Volkswagen AG said sales rose more than twice as fast as the worldwide auto market last month as demand for VW and Audi models in the U.S. and China aided its bid to overtake Toyota Motor Corp. as the largest carmaker, Bloomberg reported.

Deliveries by the VW group, which also includes the Skoda, Seat and Lamborghini brands, increased 9.8 percent from a year earlier to a record 612,200 cars, sport-utility vehicles and commercial vans in October, outpacing the industry’s 4.5 percent sales gain, Wolfsburg, Germany-based Volkswagen said today in a statement.

Volkswagen is targeting a second consecutive year of record deliveries as it adds about 70 models, including upgraded versions of existing vehicles. Christian Klingler, Volkswagen’s sales chief, said on Sept. 30 that VW may achieve its goal of selling 10 million vehicles a year before the target date of 2018. Volkswagen said today that 10-month deliveries climbed 12 percent to 5.98 million vehicles.

“We are continuing to gain global market share,” Klingler said in today’s statement. “We expect this trend to continue over the coming months as we systematically progress with our model initiative.”

Volkswagen’s preferred shares rose as much as 1.35 euros, or 1.2 percent, to 111.95 euros and traded at 111.90 euros as of 12:32 p.m. in Frankfurt. The stock has climbed 71 percent this year, valuing the company at 48.4 billion euros ($66 billion).

China Factories

The carmaker’s expansion targets rely on success in China, where VW is adding two factories to double production in its biggest market to 3 million cars within four years. VW plans to invest 6 billion euros ($8.2 billion) in China for the construction and to develop new models. Ten-month sales in the country rose 38 percent to 1.65 million vehicles.

Volkswagen, which will resume production in the U.S. with a factory being built in Chattanooga, Tennessee, increased 10- month sales in that market by 21 percent to 295,900.

The namesake VW brand raised deliveries by 12 percent to 3.78 million cars and SUVs in the 10 months through October. Audi sales rose 16 percent to 916,900. Skoda deliveries advanced 5.5 percent to 69,200, while Seat sales were unchanged at 285,200 vehicles. The commercial-van division’s deliveries increased 17 percent to 349,000, led by South American growth.

HERNDON, Va. — Volkswagen AG has one of the brashest goals in the auto industry—to dethrone Toyota Motor Corp. as the world’s largest automaker. There’s a hitch: In the all-important U.S., the VW brand clings to just 2.2 percent of the market, trailing even Korean upstart Kia, The Wall Street Journal reported.

Now, VW is gunning to reconquer lost ground here with a strategy it resisted for decades: tailoring its cars to mainstream American driving tastes. The first real test of that plan begins this week, as VW rolls out a comprehensive marketing campaign for a bigger and cheaper version of the Jetta, its top U.S. seller, which has just hit dealership floors.

“A lot of people worry that we are going to start making VWs for the masses,” says Mark Barnes, VW’s U.S. CEO. “I like to say we’re going to bring the masses to VW.”

The retooled compact sedan marks the first time VW engineers have designed a model specifically for the United States.

Next year, a new family-size sedan is scheduled to roll off the assembly lines at a newly built $1 billion plant in Chattanooga, Tenn. It is VW’s first U.S.-made car since the 1980s. On its heels comes a revamped New Beetle.

“I am fully aware that Volkswagen was too cautious for too long in North America,” Volkswagen Chief Executive Martin Winterkorn said at a test-driving event for the new Jetta in San Francisco this summer. His remark was a nod to the car maker’s decades-long penchant for deploying cars designed for European tastes across the Atlantic. That left its U.S. operations with models too small and expensive to go head-to-head with Asian and American rivals. Now, he vowed, “we have turned that upside down.”

Much is riding on the strategy. To become the world’s largest car maker by 2018, Mr. Winterkorn and his management team have set themselves a lofty goal of selling 800,000 VWs a year in the U.S. by then, and another 200,000 cars from its luxury moniker Audi. VW executives have said they aim to become profitable in the U.S. by 2012 or 2013, selling 400,000 VW-brand cars annually by then, after racking up losses in the U.S. of close to $1 billion in some recent years.

It’s an audacious—and some analysts say, impossible—target.

The company sold 213,454 VWs and 82,716 Audis in the U.S. last year. That’s down from 577,000 VWs at its peak in 1970, when it was the emblematic vehicle of the counterculture and America’s top-selling import. It doesn’t help that the overall U.S. auto market shrank by one-third, or 5.7 million annual car sales, between 2007 and 2009, and isn’t expected to return for years to its pre-crisis level of 16 million annual sales.

To get there, VW has to prove that it is capable of producing cars with mass-market appeal, something no European auto brand has achieved in the U.S. in recent decades. It is seeking a tricky balance: preserving the whimsical aesthetic and German engineering expertise that has won it a core base of Volkswagen loyalists, while broadening its appeal to mainstream drivers of more generic but trusted rides from the likes of Toyota and Honda Motor Co.

BERLIN – Volkswagen AG plans to bring back the $85,000 Phaeton to the U.S., where the flagship sedan flopped and was withdrawn in 2006, reported Bloomberg.

The Phaeton’s U.S. relaunch is part of the German carmaker’s aim of tripling its share of the world’s second-largest market by 2018.

“We have our eyes firmly set on the U.S. market,” Juergen Borrmann, director of Volkswagen’s plant in Dresden, Germany, where the Phaeton is built, said in an interview. The model for the U.S. will be completely redesigned and retooled, he said.

Former VW CEO Bernd Pischetsrieder pulled the Phaeton from the U.S. four years ago after the car failed to meet sales goals and called a 20,000 global target a “pipe dream.”

His successor, Martin Winterkorn, later threw his full support behind the model and announced plans to keep the Phaeton. Sales last year fell 27 percent to 4,500 cars.

“The U.S. is a most lucrative market for high-end sedans and VW has to tackle that potential if it wants to credibly expand its U.S. presence,” said Willi Diez, head of the Nuertingen, Germany-based Institute for Automobile Industry, a state-funded think tank.

Volkswagen this year is introducing an updated Phaeton, which has new front and rear sections, an interior upgrade and a wider selection of engines, as part of the model’s first overhaul since 2007. The face-lifted Phaeton entered European showrooms in June and goes on sale in China next month.

VW, Europe’s biggest carmaker, plans to reintroduce the Phaeton in the U.S. when the next generation of the model comes to market, Borrmann said in the Aug. 17 interview, declining to give a timeframe.

Headed for its eighth straight annual loss in the U.S., VW aims to almost triple the carmaker’s share of the U.S. market to 6 percent by 2018 and boost deliveries to 1 million cars, including the Audi luxury unit.

U.S. progress is a key component of Winterkorn’s goal of surpassing Toyota Motor Corp. in sales and profitability.

The Phaeton, named after the son of the Greek god Helios, went on sale in 2002, with development costs exceeding 1 billion euros ($1.3 billion). The model was part of an effort by Supervisory Board Chairman Ferdinand Piech, who was then CEO, to make the VW brand more upscale and compete against BMW AG and Mercedes-Benz.

FRANKFURT—Volkswagen AG posted a sharply higher second-quarter net profit on Thursday thanks to higher vehicle sales and weak euro, which boosted revenues earned abroad, reported The Wall Street Journal.

“We were able to expand our position in the international automotive markets even further. We shall systematically extend our competitive position on the way to becoming the world’s leading automaker,” Volkswagen Chief Executive Martin Winterkorn said in a statement.

Volkswagen, with a stable of brands that includes Audi AG, Skoda, Seat and Bentley, as well as its own VW brand, has recently stated that it wants to overtake Toyota Motor Co. to become the world’s biggest auto maker.

Net profit jumped to €1.25 billion ($1.62 billion) for the three months ended June 30, from €283 million a year earlier, when car sales collapsed amid the global economic crisis. Revenue rose to €33.2 billion from €27.2 billion.

Favorable exchange rates had a positive impact on Volkswagen’s profit. With the euro weaker against the dollar, earnings generated in the U.S. were inflated when converted into the common currency. The Chinese Renminbi is also effectively still tied to the dollar.

VW’s Chinese operations, which are consolidated at equity and thus aren’t included in the company’s operating profit figure, earned the equivalent of €802 million in the first half of the year.

The Audi premium brand remained VW’s biggest earnings contributor with €1.33 billion operating profit in the first six months compared with €823 million in the prior-year period. Audi has closed the gap on the world’s two largest premium auto makers, BMW AG and Daimler AG, posting sales gains for most of the last 10 years.

Operating profit at the core VW brand rose to €1.03 billion from €216 million last year, while first-half losses at the Spanish Seat brand and the Bentley marque narrowed slightly to €157 million from €159 million and €109 million from €114 million, respectively. VW doesn’t release second-quarter results for its different divisions.

Net liquidity in Volkswagen’s automotive division soared 42 percent to €17.5 billion at the end of the second quarter from €12.3 billion last year.

VW holds a 29.9 percent stake in German truck maker MAN SE and speculation has been swirling for months that it might raise its stake to help foster cooperation with VW’s own Swedish truck maker, Scania. VW also bought a 49.9 percent stake in Porsche Automobil Holding SE’s sports-car unit last year and plans to complete a complex merger with the holding firm in 2011.

Volkswagen’s earnings underscore a broad recovery in the automotive industry after a gloomy 2009, when demand for cars and trucks contracted sharply amid tight credit markets and a jittery economic environment.

But Europe’s largest auto maker by sales emerged relatively unscathed from the industry gloom compared to most rivals, thanks partly to its strong presence in China, a small exposure to the U.S. market and a revival in demand in Germany last year as a result of state-backed scrapping incentives.

Volkswagen, however, reiterated previous statements that the dynamic growth experienced in the first six months “will not continue undiminished in the second half of the year.”

Volkswagen posted a 16 percent annual rise in vehicle deliveries in the January-to to June period to 3.61 million cars and trucks. Some analysts have cautioned that the enormous growth in China in recent months might start to slow, and that the recent recovery in the U.S. appears fragile. Additionally, the European market is heading for a downturn in coming months after the effects of various scrapping initiatives begin to wane.

Volkswagen AG, Europe’s largest carmaker, said operating profit and deliveries may rise “significantly” this year as demand increases in major markets and the euro’s decline against the dollar helps sales abroad, Bloomberg reported.

Five-month sales of cars and sport-utility vehicles, as well as operating profit, “considerably outperformed expectations,” Wolfsburg, Germany-based Volkswagen said today in a statement. The expansion “looks set to continue” in June, the company said.

“Volkswagen is focusing spending on the lucrative growth markets and its vast model range already now beats that of many competitors,” said Stefan Bratzel, director of the Center of Automotive at the University of Applied Sciences in Bergisch- Gladbach, Germany. “They seem extremely well-positioned for any post-recession market revival.”

Volkswagen is targeting a second consecutive year of record deliveries as it adds 60 models, including upgrades, in 2010. The carmaker will build its 10th plant in China as part of a plan to double production capacity in its biggest market to 3 million vehicles within four years, VW said on June 9.

China, where Volkswagen is investing 6 billion euros ($7.4 billion), is critical to Chief Executive Officer Martin Winterkorn’s goal of surpassing Toyota Motor Corp., the world’s biggest carmaker, in sales and profitability by 2018. VW’s sales in the world’s biggest auto market surged 48 percent in the first five months to 777,800 vehicles.

“Volkswagen expects a good first half of 2010,” the manufacturer said today, although development in the second half “still entails uncertainties.”

The company delivered 6.29 million cars and SUVs last year and reported operating profit of 1.9 billion euros.

Volkswagen AG plans to cut the U.S. price and increase the size of the Jetta compact car, its best-selling model in the country, as the automaker aims to make its U.S. operations profitable by 2013, reported Bloomberg.

The revamped Jetta will be about 3.5 inches longer and about $1,700 less than the current version when U.S. sales start in October, the Wolfsburg, Germany-based company said in a statement. A hybrid version will sell in two years.

Volkswagen, Europe’s largest automaker, is shifting more production to North America to help trim costs and compete with small-car leaders Toyota Motor Corp. and Honda Motor Co., Stefan Jacoby, chief executive officer of VW’s U.S. unit, said yesterday in an interview. The company is aiming to almost double sales in the market by 2012, to 400,000 units for its namesake brand, compared with 213,454 vehicles last year.

“Model by model, our lineup will be competitively priced so that we will be able to compete in the American market,” Jacoby said yesterday at a press briefing to introduce the car in New York.

Moving more production to North America from Europe provides Volkswagen with a hedge against currency fluctuations and shaves costs, Jacoby said. He restated the company’s goal for North American output to rise to 75 percent of sales in the region by 2013 from about 60 percent last year.

Volkswagen will be completely independent of the euro- dollar exchange rate by 2012 or 2013, and the U.S. business will be profitable by then, Jacoby said. The German company, which reported a profit of 960 million euros ($1.18 billion) last year, doesn’t break out results for the U.S., and Jacoby declined to give specifics for how much the business lost in the market last year.

Volkswagen plans to sell the 2011 Jetta for about $16,000, down from the current base of $17,735. That would bring the model closer to the starting prices of Toyota’s Corolla and Honda’s Civic, now $15,450 and $15,455, respectively, according to the companies’ websites.

“They’re going after big-volume products,” Jeff Schuster, executive director of global forecasting at market-research firm J.D. Power & Associates in Troy, Mich., said in a telephone interview.