VW overtakes Toyota to become world's biggest automaker

(AFP PHOTO/FILES/Roberto SCHMIDT)

Thanks to Volkswagen's acquisition of Porsche, the two companies have combined to produce more cars this year than any other automaker, according to the consultant group IHS Global Insight on November 10.

VW's stable is no longer just made up of practical, fuel-efficient family compacts like the Golf, Polo and Beetle. Exciting, luxurious and flashy cars like the latest Porsche Boxster, the Porsche Panamera sedan and the iconic 911 line are all part of the company of the "people's car."

All told, Volkswagen has sold more than 4.4 million cars since January, beating Toyota by more than 400,000 vehicles.

Some may decry the perhaps premature combination of Volkswagen and Porsche, as the full merger will not be complete until 2011.

Various government-backed incentive programs around the world favored companies that produce fuel-efficient autos, like Volkswagen, contributing to their high sales through October this year. Volkswagen has also moved aggressively into the Chinese market, which has exploded in 2009 to become one of the biggest car-consuming countries worldwide.

But while VW has expanded, it's been turmoil at Toyota this year: a change at the CEO level, waffling on their plans for the future and record profit losses.

Perhaps nothing aided VW's ascent more than Toyota's decision earlier this year to nearly halve its production volume, from 2.1 million to 1.1 million cars. When "cash for clunkers" programs swept like wildfire through major markets this summer Toyota was flat-footed while VW was ready to profit.

VW could be atop the leaderboard for the near future as Toyota is still planning to run perhaps 30 percent below its peak capacity through next spring.

Toyota became the world's largest automaker just last year, overtaking General Motors, which held that title for 80 years. GM is the third-biggest car seller this year despite declaring bankruptcy last spring.

The fourth-best car seller this is the Hyundai-Kia Automotive Group, but would be surpassed by the combined sales totals of the Renault-Nissan alliance, which are considered separate even though Renault owns about the same amount of Nissan as Hyundai does of Kia.