2016 gives us stability. Our present vehicles success is the basis for our intensified efforts with future technologies such as e-mobility, autonomous driving and digitalisation."
Felipe Munoz, Global Automotive Analyst for JATO Dynamics, said: "The emissions issue was an enormous challenge for VW Group. Despite, the reputational issues it brought about, the German car maker was in a strong position when the scandal hit as a result of its strong sales volumes. By leading two of the three largest car markets, Europe and China, VW Group has been able to weather the storm while simultaneously improving its product offering more quickly than its competitors."
There are other reasons why VW has moved ahead of Toyota, as Munoz pointed out: "The other major reason why VW Group is today the biggest manufacturer globally is the gap between the perception of consumers and the reality. Despite the reputational problems, excellent quality standards continue to win over consumers. This has been particularly true for the Audi and Porsche brands."
Munoz also cites China as a major influence on VW’s success: "The Chinese market has remained largely untouched by the scandal with its sales continuing to grow to offset significant declines in Brazil, the USA and Russia. Similarly, the recovery of the European car market enabled VW Group to hold on to the top spot in terms of volume, despite the fact that its market share suffered a small decline."